1. News
  2. 2003
  3. November

Current Events in November 2003

Browse Current Events by year

2003

Browse Current Events by month

Get trending consumer news and recalls

    By entering your email, you agree to sign up for consumer news, tips and giveaways from ConsumerAffairs. Unsubscribe at any time.

    Thank you, you have successfully subscribed to our newsletter! Enjoy reading our tips and recommendations.

    Illness Strikes Carnival's Legend Cruise Ship

    The ship was on an eight-day Caribbean cruise

    A stomach illness struck dozens of passengers and crew members aboard Carnival's Legend cruise ship, the Centers for Disease Control and Prevention said. The ship was on an eight-day Caribbean cruise out of Port Everglades, Fla.

    The company said 73 of the ship's 2,378 passengers and four of its 913 crew members were stricken with the illness, thought to be caused by a norovirus, a family of viruses that are among the most common causes of stomach ailments.

    Symptoms generally include nausea, vomiting and diarrhea, usually lasting one to three days.

    The ship returned to port as scheduled Saturday morning and departed Saturday afternoon on its next eight-day cruise.

    Carnival had two outbreaks aboard the Holiday last month and one aboard the Regal in August.

    Illness Strikes Carnival's Legend Cruise Ship...
    Read lessRead more

    GM Buys Back Noisy Trucks, SUVs

    November 26, 2003
    General Motors has been quietly buying back dozens of full-sized pickup trucks and SUVs after consumer complaints about knocking noises from the engine, consumer lawyers said.

    GM confirmed that it has received "a small number of complaints" about excessive engine noise after cold starts of the Chevrolet Silverado and GMC Sierra pickups as well as the Chevrolet Tahoe and Suburban and the GMC Yukon and Yukon XL SUVs. Most of the affected models are from the 1999 to 2002 model years and are equipped with 4.8-liter, 5.3-liter and 6.0- liter V-8 engines.

    The company has also bought back some 2002 Cadillac Escalade SUVs, according to lemon law attorneys who have handled the cases.

    "I cannot believe that GMC ... would allow one of its Yukons to be on the road sounding like it has got a rod going out," said 2002 Yukon owner George of Wichita, Kansas. "I really enjoy the Yukon but absolutely hate the knocking of the engine. Almost everyone that hears it says something is definitely wrong and mentions a rod going out."

    The company claims that the "only known effect" of the knocking is the sound. A spokeswoman said there is no damage to the engine. Some vehicle owners say the noise is caused by a condition known as "piston slap."

    "I know that over time from speaking with the dealerships service manager I will experience power loss, poorer fuel economy and higher emissions," said 2002 Silverado owner Stephen of Peabody, Mass., in a complaint to ConsumerAffairs.com.

    GM says it is handling consumer complaints on a "case-by-case" basis.

    "They're got a lot of problems with their engines, for whatever reason," said attorney Brian Parker of Bingham Farms, Mich. Parker, who handles lemon law cases, said "numerous" consumers have won buybacks of their trucks and SUVs.

    Another lawyer who handles lemon law cases in nine states said he knew of "more than 100" buybacks of Silverado and Sierra pickups alone.

    The company claims it has fixed the problem with the faulty engines, which was first reported by the Detroit Free Press. A spokeswoman said it was caused by carbon buildup in the pistons for the 6.0 liter V8 engine in mid-model year 2002, and on the 4.8 liter and 5.3 liter V8 engines for the 2003 model year.

    The engine knocking noise is not likely to spur a recall by the U.S. National Highway Transportation Safety Administration because it does not cause any safety problems.

    General Motors has been quietly buying back dozens of full-sized pickup trucks and SUVs after consumer complaints about knocking noises from the engine, co...
    Read lessRead more

    Cell Phone Numbers Unshackled

    November 24, 2003
    A federal appeals court has cleared the way for consumers to transfer home phone numbers to cell phones beginning today (Monday). The U.S. Court of Appeals for the District of Columbia denied the United States Telecom Association's request to block the rule from taking effect.

    Although the court did agree to hear the association's lawsuit, it refused to stop the rule from going into effect. This is also the day that cell phone companies must let customers take their numbers with them when they switch carriers.

    Both rules will initially apply only in the 100 most-populous U.S. markets. It will be extended to the rest of the country next May 24. Not sure if you're in the top 100? The FCC has a list on its Web site.

    The rules imposed by the Federal Communications Commission are intended to create more competition and there's little doubt they'll do that. They're also likely to create quite a bit of initial confusion as companies roll out extensive ad campaigns to poach each other's customers.

    Wise consumers will bide their time, however. For one thing, technical glitches are almost a certainty in the early days of the program and the promotions and deals won't be going away anytime soon. In fact, carriers will be sweetening the pot for existing customers, trying to hang onto as much market share as possible.

    Whatever else you do, remember this: the FCC rules don't mean you can dump your existing cell phone carrier before your contract expires without paying a hefty penalty. So be sure your contract is just about up before you jump ship.

    If you've decided to dump your wireline phone and transfer your number to your cell phone, it's not likely you'll encounter any contracts since service is generally month-to-month.

    How To Do It
    Set up your new service first. Whether you're switching cell phone carriers or moving your home number to your cell phone, start with the new carrier, the one you want to switch to. Don't cancel your existing service until you have the new service set up and working.

    Have a recent bill handy. You will have to provide your name, address and account number exactly as they appear on your bill. This reduces the chance of error.

    Be prepared to buy a new cell phone. Chances are you will have to get a new phone. Depending on the plan you choose, the new carrier may throw one in.

    Allow for some slippage. Cell phone numbers are supposed to be switched in less than three hours but that's just a guideline. It may take longer. You will be able to make outgoing calls on your old cell phone during the transition but when the switchover happens, incoming calls will go only to your new phone.

    Listen to all your voice mail messages. They will not be transferred to your new phone. Same goes for the numbers stored in your phone.

    Cell Phone Numbers Unshackled...
    Read lessRead more

    Get trending consumer news and recalls

      By entering your email, you agree to sign up for consumer news, tips and giveaways from ConsumerAffairs. Unsubscribe at any time.

      Thank you, you have successfully subscribed to our newsletter! Enjoy reading our tips and recommendations.

      Merit Bunk Beds Recalled

      November 21, 2003

      Merit Furniture Distributors Inc. is recalling 524 children's bunk beds. The bunk beds have openings between the guardrails and in the end structures that are too large. A child's body could slide between the openings and could become trapped by the head, posing a serious strangulation hazard.

      The twin over twin bunk beds involve model #DLM550, #DLM160, and #860. The wooden recalled bunk beds are labeled with the Merit name and specific model numbers on the top front railing system of the bunk beds.

      Furniture stores nationwide sold the bunk beds from May 2002 through August 2003 for about $150

      Consumers should contact Merit for information on how to return their bunk bed and receive a full refund. Call Merit at (800) 233-1778 between 8 a.m. and 4:30 p.m. PT Monday through Friday or check the company's Web site at www.meritfurnituredistributors.com.

      The recall is being conducted in cooperation with the U.S. Consumer Product Safety Commission (CPSC).

      Merit Bunk Beds Recalled...
      Read lessRead more

      Ford Offers New Fuel Module for Focus Models

      Component has been linked to a chronic engine stalling problem

      Ford wants owners of about 671,000 Focus compact sedans to bring their cars into dealerships for replacement of a component that's been linked to a chronic engine stalling problem.

      Affected are Focus models from the 2000 and 2001 model years. Embarassingly, the cars have already undergone 10 recalls for various safety problems. The current program is not a federally-mandated recall but is intended to clear up a growing backlog of customer complaints. Rather, the company calls it a "product improvement program."

      Ford says the sputtering engines are plagued by a dirt and sludge buildup in a fuel delivery module. The part was designed in Europe and will be replaced with a newer model that Ford thinks will deliver a better service record.

      A Ford spokesman said the real culprit is "the variability and unpredictability of the gasoline-petrol standards in North America."

      Customers affected by the engine problem will get an extended 10-year vehicle warranty on the fuel replacement part.

      Newer models aren't affected.

      Ford Offers New Fuel Module for Focus Models...
      Read lessRead more

      Polaris ATVs Recalled

      November 14, 2003

      Polaris Industries is recalling 14,000 Magnum, Trail Boss and ATP model all-terrain vehicles.

      The Consumer Product Safety Commission said damage to the fuel tank grommet can cause a fuel leak, posing a serious fire hazard to consumers.

      Polaris has received 265 reports of fuel leaks, including one report of a fire that damaged an ATV. No injuries have been reported.

      The recall involves the Polaris model year 2003 and 2004 Magnum 330 4x4 and Magnum 330 Mossy Oak ATVs; as well as model year 2004 Magnum 330 2x4, Trail Boss 330, ATP 330, and ATP 500 ATVs.

      The recalled ATVs have the following model numbers, which can be found on the certification decal located on the front center body panel: A03CD32(AA)(AC), A04CD32(AA)(AB)(AC), A04CB32(AA)(FC), A04CA32(AA)(AB), A04JD32AA, and A04JD50(AA)(AB)(CA). The name "Polaris" is prominently displayed on the right and left side of the seat and/or on the side body panels.

      The recalled units were sold in authorized Polaris dealers nationwide February through October for between $3,500 and $6,500.

      Polaris will notify all affected consumers to arrange free repair. Consumers can call Polaris at 800-765-2747 (800-POLARIS).

      Polaris ATVs Recalled...
      Read lessRead more

      Fairbanks Capital To Refund $40 Million To Consumers

      Feds charged Fairbanks failed to post consumers' mortgage payments promptly

      Fairbanks Capital will refund more than $40 million to consumers as part of a settlement of federal charges that it failed to post consumers' mortgage payments promptly and illegally imposed late fees and other charges on its customers.

      Consumers should be treated fairly and honestly in the servicing of their loans, said Timothy J. Muris, Chairman of the Federal Trade Commission. It is particularly important that the Commission stop unfair or deceptive practices in this industry, because consumers have no choice about who services their home loans and it can be extremely difficult for subprime borrowers to avoid an abusive servicer by refinancing or paying off their loans.

      HUD Secretary Mel Martinez said, Todays settlement makes clear that HUD and FTC are serious about protecting consumers from those who would try to steal their American Dream.

      Fairbanks is a financial services company that specializes in servicing subprime mortgage loans. Subprime lending refers to the extension of credit to consumers who are considered to be higher risk borrowers. "Servicing" means that Fairbanks does not originate loans, but collects and processes loan payments from borrowers on behalf of the owner of the mortgage notes.

      More Information The FTC's toll-free Fairbanks hotline: 1-877-862-0886. Consumers who have changed their address recently may provide updated contact information by calling the hotline. It is not necessary for consumers to take any action other than watching their mail for notice of the settlement.

      Headquartered in Salt Lake City, Fairbanks is one of the countrys largest servicers of subprime mortgage loans. In its charges, the FTC alleged that Fairbanks engaged in a myriad of unfair, deceptive, and illegal practices in collecting and processing consumers loan payments.

      In addition to the $40 million to be paid by Fairbanks Capital, the company's former CEO, Thomas D. Basmajian, will personally pay $400,000 in penalties, assuming the settlements are approved by the federal district court hearing the case.

      The settlement of the federal charges will be coordinated with settlement of a class action lawsuit.

      ALLEGED LAW VIOLATIONS

      The complaint charges Fairbanks with violating several federal laws, including the FTC Act, the Fair Debt Collection Practices Act (FDCPA), the Fair Credit Reporting Act (FCRA), and the Real Estate Settlement Procedures Act (RESPA) enforced by HUD.

      FTC Act Violations
      The FTC alleges that, in servicing loans, Fairbanks frequently:

      • failed to post consumers mortgage payments in a timely and proper manner, and then charged consumers late fees or additional interest for failing to make their payments on time;
      • charged consumers for placing casualty insurance on their loans when insurance was already in place;
      • assessed and collected improper or unwarranted fees, such as late fees, delinquency fees, attorneys fees, and other fees; and
      • misrepresented the amounts consumers owed.

      Fair Debt Collection Practices Act
      The complaint also alleges that Fairbanks violated several provisions of the FDCPA, in connection with collecting loans that were in default when Fairbanks obtained them.

      Specifically, the FTC alleges that the defendants falsely represented the character, amount, or legal status of consumers debts; communicated or threatened to communicate credit information which was known or which should have been known to be false, including the failure to communicate that a debt was disputed; used false representations or deceptive means to collect or attempt to collect a debt, or to obtain information concerning a consumer; collected amounts not authorized by the agreement or permitted by law; and failed to validate debts.

      Fair Credit Reporting Act
      The FTC alleges that the defendants furnished information about consumers payment status to consumer reporting agencies when they knew or consciously avoided knowing that the information was inaccurate. Also, when consumers informed the defendants that they disputed the reported information, the defendants did not report the dispute to the consumer reporting agencies.

      Real Estate Settlement Procedures Act
      RESPA is a federal statute that requires loan servicers to respond to borrowers written requests about their loans and to make timely insurance and property tax payments on behalf of borrowers and otherwise properly administer their escrow accounts. In the complaint, HUD alleges that the defendants failed to timely and adequately acknowledge, investigate, and respond to borrowers written requests for information about the servicing of their loans and escrow accounts. HUD also alleges that the defendants failed to make timely payments of escrow funds for insurance premiums and property taxes.

      THE SETTLEMENTS

      The settlements announced today resolve the Commissions and HUDs allegations. If approved, the settlements will require the Fairbanks corporations to pay $40 million, and Basmajian to pay $400,000, to the FTC to be used to compensate consumers who suffered harm from: (1) unauthorized late fees, (2) other fees Fairbanks imposed on consumers it deemed in default, (3) unauthorized prepayment penalties, or (4) other improper practices by Fairbanks related to consumer defaults.

      The settlements also enjoin the defendants from future law violations and impose new restrictions on their business practices. The settlements:

      • require the defendants to accept partial payments from most consumers and to apply most consumers mortgage payments first to interest and principal;
      • prohibit the defendants from force placing insurance when they know the consumer has insurance or fail to take reasonable actions to determine whether the consumer has insurance;
      • enjoin the defendants from charging unauthorized fees, and place limits on specific fees
      • require the defendants to acknowledge, investigate, and resolve consumer disputes in a timely manner;
      • require the defendants to provide timely billing information, including an itemization of fees charged;
      • prohibit the defendants from taking any action toward foreclosure unless they have reviewed the consumers loan records to verify that the consumer failed to make three full monthly payments, confirmed that the consumer has not been the subject of any illegal practices, and investigated and resolved any consumer disputes;
      • prohibit the defendants from piling on late fees in certain situations;
      • prohibit the defendants from enforcing certain waiver provisions in forbearance agreements that consumers had to sign to prevent foreclosure; and
      • prohibit the defendants from violating the FDCPA, the FCRA, and the RESPA.

      To provide further remedial relief to consumers harmed by its practices, Fairbanks will correct certain open accounts that may have been classified wrongly as delinquent, re-classify these accounts as current, and report to any consumer reporting agency previously provided with information about the consumers account that the account is current and that the prior record of delinquency should be removed from the consumers report.

      Today, the Commission filed the two settlements in U.S. District Court for the District of Massachusetts in Boston for approval. The settlement with the corporate defendants will not become final until the related class action settlement is approved in final form by the Boston court. This process may take several months.

      If the court approves it, affected consumers should receive a notice of the settlement in the mail that will explain how they can participate in the redress program. The Commissions toll-free consumer hotline regarding the settlement is 1-877-862-0886. Consumers who have changed their address recently may provide updated contact information by calling the hotline. Consumers also can find information about the settlement on the FTCs Web site at www.ftc.gov. At this time, it is not necessary for consumers to take any action other than watching their mail for notice of the settlement.

      Fairbanks Capital To Refund $40 Million To Consumers...
      Read lessRead more

      Chrysler recalls 438,000 Jeep Libertys

      November 10, 2003
      Chrysler is recalling about 438,000 Jeep Liberty SUVs because of problems in the front suspension. The company says it received 47 complaints about the problem. Some consumers said they lost control of the vehicle and crashed. Others said a wheel fell off.

      Chrysler says the problem stems from the lower ball joint seal, which can become damaged and lead to a loss of control.

      The incidents reported so far did not result in any injuries, the company said.

      As part of the worldwide recall, all of the vehicles will be fitted with a heat shield. About 318,000 will receive new ball joints, and 120,000 vehicles will be inspected.

      The recall includes Jeep Libertys from the 2002 model year, as well as 2003 models built before the end of March this year.

      In addition, Chrysler is recalling 10,000 of its new Chrysler Pacifica wagons to install a secondary clip to the fuel line to keep it secure.

      Chrysler recalls 438,000 Jeep Libertys...
      Read lessRead more

      FTC Charges BodyFlex with False Advertising

      Challenges Claim That BodyFlex Users Will "lose 4 to 14 inches in the first 7 days"

      The Federal Trade Commission has sued the marketers of the BodyFlex System for falsely advertising that BodyFlex can help consumers lose weight fast.

      The BodyFlex System includes a gym bar and a breathing technique. The BodyFlex 18-minute "workout" involves several minutes of deep breathing and stretching, followed by exercises with the BodyFlex Gym Bar.

      The defendants have promoted BodyFlex through a heavily aired national infomercial and on the Internet at www.bodyflex.com. The defendants claim that, "in just seven days you can lose from four to 14 inches guaranteed with BodyFlex Plus."

      According to the ads, the BodyFlex breathing is the "secret to burning fat," because it supposedly "will supercharge your blood with fat-burning oxygen and you"ll lose inches fast." BodyFlex ads emphasize that the "workout" takes only minutes a day and can be performed sitting down. The defendants stress that the "program is not about food."

      "These claims of fast, easy inch loss without diet or exercise exploit the millions of overweight Americans looking for an effective weight-loss and exercise program," said Howard Beales, Director of the FTC"s Bureau of Consumer Protection. "Frankly, we think BodyFlex"s breathtaking claims are full of hot air."

      The FTC complaint alleges that the defendants have falsely claimed that:

      • BodyFlex causes users to lose from four to 14 inches across six body areas in the first seven days without reducing calories;
      • BodyFlex causes users to burn enough body fat to achieve the claimed inch loss in seven days; and
      • a clinical study proves that BodyFlex causes significant fat and inch loss in the first seven days.

      The complaint, filed in federal district court, names as defendants Savvier Inc. and Savvier LP, California companies; their principals, Jack Ching Chung Chang, Jeffrey T. Tuller, and Keith Greer; and BodyFlex "creator" and spokesperson Greer Childers.

      The FTC asked the court to issue an immediate temporary restraining order for all defendants, except Greer Childers, to prohibit them from making the challenged false claims, and freezing their assets, and require an immediate accounting.

      Childers has stipulated to the entry of a temporary order that prohibits her from making the challenged claims, freezes certain of her assets, and requires an accounting. The FTC also is seeking preliminary and permanent injunctive relief, including redress for BodyFlex purchasers.

      According to the FTC, the BodyFlex infomercial has been among the 10 most frequently aired infomercials in weekly U.S. rankings, and has aired over 2,000 times from February through September 2003 on national cable channels such as Bravo, The History Channel, and Home & Garden Television. The defendants have spent approximately $22 million to promote BodyFlex through the infomercial, according to the FTC.

      The defendants have sold BodyFlex for $39.90, plus $14.95 shipping and handling (totaling $54.85) directly to consumers through their toll-free number or Web site. The product also has been offered for sale on third-party Web sites, such as www.tvproductsonly.com.

      Consumer Tips

      The FTC is issuing two updated consumer publications about exercise equipment, "Avoiding the Muscle Hustle" and "Pump Fiction: When Marketers Overextend Their Fitness Claims." These publications, found at www.ftc.gov/dietfit, offer tips to consider and questions to ask before buying exercise equipment.

      To lose weight and get in shape:

      1. Commit to sensible eating and moderate exercise.
      2. Remember: the benefits of exercise require exercise " not gizmos or gimmicks.
      3. Be patient. Losing weight and inches takes time.

      The FTC hotline number for BodyFlex is 202-326-2935.

      FTC Charges BodyFlex with False Advertising...
      Read lessRead more

      Louisiana Eye Surgeon Fined $1 Million

      November 5, 2003
      A Lafayette, La., ophthalmologist and eye care center he owns will pay $1.1 million in civil penalties for violating federal laws related to the conduct of clinical studies. The violations involved studies of a laser system built by the ophthalmologist for LASIK treatment of nearsightedness.

      In a settlement agreement with the Food and Drug Administration (FDA), Leon C. LaHaye, M.D., will pay $150,000 and his LaHaye Center for Advanced Eye Care of Lafayette will pay $950,000 for clinical study violations that occurred on at least 175 occasions. In June 2002, FDA disqualified LaHaye from conducting further clinical studies.

      This penalty sends a clear message that FDA will not tolerate conduct that can put patients at risk and erode the trust between research subjects and the medical research community, said FDA Commissioner Mark B. McClellan, M.D., Ph.D.

      To protect patients and to help ensure that tests of unapproved products will yield useful data, FDA regulations establish strict conditions under which clinical studies of medical devices may occur.

      For example, studies of high risk devices such as ophthalmic lasers must be conducted according to an investigational plan reviewed and approved by FDA and an investigator must obtain informed consent from each participant. In addition, the device cannot be used on patients before the study begins.

      The civil money penalties complaint filed by FDA alleged that Dr. LaHaye and his center:

      • Used an unapproved laser on patients before the study began;
      • Treated more subjects than allowed under the study plan that was approved by FDA;
      • Ignored parameters of the study by treating nearsightedness beyond the permitted range and by treating astigmatism and both eyes of some patients;
      • Failed to submit complete, accurate, and timely reports to FDA about the ongoing study; and
      • Misrepresented to FDA that Dr. LaHaye was using an FDA-approved laser to treat patients when, in fact, the procedures were performed with an unapproved, experimental laser.
      A Lafayette, La., ophthalmologist and eye care center he owns will pay $1.1 million in civil penalties for violating federal laws related to the conduct of...
      Read lessRead more

      OSI Financial Settles Charges

      Company allegedly misrepresented key loan terms to homeowners in the subprime market

      Illinois-based mortgage broker Mark Diamond and his company, OSI Financial Services, Inc., have settled charges by the Federal Trade Commission and Illinois Attorney General Lisa Madigan that they misrepresented key loan terms to homeowners in the subprime market.

      The settlement requires the defendants to pay $270,000 in consumer redress. It also enjoins them from misrepresenting loan terms, requires them to tape record future loan closings, and imposes other restrictions on defendants business practices.

      In July 2002, the FTC and the Illinois Attorney Generals office filed a complaint against Mark Diamond and OSI Financial Services, Inc. alleging that the defendants engaged in numerous deceptive practices to induce consumers to take out mortgage loans. A significant number of these loans were 15-year balloon loans, or loans for which the final payment is substantially larger than the other monthly payments.

      The FTC/Illinois complaint alleged that the defendants, in many instances, misrepresented various loan terms, including the balloon payment, interest rate, prepayment penalty, and monthly payment amount.

      According to the complaint, Diamond presented consumers with incomplete closing documents for signature in which the terms of the loan such as the annual percentage rate, monthly payment amount, and balloon payment amount were left blank, and required some borrowers to sign loan brokerage agreements in which the broker fee was left blank. The complaint further alleges that Diamond filled in the amount of the broker fee after the loan closing. This fee, which the borrower financed and paid out of the loan proceeds, was often 10 percent of the loan amount.

      We will not allow unscrupulous mortgage brokers to turn the American dream of home ownership into a nightmare, said Howard Beales, Director of the FTC's Bureau of Consumer Protection. This case is a wake-up call to brokers nationwide who are engaged in deceptive practices.

      Mark Diamond and OSI took advantage of consumers who were trying very hard to buy a home despite past credit problems, Madigan said. As it turns out, the consumers biggest obstacle was not their credit rating it was a con artist.

      The settlement bars the defendants from misrepresenting:

      • The payment schedule of the loan or the monthly payment amount, interest rate, annual percentage rate, finance charge, loan amount, or loan term;
      • The existence or nonexistence of any balloon payment;
      • The amount of cash to be disbursed to the borrower out of the loan proceeds;
      • That the loan does not have a prepayment penalty;
      • That the interest rate is fixed rather than adjustable or adjustable rather than fixed; and
      • That the monthly payment amount includes the payment into an escrow account for property taxes and insurance.

      The consent decree also orders that the defendants provide consumers with an advance disclosure statement and consumer education brochure for every transaction in which the defendants offer consumers a mortgage loan, and enjoins them from conducting any loan closing. It also requires that, for a period of three years, the defendants must tape record the loan closings for all loans they broker.

      The settlement requires the defendants to pay $270,000 in consumer redress. It also enjoins them from misrepresenting loan terms, requires them to tape rec...
      Read lessRead more

      AT&T Faces $780,000 Do-Not-Call Fine

      Company allegedly failed to remove names when asked to do so

      The Federal Communications Commission (FCC) wants to fine AT&T $780,000 for violating do-not-call provisions that have been in effect for more than ten years. The fine is for a long-existing but widely ignored rule that requires individual companies to delete the names of consumers who specifically ask a company to stop calling them.

      AT&T should be able to afford the fine. It won a $3.5 million contract to set up -- you guessed it -- the Do-Not-Call registry a few months ago. The initial six-month contract can be renewed for up to ten years.

      While the action is not part of the recently-enacted Do Not Call registry, it is an indication that the FCC has taken note of the political clout represented by the 54 million Americans who have signed for the Do-Not-Call list.

      The irony was not lost on the telemarketing industry, whose spokesmen rushed to say that if the FCC had enforced existing regulations the broader Do-Not-Call registry might not have been needed.

      "For a decade they haven't done their job. Now they're adding new regulation," Tim Searcy of the American Teleservices Association told The New York Times.

      The commission says it received 360 complaints about AT&T from December 2002 to August 2003 from consumers who had previously informed AT&T that they did not want any more telemarketing calls from the company.

      The fine is calculated at $10,000 each for 78 calls placed to 29 of the complaining consumers. The fine could have been as high as $250,000 per call violation under FCC rules but an FCC spokesman said that $10,000 was the figure it had used previously in cases involving unsolicited faxes.

      The proposed fine is meant to be an indication that the commission, long derided by consumer advocates as being asleep at the wheel, has gotten the message that voters are fed up with incessant telemarketing calls.

      "We have made enforcement of the Do-Not-Call lists our No. 1 priority," said David Solomon, head of the commission's enforcement bureau.

      Since late June, 54.3 million Americans have signed up for the Do-Not-Call registry and have so far filed 56,000 complaints alleging they received calls after the cut-off date.

      AT&T Faces $780,000 Do-Not-Call Fine...
      Read lessRead more