November 2011

In this issue:

  • The Securities and Exchange Commission has proposed adopting new rules regarding telemarketing including “do-not-call” lists, hours of telephone solicitation, and bans on deceptive and abusive acts.
  • In California, a court has denied Citibank’s motion to dismiss a purported class action against it for allegedly sending unsolicited text messages.
  • In Maine, the customers of a grocery store whose electronic payment data was allegedly stolen by third parties won a victory against the grocery store for failure to notify them of the breach. The First Circuit ruled that the grocery store was liable for mitigation damages, i.e. the costs associated with consumers protecting themselves from the breach.

Federal Trade Commission
The FTC has filed a lawsuit against a company and its principles alleging illegal prerecorded calls.  United States v. Sonkei Communications, et al.  The complaint alleges that the defendants called on behalf of entities using false caller identification information and prerecorded messages when the recipients of the calls had not expressly consented to receive the calls.  The complaint alleges that the defendants knew or had reason to know that their clients were violating the Telemarketing Sales Rule and, therefore, were liable for their clients’ actions.

Securities and Exchange Commission
The Securities and Exchange Commission has proposed adopting new rules regarding telemarketing including “do-not-call” lists, hours of telephone solicitation, and bans on deceptive and abusive acts.  The complete proposal can be reviewed in the November 2nd issue of the Federal Register.  The new rules are to go into effect 45 days from publication in the Register.

California
A court has denied Citibank’s motion to dismiss a purported class action against it for allegedly sending unsolicited text messages.  Ryabyshchuk v. Citibank.  The plaintiff contacted Citibank by telephone and inquired about a personal line of credit.  Later that day, he allegedly received an unsolicited text message from Citibank.  He replied by sending “stop” and received a confirmation message from the bank.  He alleges that both messages were illegal under the TCPA.  The court noted that it was unclear whether the plaintiff released his number “knowingly” to the bank, thus providing express consent.  The court did seem to accept the FCC’s conclusion that provision of a telephone number is express consent but did not rule for Citibank because it did not produce evidence that the plaintiff had provided the number.

View the attorney’s comments on this posting.

Maine
The customers of a grocery store whose electronic payment data was allegedly stolen by third parties won a victory against the grocery store for failure to notify them of the breach.  The First Circuit ruled that the grocery store was liable for mitigation damages, i.e. the costs associated with consumers protecting themselves from the breach.  Anderson v. Hannaford Brothers Co.

View the attorney’s comments on this posting.

Maryland
A federal court has ruled that a recipient of a fax had no private cause of action for failure to include the time and date stamp on the fax.  Zaller v. Pharmawest Pharmacy.  The court ruled that the technical and procedural standard subsection of the TCPA contained no private cause of action and the plaintiff could, therefore, not sue for failure to include it.

A federal court in Maryland has ruled that prerecorded debt collection calls received by a landline were not subject to the TCPA’s restriction on prerecorded calls. Worsham v. Acct. Receivables Mgmt.

Massachusetts
A Massachusetts federal court has ruled that a debt collector did not violate the TCPA when it left two prerecorded messages on a voicemail in the interest of collecting a debt. Shannon v. Citibank.  It does not appear that the court reviewed whether the messages violated the FDCPA, however.

Missouri
Missouri Attorney General Chris Koster gave a speech in November where he described technology available to “spoof” the identity of senders of text messages.  Koster said the technology is often used for bank fraud.

View the attorney’s comments on this posting.

The Missouri Attorney General has obtained a restraining order against a Florida telemarketer prohibiting it from violating Missouri’s “do-not-call” list.  Missouri v. Azriel Financial Services.  Missouri continues to actively enforce its state “do-not-call” list which has different parameters than the federal “do-not-call” list and must be ordered and complied with separately from federal law.

New York
The director of the Division of Consumer Protection who enforces New York State’s “do-not-call” law confirmed that the state would enforce its law against a professional fundraiser selling items on behalf of a charity even though the charity would be exempt from the list law if it sold those goods “in-house.” This answer raises a constitutional problem with regard to violation of equal protection guarantees, but was expected given New York’s enforcement history.

View the attorney’s comments on this posting.

South Carolina
A bill has been proposed in the South Carolina General Assembly (SB 1004) which would require telephone solicitors to display accurate caller identification including name, telephone number, and client name.  The telephone number must permit a caller to add his or her name to “do-not-call” lists during normal business hours.

View the attorney’s comments on this posting.

Texas
A Texas Appeals Court has ruled that the TCPA does not preempt more restrictive state law regulating prerecorded messages.  First National Collection Bureau, Inc. v. Walker.

Washington
A judge in Washington has ruled that the TCPA does not preempt state law on prerecorded messages. Meilleur v. AT&T, Inc.  There are several cases on both sides of this issue, some hold that federal law preempts state law and some do not.

Commentary

South Carolina Bill Overlaps with Federal Caller Identification Requirements

Data Storage & Anderson v. Hannaford Brothers Co.

TCPA Statute of Limitations & Class Actions

In-House Soliciting and Application of “Do-Not-Call”

Spoofing in Text Messages for Fraud

Express Consent and Ryabyshchuk v. Citibank

Debt collection calls to cell phones