FEDERAL
TRADE COMMISSION
The
FTC has reached a settlement with a company and four individuals resolving
allegations of improper debt collection activity. The settlement involved
a $300,000 civil penalty.
A Federal
District Court has approved a settlement between the FTC and Canadian
telemarketers. The FTC alleged that the defendants sold bogus credit
card protection and advance fee credit card services to United States
customers. The FTC alleged that the defendants misrepresented their
identity and deceived consumers regarding liability for unauthorized
charges on their credit cards. The FTC worked with provincial police
in Canada to obtain a permanent injunction, including summary judgment
against the defendants. The total fine and judgment against the defendants
was more than $4,000,000. Advance fee credit cards and credit card
protection continue to be types of telemarketing drawing high scrutiny
from enforcement authorities. If you sell these types of services,
or any other type of service, for that matter, it is extremely important
that your materials are compliant and that you monitor your sales
activities to ensure adherence to those materials.
The proposed
fee increase under the Telemarketing Sales Rule for the national do-not-call
list comment period ended on June 1st. The agency will now respond
to these comments and promulgate the final rule.
FLORIDA
The
Attorneys General in Florida and Minnesota have filed suit against
a major long distance company alleging that incorrect bills were intentionally
sent to consumers to generate inbound calls during which an upsell
would be made. Telemarketing and consumer protection laws in general
still apply to inbound calls if an upsell is made during the call.
MARYLAND
Maryland
has amended its state telemarketing law to incorporate the Telemarketing
Sales Rule and the Telephone Consumer Protection Act. Violations of
either federal statute will now constitute violations of state law,
as well. State law provides for payment of a reasonable attorneys
fee, while federal law generally does not.
MICHIGAN
Ten
states, including Michigan, have settled charges against a local and
long distance telephone reseller. Their suit alleged deceptive telemarketing
practices, including slamming and misrepresentations regarding
the price of services.
NEW
JERSEY
New
Jersey has adopted a regulation requiring registration for commercial
telemarketers. There are no exemptions to the rule for residential
telemarketers. The registration requires a fee but no bond, although
the registering company must also obtain a certificate to do business
in the state and have a registered agent in the state. You can download
the form for this registration at http://www.state.nj.us/lps/ca/donotcall/tmarketform.pdf.
NEW
YORK
A
proposal has been introduced in the New York General Assembly which
would amend the states definition of established customer
to limit it to contacts regarding renewal of an existing contract
or payment of debt pursuant to an existing contract. Please contact
me if you would like a copy of a chart which sets forth the federal
definition of established customer, as well as the state definitions
which can vary from the federal one.
NORTH
CAROLINA
The
North Carolina Attorney General has filed suit to enforce terms of
its state debt counseling law against a nonprofit organization. Many
states regulate debt counseling, even if performed by a nonprofit.
State laws can limit fees charged, require a license, and in some
cases ban debt counseling entirely. Further, enforcing authorities
including states, the FCC and the IRS are scrutinizing the relationships
between nonprofit debt counselors and any for profit companies they
may work with. Generally, these relationships must be at arms length
and meet many other requirements. Businesses should document all contracts
made in these situations to protect both entities.
TENNESSEE
Tennessee
has become the first state to adopt a law designed to discourage off-shoring
by businesses in call center or data entry areas. The law directs
the State Commissioner of Finance Administration to promulgate regulations
to authorize a preference in state contracts to data entry and call
center vendors providing services solely by citizens in the United
States, who reside in the United States or are authorized to work
in the United States. I have prepared a Memorandum which summarizes
legislation affecting off-shore activities and would be happy to provide
it to you upon request. Several states proposals are much more
burdensome than the law adopted by Tennessee. Additionally, some laws
already adopted have a disproportionate effect on foreign call centers.
These laws include requirements to disclose the location of the call
center (as opposed or in addition to the actual business making the
call) and/or the true name of the telemarketing sales
representative. The latter type of requirement is especially difficult
for persons from countries whose names are hard to pronounce or unfamiliar
to consumers in the United States.
UTAH
Although
a Utah court has ruled that state law does not apply to interstate
recorded telephone calls, the Utah Division of Consumer Protection
continues to attempt to enforce some of its state laws against interstate
calls. It is surprising that the Division would ignore a controlling
court decision and such a course of action could subject the Division
to sanctions, although the courts may be loathe to impose sanctions
against a governmental body.
WISCONSIN
The
Wisconsin Attorney General has obtained a judgment against a company
after filing suit alleging cramming, i.e., billing customers
for voice-activated email message services, which were not authorized
by the consumers.
Wisconsin
has also obtained a judgment against a telecommunications company
alleging slamming and false or misleading statements.
Wisconsin
has also filed suit against a company which allegedly faxed illegal
time-share advertising to consumers. As you may know, fax blasting
laws will likely subject the sender to TCPA suits, including class-actions.