In a record Federal Communications Commission (“FCC”) Do-Not-Call violation settlement announced on May 19, 2014, Sprint Corporation (“Sprint”) agreed to pay $7.5 Million to resolve an FCC investigation into its wireless division’s failure to honor consumer requests to opt-out of the receipt of future telephone and text message marketing.  This settlement follows an earlier 2011 settlement stemming from numerous consumer complaints alleging that Sprint had continued to place telemarketing calls to consumers who had requested to be placed on the company’s internal do-not-call list.

Do-Not-Call Rules    

According to the federal Do-Not-Call rules, telemarketers are prohibited from calling consumers whose numbers appear on the National Do Not Call Registry.  There are exceptions for existing business relationships that allow companies to call consumers who have:  1) made a purchase within the previous 18 months; or 2) made inquiries with, or submitted an application to, the applicable company in the previous three months.

Pursuant to these exceptions, companies such as Sprint are permitted to contact their customers provided that they otherwise comply with the Amended Telemarketing Sales Rule (“ATSR”) and the Telephone Consumer Protection Act (“TCPA”), as well as honor consumers’ do-not-call requests.

In the facts at issue, Sprint has violated the Do-Not-Call rule, the ATSR and the TCPA by continuing to call and/or text message its customers after receiving their do-not-call/do-not-text requests.

FCC Enforcement Bureau Acting Chief Speaks

In announcing the Sprint settlement, Travis LeBlanc, Acting Chief of the Enforcement Bureau, stated, “[w]e expect companies to respect the privacy of consumers who have opted out of marketing calls.”  Mr. LeBlanc added, “[w]hen a consumer tells a company to stop calling or texting with promotional pitches, that request must be honored. Today’s settlement leaves no question that protecting consumer privacy is a top enforcement priority.”

Specifics of the $7.5 Million Do-Not-Call Settlement Agreement

Pursuant to the terms of the settlement agreement, Sprint has agreed to, among other things:  1) make payment of $7.5 Million to the U.S. Treasury; and 2) implement a two-year plan to ensure telemarketing compliance in order to protect consumer privacy and to prevent consumers from receiving unwanted telemarketing calls in the future.

As repeatedly discussed on this blog, telemarketers must ensure that they comply with both state and federal telemarketing rules and regulations or risk significant penalties.  It is best to have all internal telemarketing practices and procedures regularly audited by experienced marketing counsel.