A
Monthly Review of Issues Affecting Commercial Telemarketing
by Copilevitz & Canter, LLC, Attorneys at Law
April, 2008
FEDERAL
FTC
William E. Kovacic has assumed the role of Chairman of the Federal Trade Commission replacing Debra Platte
Majoras. It is uncertain how, if at all, this change in leadership will affect the FTC's enforcement of
telemarketing statutes.
The FTC has charged two data brokers with failing to secure information in their databases including customer
names, dates of birth, and social security numbers.
The FTC has proposed authorization of the FTC Act which would eliminate the exemptions found in the FTC's
jurisdiction for communications, common carriers, and nonprofit organizations. This is a huge power grab
by the FTC over entities traditionally regulated by other regulators.
The FTC has announced a settlement with a retail company regarding its failure to safeguard sensitive consumer
information including credit card numbers, expiration dates, and security codes. The FTC charged that the
company unnecessarily risked credit card information by storing it indefinitely in clear readable text on its
network and as a result a hacker was able to obtain sensitive consumer information. The settlement requires
that the retailer obtain an independent third party security auditor to implement safeguards on its system.
The FTC has again issued a press release regarding telemarketing and cell phones. Contrary to some e-mails,
cell phone numbers are not being released to telemarketers. The FCC has implemented regulations to the TCPA
which prohibit automated calls to cell phones absent the express consent of the consumer. The National
Do-Not-Call Registry does accept cell phone numbers.
The FTC has announced a settlement with three telephone bill aggregators following a $1.9 million payment for
consumer regress related to "cramming" charges. The settlement would prohibit the companies from misrepresenting
that consumers are obligated to pay telecommunications charges that they have not expressly authorized. The
total amount of the judgment was more than $30 million.
The FTC has agreed to a $413,000 civil penalty with an internet company which used e-mail in violation of
CAN-SPAM to drive customers to adult websites. Enforcement of CAN-SPAM is rare which makes this substantial
monetary payment notable.
National Do Not Call Registry
PossibleNow, a company with unmatched expertise with regard to national "do-not-call" list analysis, has
identified a series of errors in national "do-not-call" list data during the month of February, 2008. If a
compliance issue arises for your company regarding data in that period, you should be aware that this problem
existed which could provide some defense in the event of FTC enforcement action.
STATE
California
A bill has been proposed in the California Senate (SB 1423) which would prohibit telephone companies from
charging subscribers to have their mobile telephone number unlisted in a directory or through directory
assistance.
The California General Assembly is considering a bill (AB 2059) which would amend California's Business
and Professions Code to require that anyone who solicits by mail a recipient's consent to receive information
via telephone disclose in a clear and conspicuous fashion that the recipient will be waiving rights under
federal "do-not-call" law by consenting to receive that information.
A well known TCPA plaintiff has lost his case in California when the appellate court ruled that his cause
of action, alleged automated calls to his paging service, was barred by the statute of limitation.
Illinois
An Illinois court has certified a class of recipients of unsolicited facsimile advertisements alleged in
violation of the TCPA.
Louisiana
The Louisiana Senate is considering a bill (SB 431) which would impose a curfew on telemarketing calls
prohibiting calls between the hours of 5:00 p.m. and 8:00 a.m.
Michigan
The Michigan Senate is considering a bill (SB 1245) which would require that telemarketers transmit caller
identification information.
Nebraska
A bill has been proposed in the Nebraska Legislature which would prohibit political prerecorded messages
outside the hours of 8:00 a.m. to 9:00 p.m. The bill would also require that the message state clearly
the identity of the person on whose behalf the message is being transmitted and include a telephone number.
North Dakota
A telemarketer, on behalf of a charity, has agreed to a $25,000 payment for fees in lieu of civil penalties
to the State of North Dakota for alleged violations of North Dakota "do-not-call" laws. The charity reached
a separate agreement which included a $1,000 fine.
Ohio
A United States District Court in Ohio has ruled against a well known TCPA plaintiff with regard to his
claim that the TCPA allowed damages for alleged violations of its provisions in the "first call", even though
the statute only allowed a cause of action if the consumer had received more than one telephone call in
violation of the regulations. The plaintiff had alleged more than 187 violations of regulations during 10
separate telephone calls. The court ruled that the TCPA only provided damages per telephone call, not per
violation (Charvat v. GVN Michigan, Inc.).
Oklahoma
An individual who was sued by the state of Oklahoma challenged the disclosure provision found in the TCPA
regarding the identification of a person responsible for a prerecorded telephone call. The appellate court
ruled that a district court's order should be dissolved because the plaintiff failed to notify the United
States' Attorney General of the constitutional challenge.
Pennsylvania
The Pennsylvania Senate is considering a bill (SB 820) which would amend the state's telemarketing registration
law to require registration with the attorney general at least 30 days prior to marketing in the state. The
bill would still exempt businesses licensed or registered with the Federal Commonwealth Agency.
West Virginia
West Virginia has passed a law amending its telemarketing statute (SB 272) which makes minor changes to the
definition of "telemarketer".
Regulatory
Info
