The Federal Trade Commission fined and barred a group of sales lead generators from future violations of the Telemarketing Sales Rule in an action filed by the Department of Justice on behalf of the agency.
Collectively known as the Consumer Education Group, defendants operated out of California and Colorado, from where they made millions of illegal telemarketing calls to consumers on the National Do Not Call Registry over a two-year period from 2013 to 2015, the FTC alleged, including prerecorded robocalls.
The calls were part of a campaign to generate sales leads for third parties. The defendants created websites and landing pages where consumers would complete online forms to learn more about solar panels, reverse mortgages, walk-in bathtubs, or other products. But the defendants—four individuals and four related companies—used the information to repeatedly call consumers to check their interest in the products, the agency charged.
More than two million of the calls were placed to consumers registered on the DNC Registry, the FTC said, and none of the calls that were placed to consumers identified the operation by a name that consumers would recognize. In reality, the defendants’ telemarketing campaign was not intended to solicit actual sales to consumers but was created as a means to collect consumers’ names and phone numbers and then sell the information as leads to third parties.
The complaint filed by the DOJ on behalf of the FTC asserted violations of the TSR for making illegal telemarketing calls to consumers with phone numbers on the DNC Registry and using robocalls.
To settle the suit, the defendants will pay a $100,000 fine (from a suspended $2.3 million judgment based on the amount the defendants obtained through their operation) and face a ban on violating the TSR by making outbound telemarketing calls to consumers on the National DNC Registry, absent certain requirements. Also prohibited: making telemarketing calls to consumers who have asked them not to call again, as well as making prerecorded telemarketing robocalls to consumers unless they have express permission to do so.
To read the complaint and order in United States v. Consumer Education.info, click here.
Why it matters: “These telemarketers and lead generators ignored the Do Not Call Registry and made illegal robocalls,” Jessica Rich, Director of the FTC’s Bureau of Consumer Protection, said in a statement. “It should be clear by now that companies are headed for law enforcement trouble when they use this kind of unlawful campaign to attract customers.”