Last Monday, a federal district court in Orlando issued a temporary restraining order (“TRO”) against a Florida corporation, five Florida limited liability companies and seven of the businesses’ respective officers (the “Defendants”), freezing the telemarketers’ assets and temporarily halting the group’s marketing initiatives. The Federal Trade Commission and Florida Attorney General’s Office (the “Government Plaintiffs”) filed the action against the Defendants for alleged violations of the Telemarketing Sales Rule, as well as other state and federal laws prohibiting deceptive and unfair trade practices.

What claims are the Defendants facing under the Telemarketing Sales Rule?

Alleged Telemarketing Sales Rule Violations

The Government Plaintiffs brought 13 separate causes of action against each of the individual and corporate Defendants, including the following nine alleged violations of the Telemarketing Sales Rule:

  1. Misrepresenting their debt relief services;
  2. Misrepresenting their affiliations with financial institutions;
  3. Charging/receiving fees in advance of providing debt relief services;
  4. Billing consumers without their express informed consent;
  5. Calling telephone numbers on the National Do Not Call Registry;
  6. Calling individuals who previously stated that they did not wish to receive telemarketing calls;
  7. Failing to transmit Caller ID information (including telephone number and name of the telemarketer);
  8. Using prerecorded messages to call consumers without their express written consent; and
  9. Failing to promptly disclose their identity, the purpose of the call and the nature of the services offered.

Temporary Restraining Order

On June 22, 2015, in response to the Government Plaintiffs’ ex parte motion, the court issued its TRO against the Defendants. Among other things, the court order:

  • Prohibits the Defendants from violating the Telemarketing Sales Rule, FTC Act and/or Florida Deceptive and Unfair Trade Practices Act;
  • Freezes each Defendant’s assets, including cash, real and personal property and shares of stock; and
  • Requires the Defendants to divulge exhaustive financial statements to the Government Plaintiffs.

The TRO expires on July 7, 2015, at which time the Defendants must appear before the court to argue whether the restrictions should be lifted.

Protect Your Telemarketing Business and Assets

As this case demonstrates, the Telemarketing Sales Rule empowers the FTC and state attorneys general to enforce a number of regulations against telemarketing businesses and their officers. Telemarketers can minimize their risk of liability by maintaining a strict regimen of compliance with applicable regulations.