The FTC issued a report regarding its enforcement of the Fair Debt Collection Practices Act in the past year. The agency filed 10 cases against 56 pending cases, and settled nine cases worth $140 million in judgments.
The FTC won partial summary judgment against Dish Network alleging it violated the “do-not-call” list, refused to honor entity’s specific “do-not-call” requests, and abandoned calls in violation of the Telemarketing Sales Rule. The Court found Dish liable for more than four million calls made by it or its vendors to persons on the national “do-not-call” registry. United States v. Dish Network.
Comment: The 238-page opinion found Dish liable for more than 1.7 million calls made directly by Dish and 2.3 million calls made by Dish retailers to persons on the national “do-not-call” list.
The Court also ruled that the “safe harbor” in the Telephone Consumer Protection Act did not apply because it requires the sellers to have written procedures for compliance. Dish was unable to produce written procedures regarding how it selected telephone numbers for calling lists to ensure compliance with the registries.
This would be a good time to review the “safe harbors” in the TCPA and TSR to ensure you have documentation of each required item, e.g. record-keeping, training etc.
Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau has sued a non-bank mortgage lender for paying illegal kickbacks under the Real Estate Settlement Procedures Act (RESPA). They allegedly deceived consumers regarding the veteran organization’s endorsement of its products and will pay two million dollars in penalties.
Comment: We should be extremely careful when marketing highly regulated products such as financial services as special laws such as RESPA can apply in addition to general state and federal consumer protection law.
A California Court has denied a debt collector’s motion to stay a case pending FCC rulings on the definition of “automatic telephone dialing system.” Alvarado v. BA Area Credit Services. The Court ruled that the issue of “capacity” as set forth in the definition of automatic telephone dialing system was within the Court’s ability to decide and did not involve technical expertise requiring FCC intervention. The Court also noted that “there is no indication that a decision from the FCC is coming any time soon.”
A bill has been introduced in the Connecticut House which would prohibit fraudulent caller identification information and require telemarketing businesses maintain a customer relations telephone line for consumer questions or complaints.
Florida has proposed to amend its regulations regarding its state telemarketing act. (5J-6.005 et seq.) New rules would require a specific form to be used to post a telemarketing bond and would set a range of penalties for violation of the tax restrictions. Minor violations would be subject to a fine ranging from $1,000 to $10,000 per violation, while major violations would be assessed a fine of $5,000 to $10,000 per violation including suspension or revocation of a telemarketing license.
The text of the new rule can be reviewed at https://www.flrules.org/gateway/ruleno.asp?id=5J-6.005.
The Mississippi House is considering a bill (HB 415) which would add calls urging support or opposition to political candidates to those calls included in the definition of “telephone solicitor” for purposes of the state’s “do-not-call” law.
Comment: Political calls are “fully-protected speech” under the First Amendment to the United States Constitution. Commercial speech, e.g. telemarketing sales calls, is protected by the First Amendment at a lesser level. Including fully-protected speech in the commercial telemarketing restrictions would likely cause the state statute to be ruled unconstitutional because it would be subject to a higher level of constitutional scrutiny.
A bill has been proposed in the New York General Assembly which would allow individuals to add their fax numbers to the state no call registry.
Comment: Unsolicited faxes are already prohibited under the TCPA. Numerous class actions have been filed and any entity making unsolicited faxes is likely breaking federal law.
A bill has been proposed in the Oklahoma House (HB 1430) which would add businesses to the definition of “consumer” for purposes of the state’s telemarketing law. Thus, businesses would be subject to no call restrictions and other forms of consumer protection found in the Oklahoma law.
A Pennsylvania court has recognized that the FCC’s ruling on “express/prior express consent” is persuasive and should be given deference by the Court when considering a TCPA class action claim where a consumer did not give express consent to be called to a creditor. Zarichny v. Complete Payment Recovery Services.
A bill has been proposed in the Texas House (HB 411) which would prohibit credit access businesses from making telemarketing calls to entities on the federal “do-not-call” list. A credit access business is an entity that represents that it can provide to consumers services which would improve a consumer’s credit history or rating or similar services.