A
Monthly Review of Issues Affecting Commercial Telemarketing
by Copilevitz & Canter, LLC, Attorneys at Law
Auguest, 2006
FCC
The FCC has specifically modified its caller ID regulation to provide that tax exempt nonprofit organizations
are not required to comply with caller ID projection requirements, but that any person or entity that engages
in telemarketing is banned from blocking caller ID information. The FTC applies the Telemarketing Sales Rule
caller ID restrictions to for-profit entities placing solicitations for nonprofits, so the effect of the FCC
action is limited to charities calling "in house".
FTC
The FTC has announced a settlement with telemarketers retained by DirecTV. The telemarketers will pay a $75,000
civil penalty, and could be liable based on an "avalanche" clause for just over $400,000. DirecTV settled
allegations against it.
The FTC has issued its final rule revising the fees required for access to the national "do-not-call" list. The
annual fee is now $62.00 per area code with a maximum of $17,050.00 for access to 280 area codes of data or more.
The first five area codes of data will still be free and the FTC will not charge any "exempt" entity which wishes
to access the data. The Commission only received 12 comments to this fee increase, one from a consumer who wanted
to be added to the registry.
TCPA
I have recently been contacted by multiple entities regarding TCPA class actions for violations of the
faxing provisions found in that law. New York's court of appeals has rejected class action liability
under the TCPA based on the fact that state law prohibits same. Many class actions under the TCPA,
however, are proceeding in other states.
A federal court in Pennsylvania has ruled that even though federal courts do not have "federal question"
jurisdiction over TCPA claims, they can exercise diversity jurisdiction over them so TCPA claims can
be removed to federal courts in some circumstances.
A federal court in Pennsylvania has ruled that an insurer did not have liability to defend a hotel which
allegedly sent unsolicited faxes in violation of the TCPA. There are many "coverage" decisions on both
sides of this issue as some courts have ruled insurers do have a duty to defend and pay these sorts
of claims. The answer to the question will likely depend on the insurance policy in question and its
language.
SEC
The Securities and Exchange Commission has issued a proposed rule requiring certain self-regulated
entities to have a written "do-not-call" policy, train their personnel regarding "do-not-call"
requests, and subscribe to the national "do-not-call" list. The rules also contain restrictions
on the use of prerecorded messages.
U.S. Congress
A Bill has been proposed (HR 5325) which would allow individuals to opt out of political calls by
adding their name to the national "do-not-call" list. Thus, the list would have more than just
the telephone number as it would also need to include whether the person had opted out of just
the current set of calls, or the current set of calls and political calls as well.
State
California
Many entities are reacting to the Supreme Court ruling regarding monitoring described in last
month's newsletter. I think it very safe to say that there will be a new wave of class actions
seeking monetary damages under this statute for alleged violations of California's monitoring law.
You should ensure compliance with same and other state and federal rules immediately.
Louisiana
The State of Louisiana has recently indicated that it intends to enforce the state law requirement
to purchase access to the state "do-not-call" list even against entities which acquire that data
from a third party and "scrub" against it. Most states which continue to have their own state
"do-not-call" list take this same position: you need to pay for the state "do-not-call" list
even if you acquire that data from a third party. In short, the states want their money. Please
contact me if you want ordering information regarding any state "do-not-call" list. Generally,
it is acceptable for an agent to use the paid access number of a client, and in the case of the
federal list, this is required. For purposes of the federal list, the seller, not the
telemarketing service bureau, obtains access to the federal list and provides its SAN to its
service bureaus.
New Jersey
The New Jersey General Assembly has passed a resolution urging the Internal Revenue Service to
bar tax preparers from sharing any consumer or client information with marketers, including
telemarketers.
New Jersey has amended its telemarketing "do-not-call" list law to require access to the
Federal Trade Commission's list no more than 31 days prior to the date any telemarketing call
is made. Prior to this amendment, New Jersey law required quarterly access to the federal list.
New York
New York has passed a revision to its state "do-not-call" list law to require that telemarketers
access the national "do-not-call" list no more than 31 days prior to the date that any
telemarketing call is placed.
North Carolina
North Carolina has passed a law barring unsolicited facsimiles using language very similar to
the TCPA. The law has an escalading penalty of $500 for the first violation, $1,000 for the
second violation and $5,000 for the third and any further violations. Reasonable attorney's
fees are also provided for successful plaintiffs. The statute does not refer to class action
availability although the TCPA, which also does not refer to class action availability, has
been used in these circumstances. Unsolicited faxing in North Carolina could conceivably be
subject to state and federal law class action liability.
Ohio
A notorious TCPA plaintiff has won an appeal of a TCPA claim which he was awarded only $700 for.
This plaintiff commonly adds on many other alleged violations, including other FCC rules and state
rules with regard to single calls. The appellate court did rule that the "knowing" multiplier
found in the TCPA requires more than knowledge that the entity is making a telephone call. The
court ruled that the defendant must "affirmatively know it is violating a regulation" for the
treble damages provision to apply. Knowing does not interpret as "should have known". You can
expect the private plaintiff practice of "adding on" alleged multiple violations of other sections
of law to continue, although because the court denied attorney's fees to this plaintiff, these
actions may be more pro se than by counsel.
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