Tiger Natural Gas, Inc. recently settled a class action privacy suit alleging that it illegally recorded sales calls with over 27,000 potential customers. Although Tiger hired a third party to handle its telemarketing, Tiger will pay $3.7 million on the claims as the advertiser with ultimate liability for non-compliance. According to the plaintiffs, neither company told the consumers the calls were recorded, as is required under California’s call recording law.

The Northern District of California court approved the settlement, which was far less than Tiger’s potential liability if found to be in violation of the California law. The class’s other claims for relief are still pending class certification, so Tiger is not out of the jungle yet.

Putting it Into Practice: Advertisers, not their third-party vendors, are ultimately responsible for their brands’ compliance with advertising and consumer privacy laws. Companies engaged in nationwide marketing must therefore keep a keen eye to ensure vendor compliance with state-specific regulations.