A California telemarketing firm has agreed to pay a $180,000 fine to settle charges with the Federal Trade Commission that it made 46 million illegal calls.
The original fine was $3 million all but $180,000 will be suspended based on the defendants’ inability to pay. According to the complaint filed by the Department of Justice, since October 1, 2003, Voice-Mail Broadcasting Corporation (VMBC) and its owner, Jesse Crowe, have used automated dialers to “blast” consumers with prerecorded telemarketing pitches, the FTC stated.
The calls pitched products from debt-consolidation services to mortgage brokerage services and other retail and financial services. When VMBC’s telemarketing calls were answered by consumers rather than answering machines or voicemail systems, VMBC either immediately hung up, leaving consumers with “dead air,” or played a prerecorded message.
Such calls violate the FTC’s Telemarketing Sales Rule (TSR), which limits telemarketers’ use of prerecorded messages by requiring that calls answered by a person be connected to a sales representative within two seconds. The FTC’s complaint alleges that VMBC, under the direction of its owner, made more than 46 million calls that violated the TSR.
The agreement announced by the FTC is similar to those previously approved by the Commission in other cases involving the misuse of prerecorded telemarketing messages. The decree bars VMBC and its owner from violating the TSR by either hanging up or playing a recorded message when a consumer answers a call, instead of promptly connecting the consumer to a sales person.
The consent decree against VMBC and its owner is the third FTC case challenging telemarketing practices filed in federal district court in Los Angeles in as many months. In November 2007, as part of the FTC’s most recent Do Not Call enforcement sweep, the Commission filed a complaint and consent decree against Ameriquest Mortgage Company for improperly calling consumers on the Do Not Call Registry whose numbers had been obtained from third-party lead-generators, resulting in a $1 million penalty.
At the same time, the FTC filed a complaint against Global Mortgage Funding, Inc., for making hundreds of thousands of calls to consumers on the Do Not Call Registry, failing to transmit the required caller ID information, failing to pay the Do Not Call Registry fees, and improperly abandoning calls made to consumers.
The fine announcement follows an FTC crackdown on telemarketers that violated the Do Not Call rule in November. That month, the agency imposed $7.7 million in fines on six companies, including Ameriquest Mortgage Company and Craftmatic Industries, for violating the Do Not Call rule. That measure bars telemarketers from calling phone numbers on the FTC's Do Not Call list.
The VMBC ruling comes on the heals of another significant consumer protection ruling. A Federal judge this week barred what he called an illegal operation of an information broker who advertised and sold confidential consumer telephone records to third parties without the consumers’ knowledge or consent – a nefarious operation known as pretexting.
In entering summary judgment for the Federal Trade Commission against AccuSearch doing business as Abika.com, Judge William F. Downes of the U.S. District Court for the District of Wyoming also required the defendants to give up nearly $200,000 in ill-gotten gains derived from the consumer phone records they sold, and ordered that the individuals whose records were sold be notified.
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