Telemarketing
The Federal Trade Commission recently announced that it has taken action to stop an alleged interconnected web of operations purportedly responsible for delivering tens of millions of unwanted Voice Over Internet Protocol and ringless voicemail bogus debt service robocalls to consumers nationwide.
The Department of Justice (DOJ) filed the complaint in federal court on the FTC’s behalf.
The DOJ also filed a proposed consent order against one of the companies and individuals involved in the operation, which would, if approved by the court, bar them from making further misrepresentations about debt relief services and ordering them to comply with the Telemarketing Sales Rule.
“This case targets the ecosystem of companies who perpetrate illegal telemarketing to cheat American consumers who are struggling financially,” said FTC lawyer Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue to take aggressive action to protect consumers from the scourge of illegal robocalls.”
“The Department of Justice is committed to stopping individuals and companies from making illegal robocalls and peddling predatory debt relief services,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to work with the FTC to enforce the FTC Act and the Telemarketing Sales Rule against those who use misleading sales tactics to prey on consumers.”
According to the complaint, Stratics Networks, Inc.’s outbound calling service enabled its clients to route and transmit millions of robocalls using VoIP technology.
Lead generators beware. The FTC has issued a Notice of Proposed Rulemaking that would turn the lead generation industry on its head.
Amongst numerous items currently on the FCC’s agenda, there is discussion on closing the “lead generator” loophole.
The FCC Chairwoman has proposed a new rule that would block unlawful robotexts. Read more, here.
The FCC first issued a Report and Order requiring mobile wireless providers to block text messages from numbers on a reasonable Do Not Originate list, which includes numbers that purport to be from invalid, unallocated or unused North American Numbering Plan numbers, and numbers for which the subscriber to the number has requested that texts purporting to originate from that number be blocked. The FCC already requires similar blocking of voice calls by gateway providers.
The Report and Order would also ensure that any erroneous text blocking can be reported to the provider doing the blocking by requiring mobile wireless providers to maintain a single point of contact for texters to report erroneously blocked texts. This single point of contact is already required for voice call blocking.
Even more significant for lead generators is that the FCC has issued a NPRM that would require carriers to “investigate and potentially block texts from a sender after they are on notice from the Commission that the sender is transmitting suspected illegal texts…”
Additionally, the FCC has proposed an extension of DNC protections to text messages.
On December 6, 2022, New York Governor Kathy Hochul signed legislation intended to crack down on unwanted telemarketing calls.
Legislation (S.8450-B/A.8319-C) requires telemarketers to give customers the option to automatically be added to the company’s do-not-call list at the beginning of certain telemarketing calls, right after the telemarketer’s name and solicitor’s name are provided, and before addressing the purpose of the call, etc.
Caveat, telemarketers that utilize pre-recorded messages must ensure that an automated means exists for consumers to have their telephone numbers suppressed. Consult with a state attorney general (AG) defense lawyer about the applicability of the new legislation, adjustment of scripts, and the implementation of appropriate disclosures and suppression protocols.
We are dialing up our efforts to give New Yorkers a break from unsolicited telemarketing calls,” Governor Hochul said. “For too long, New Yorkers have dealt with these nuisance calls, not knowing they can avoid these interactions by being added to a telemarketer’s do-not-call list. This new legislation will protect New Yorkers from receiving frustrating, unwanted calls by better providing information on do-not-call lists.”
Under existing law (Section 399-Z), telemarketers are required to inform individuals that they may request to be added to their company’s do-not-call list. However, not at the beginning. According to the NY Attornehy General’s office, consumers usually hang up before a telemarketer or recording has mentioned the do-not-call list, allowing telemarketers to continue calling them again and again.
According to the Telephone Consumer Protection Act, only “residential telephone subscribers” possess a right of action for violations of the Do-Not-Call registry.
Specifically, 47 U.S.C. § 227(c)(1) directs the FCC to promulgate DNC regulations to “protect residential telephone subscribers’ privacy rights to avoid receiving telephone solicitations to which they object.” 47 C.F.R. § 64.1200(c)(2) prohibits telephone solicitation calls to “[a] residential telephone subscriber who has registered his or her telephone number on the national do-not-call registry.”
But what about numbers that are used for both residential and business purposes?
In Chennette v. Porch.com, Inc. (50 F.4th 1217 (9th Cir. 2022)), the Ninth Circuit recently held that a fact-specific inquiry into each separate telephone number is required in order to determine whether a mixed-use telephone line is “residential.”
Here, the plaintiffs were home improvement contractors that allegedly received unsolicited text messages from Porch.com and its subsidiary, GoSmith that offered leads. Numerous plaintiffs purportedly registered their telephone numbers on the national DNC registry but allegedly received over 2,000 text messages. As a result, the plaintiffs filed suit in federal court alleging violations of the TCPA based upon use of an automated telephone dialing system to send automated text messages and violations of the DNC registry prohibitions.
The defendants filed a motion dismiss. They argued that the plaintiffs lacked standing to sue under the TCPA because their telephone numbers are used for personal and business purposes.
The Ninth Circuit reversed the lower federal court ruling.
In doing so,
On November 2, 2022, the Pennsylvania Office of Attorney General filed a lawsuit in federal court alleging that a group of companies offering lead generation services violated the Telemarketing Sales Rule and Pennsylvania consumer protection law. Specifically, the OAG alleges two unlawful advertising practices.
The first unlawful ad practice allegation is that the defendants utilized deceptive online advertisements to direct consumers to websites where they would purportedly be tricked into providing contact information and survey responses. The second unlawful ad practice allegation claims that consumers’ contact information and responses were sold to telemarketers despite numbers being on state of national Do No Call registries.
As stated in the complaint, defendants operate “dozens of websites designed for lead generating” that advertise “gift cards to popular retailers and digital payments to mobile apps” for answering various survey questions. According to the OAG, the websites require visitors to provide personal contact information and click a box indicating consent to mouseprint disclosures stating that consumer will receive prerecorded calls and text messages from marketing partners (the names thereof are disclosed to by a hyperlinked list). According to the OAG, these sellers’ products and services are oftentimes not related to the promotional offerings whatsoever.
Here, according to the OAG’s complaint, the websites violate state consumer protection law because they “create[] a likelihood of confusion or of misunderstanding” by “failing to include clear and conspicuous disclosures advising consumers that by registering their contact information with defendants they are purportedly consenting to be contacted by multiple third party sellers,
“Ringless voicemails” are messages left in a consumer’s mailbox without ringing their cell phone.
The Telephone Consumer Protection Act protects consumers from unwanted robocalls. The TCPA, in pertinent part, prohibits making any non-emergency call using an automatic telephone dialing system or an artificial or prerecorded voice to a wireless telephone number without the prior express consent of the called party.
On November 21, 2002 the Federal Communications Commission issued a unanimous Declaratory Ruling and Order finding that “ringless voicemails” to wireless telephones require consumer prior express consent because they are “calls” made using an artificial or prerecorded voice and therefore covered by the Telephone Consumer Protection Act. The FCC found that RVM are subject to robocalling restrictions. Regulated under the artificial or prerecorded voice prong of the TCPA, the issue of whether the technology used to send RVM is an automatic telephone dialing system may now be moot.
The FCC has clarified that RVM is a form of robocall and is illegal if the caller did not have the consumer’s prior express consent. Violations can be enforced by the FCC or the consumer can sue in court.
“Imagine finding robocallers leaving junk voicemails on your phone without it ever having rung. It’s annoying and it’s happening to too many of us. Today we’re taking action to ensure these deceptive practices don’t find a way around our robocall rules and into consumers’ inboxes,” said FCC Chairwoman Jessica Rosenworcel.
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Hinch Newman LLP’s advertising and marketing practice includes successfully resolving some of the highest-profile Federal Trade Commission (FTC) and state attorneys general digital advertising and telemarketing investigations and enforcement actions. The firm possesses superior knowledge and deep legal experience in the areas of advertising, marketing, lead generation, promotions, e-commerce, privacy and intellectual property law. Through these advertising and marketing law updates, Hinch Newman provides commentary, news and analysis on issues and trends concerning developments of interest to digital marketers, including FTC and state attorneys general advertising compliance, civil investigative demands (CIDs), and administrative/judicial process. This blog is sponsored by Hinch Newman LLP.