After the Federal Trade Commission alleged a telemarketing company was delivering millions of illegal “robocalls” that pitched extended auto warranties and credit card interest rate-reduction programs, a federal court blocked the company from operation and froze its assets.
California-based SBN Peripherals, Inc., made more than 370 million calls to consumers over the last year, which resulted in tens of thousands of complaints to the agency and the “blatant violation” of telemarketing laws, according to the FTC. The FTC alleged that the robocalls – allegedly more than 2.4 million calls in a single day – violated the Do Not Call Registry rules because the company did not have prior, written permission from recipients.
The company used vague caller ID information (such as a generic “Sales Dept.”) or numbers registered to an offshore company in Asia, the complaint alleged. One of the offshore accounts generated more complaints to the FTC over the last year than any other robocall number, the FTC said.
Other violations of the rules included that the robocalls falsely claimed that the caller had urgent information about the recipient’s auto warranty or credit card interest rate, and when recipients sought more information, they were transferred to a live telemarketer who used fraudulent practices to sell “inferior extended auto service contracts” or “worthless debt-reduction services,” according to the complaint.
The FTC also alleged that the company made robocalls to telephone numbers on the National Do Not Call Registry, repeatedly called consumers who had requested to be put on the company-specific do-not-call list, and “abandoned” prerecorded calls at a rate higher than the rules allow.
A U.S. District Court in the District of Illinois issued a temporary restraining order stopping the company from making calls, freezing its assets, and appointing a receiver to take control of operations.
The FTC is seeking an order permanently barring the allegedly illegal conduct.
To read the court order, click here.
Why it matters: Telemarketing companies must remember to have recipients’ consent up front and in writing before making robocalls. The FTC has increased its enforcement of Do Not Call Registry violations, especially after new rules went into effect in September 2009 regulating robocalls.