For the second time in recent months, the Federal Trade Commission (FTC) pursued enforcement of the Telemarketing Sales Rule (TSR), reaching separate settlements with DIRECTV and Comcast that, in total, exceed $3 million. Each company agreed to settle FTC charges that it violated the Do Not Call provisions of the TSR by placing calls to consumers who expressly informed the company that they did not want to receive future calls.

Specifically, the FTC concluded that DIRECTV ran afoul of the TSR’s Do Not Call and call abandonment rules, as well as a 2005 federal court order barring it from engaging in such behavior, by allegedly “causing” a telemarketer to deliver more than one million prerecorded messages that (1) were not redirected to a live sales representative and (2) targeted consumers who were on the satellite television provider’s internal Do Not Call List. Consequently, and pursuant to the proposed settlement, DIRECTV will pay a civil penalty of $2.31 million, is permanently enjoined from violating the TSR in the future, and must implement monitoring, consumer complaint investigation, and recordkeeping plans to ensure internal and telemarketer compliance.

The DIRECTV telemarketer, Voicecast Systems (operating under the trade name InTouch Solutions), and its principals also settled related charges with the FTC, agreeing to pay $115,000 for allegedly abandoning calls and executing a campaign that, by design, delivered calls to consumers on DIRECTV’s internal Do Not Call list. Like DIRECTV, Voicecast’s stipulated order permanently enjoins the company from violating the TSR.

According to the FTC, Comcast similarly allegedly called more than 900,000 consumers, directly or through telemarketers, even though those consumers had asked the company to stop calling them. As a result, the proposed settlement order permanently enjoins Comcast from violating the TSR, and the company will pay a civil penalty of $900,000 and implement specific recordkeeping and monitoring plans to ensure compliance with the terms of the settlement.

In enacting these penalties, the FTC made clear that compliance with the Do Not Call provisions requires companies to “honor consumers’ company-specific Do Not Call requests.” The proposed settlement orders, like the recent complaint filed by the U.S. Department of Justice on behalf of the FTC against DISH Network (formerly EchoStar), also emphasize the importance of monitoring authorized telemarketers to ensure compliance with the TSR.

Before engaging a person as an authorized telemarketer, companies should conduct a thorough due diligence investigation of that third party to ensure that the party “has established and actively enforces effective policies and procedures for compliance with the [TSR], including procedures to prevent the initiation of outbound telemarketing calls to numbers on the National Do Not Call Registry . . . and . . . call abandonment.”

Furthermore, companies’ written contracts with such authorized telemarketers should expressly require full compliance with the TSR. A company should not compensate, provide substantial assistance to, or continue to do business with an authorized telemarketer after the company knows or “consciously avoids knowing” that the telemarketer’s activities violate the TSR and the company’s internal Do Not Call policies.

NOTEWORTHY NEWS

See “DOJ Sues DISH Network for Alleged Violations of FTC’s Do Not Call and Call Abandonment Rules” Privacy Briefing, Issue 8 (April 2009)