By Lesley Fair

Shhh!  Listen closely.  The sound you don’t hear is the ring of unwanted telemarketing calls being placed to the 150 million numbers on the national Do Not Call Registry.  More than 90 percent of Americans who have signed up for the Registry report receiving fewer telemarketing calls.  That’s a testament to the thousands of businesses that comply with the law.

But when companies don’t honor their obligations, they can expect to hear from the Federal Trade Commission (FTC).  That’s what happened when the FTC announced a crackdown on companies accused of violating the Telemarketing Sales Rule, the law that governs the Registry.  The upshot?  Six settlements imposing nearly $7.7 million in civil penalties and an additional action now in litigation.  The FTC’s cases offer a refresher course on what companies need to know to comply with the law.

• Marketers need express authorization to call consumers on the Registry.   Do Not Call means just that:  Do not call.  Once a consumer has signed up for the Registry, marketers need their express written authorization to call them.  According to the FTC, that’s where adjustable bed giant Craftmatic ran afoul of the law.  The FTC alleged that Craftmatic, one of its Vice Presidents, and three subsidiaries ran a sweepstakes offering consumers who filled out an entry form a chance to win a prize.  The sweepstakes form indicated that consumers’ telephone numbers were their entry numbers as well.  Craftmatic allegedly placed tens of thousands of calls to consumers on the Registry who entered the sweepstakes, even though the form did not tell them that by filling it out they would receive sales calls and the company did not seek their express consent to call them.  In settling the complaint, Craftmatic agreed to pay a $4.4 million civil penalty – the second-largest ever for DNC-related violations.

• Abandoned calls are banned.  The Telemarketing Sales Rule prohibits telemarketers from abandoning calls. An outbound telemarketing call is abandoned if the telemarketer does not connect the call to a sales representative within two seconds of when the person who answers the phone says hello.  The FTC charged that Guardian Communications and U.S. Voice Broadcasting blasted phone numbers with pre-recorded pitches, immediately hanging up when a consumer answered.  They turned over $150,000 to settle the FTC’s charges, with the remainder of the $7.8 million judgment suspended based on their inability to pay.

• Monitor the activities of your marketers.   The law makes clear that companies may be held liable for illegal calls placed by others on their behalf.  According to the FTC, security company ADT and two of its authorized dealers each called consumers whose numbers were on the Registry. The FTC alleged that ADT was liable both for the illegal calls it made, as well as those made by its telemarketers.  The three companies agreed to pay a total civil penalty of more than $2 million.

• Take care in determining who has an “established business relationship” with you.  The FTC charged that mortgage giant Ameriquest’s telemarketers improperly called consumers on the Registry whose numbers it had received from third-party lead-generators. The lead generators enticed consumers to provide their phone numbers using websites that offered information on financial products.  According to the FTC, because consumers on the lead lists were not reaching out to Ameriquest in particular, the company had not developed an “established business relationship” with them, making calls to registered numbers illegal.  Ameriquest agreed to pay a $1 million civil penalty for the alleged violations.

To learn more about your obligations under the law, read Complying with the Telemarketing Sales Rule, available at business.ftc.gov.

Lesley Fair is an attorney in the FTC’s Bureau of Consumer Protection who specializes in business compliance.