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FTC Sues Telemarketers for Do Not Call Violations

January 31, 2006

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An automated phone dialing service hung up on more than 64 million people and called more than a million others whose numbers were listed on the National Do Not Call Registry, according to the Federal Trade Commission.

The FTC is seeking civil penalties and a permanent injunction against the company and its owners for violations of the FTC's Telemarketing Sales Rule (TSR).

"Telemarketers will pay a price for violating the Do Not Call Rule," said Lydia Parnes, Director of the FTC's Bureau of Consumer Protection. "They should also know they can't hang up or play a prerecorded message when someone answers the phone, even when they are calling on behalf of a nonprofit organization."

At the FTC's request, the U. S. Department of Justice has filed a complaint in federal court against The Broadcast Team (TBT), based in Ormond Beach, Florida, because of "voice broadcasting" messages that the company delivered on behalf of a variety of clients.

The complaint alleges that TBT can deliver more than a million prerecorded messages per day to answering machines and voice mail services and that, since October 1, 2003, it has received more than $2 million in revenue for telemarketing campaigns that violate the TSR.

The FTC charged that TBT unlawfully called DNC-listed numbers and made calls when the required annual fee for access to DNC-registered phone numbers had not been paid. The FTC also alleged that when calls were answered by people rather than answering machines or voice mail services, TBT ended the call immediately or hung up after playing a recording.

The TSR limits telemarketers' use of recorded messages by requiring that calls answered by a person be connected to a live representative within two seconds.

This restriction on "abandoning calls" by hanging up or playing a recording when someone answers applies to telemarketing calls to solicit sales of goods or services, and to calls from telefunders to solicit charitable contributions.

On behalf of debt management services-related companies, TBT caused more than 64 million calls to be abandoned, the complaint alleges. TBT also abandoned more than 250,000 calls in delivering recordings soliciting ticket sales, and more than 200,000 calls in delivering recordings soliciting charitable contributions, according to the complaint.

The complaint also alleges that, for more than three months, TBT called telephone numbers listed on the DNC Registry to deliver prerecorded solicitations for one of its clients, Debt Management Foundation Services (DMFS).

During part of this time, between January 15 and February 4, 2004, TBT called more than one million Registry-protected numbers. TBT also made calls for DMFS and other debt management services-related companies when the required annual fees for access to DNC-listed phone numbers were not paid.

Named as co-defendants are TBT's owners, Robert J. Tuttle and Mark S. Edwards.

In a related case filed in the same court, on January 6, U. S. District Court Judge Anne Conway rejected TBT's request for a preliminary injunction to enjoin the FTC from enforcing the TSR.

Judge Conway concluded that TBT failed to show that it had a substantial likelihood of success on the merits of any of its claims challenging the application of the TSR to TBT's proposed use of prerecorded calls to solicit funds on behalf of a charity.

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