FTC Seeks End to Telemarketers Practices

An automated phone dialing service hung up on more than 64 million people and called more than a million others whose numbers were listed on the National Do Not Call Registry, according to the Federal Trade Commission, which is seeking civil penalties and a permanent injunction against the company and its owners for violations of the FTC’s Telemarketing Sales Rule (TSR).

“Telemarketers will pay a price for violating the Do Not Call Rule,” said Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection. “They should also know they can’t hang up or play a prerecorded message when someone answers the phone, even when they are calling on behalf of a nonprofit organization.”

At the FTC’s request, the U. S. Department of Justice has filed a complaint in federal court against The Broadcast Team (TBT), based in Ormond Beach, Florida, because of “voice broadcasting” messages that the company delivered on behalf of a variety of clients. The complaint alleges that TBT can deliver more than a million prerecorded messages per day to answering machines and voice mail services and that, since October 1, 2003, it has received more than $2 million in revenue for telemarketing campaigns that violate the TSR.

The FTC charged that TBT unlawfully called DNC-listed numbers and made calls
when the required annual fee for access to DNC-registered phone numbers had not been paid. The FTC also alleged that when calls were answered by people rather than answering machines or voice mail services, TBT ended the call immediately or hung up after playing a recording.

The TSR limits telemarketers’ use of recorded messages by requiring that calls answered by a person be connected to a live representative within two seconds. This restriction on “abandoning calls” by hanging up or playing a recording when someone answers applies to telemarketing calls to solicit sales of goods or services, and to calls from telefunders to solicit charitable contributions.

On behalf of debt management services-related companies, TBT caused more than 64 million calls to be abandoned, the complaint alleges. TBT also abandoned more than 250,000 calls in delivering recordings soliciting ticket sales, and more than 200,000 calls in delivering recordings soliciting charitable contributions, according to the complaint.

The complaint also alleges that, for more than three months, TBT called telephone numbers listed on the DNC Registry to deliver prerecorded solicitations for one of its clients, Debt Management Foundation Services (DMFS). During part of this time, between January 15 and February 4, 2004, TBT called more than one million Registry-protected numbers. TBT also made calls for DMFS and other debt management services-related companies when the required annual fees for access to DNC-listed phone numbers were not paid.

Named as co-defendants are TBT’s owners, Robert J. Tuttle and Mark S. Edwards. By a 4-0 vote, the Commission referred the matter to the U. S. Department of Justice for filing in U. S. District Court for the Middle District of Florida, which occurred on December 29, 2005.

In a related case filed in the same court, on January 6, U. S. District Court Judge Anne Conway rejected TBT’s request for a preliminary injunction to enjoin the FTC from enforcing the TSR. Judge Conway concluded that TBT failed to show that it had a substantial likelihood of success on the merits of any of its claims challenging the application of the TSR to TBT’s proposed use of prerecorded calls to solicit funds on behalf of a charity. The related case is The Broadcast Team v. Federal Trade Commission, Case No. 6:05-cv-1342-Orl-22JGG.

The FTC’s Bureau of Consumer Protection is committed to ensuring compliance with the National Do Not Call Registry. To date, the Commission has brought or referred to the U. S. Department of Justice 22 enforcement actions for a range of alleged DNC-related violations. Consumers can sign up their phone number on the Registry either online at www.donotcall.gov or by calling toll-free 1-888-382-1222 (TTY 1-866-290-4236) from the number they wish to register.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant actually has violated the law. The case will be decided by the court.

Copies of the complaint are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information on 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. 052-3025)