June 23, 2010
I often say that the FTC does not “kick down the door” of a business unless its employees believe that the company is engaging in widespread consumer fraud. It does not normally take such aggressive action for technical or procedural violations of FTC rules, including the Telemarketing Sales Rule.
In Federal Trade Commission v. Asian Pacific Telecom, Inc. et al, however, the FTC did just that: obtained an order halting the business’ calls, freezing its assets, and appointing a receiver to take control of the company.
The company allegedly used deceptive caller ID information, e.g. “SALES DEPT.” instead of the name of the company, and the script implied that the caller had a relationship with the recipient of the call when no such relationship existed. The FTC alleged that three of the company’s telemarketing numbers generated more than 25,000 consumer complaints to the agency in the past year, and two of the numbers generated more complaints to the FTC than any other prerecorded call caller ID telephone number.
Abusive companies like this have caused repeated tightening of FTC and FCC rules on prerecorded calls. What was once a viable means for customer loyalty programs and other calls welcomed by consumers has been repeatedly abused by companies using misleading or deceptive tactics resulting in a harsh regulatory backlash, affecting even companies whose calls were welcomed by their customers.
Telemarketing Connections Newsletter May/June 2010
Telemarketing Connections Newsletter July 2010