Telemarketing Lawsuits and Scams

Do you like getting scammy robocalls? You’re not alone. The Federal Trade Commission (FTC) doesn’t either.

With the help of law enforcement authorities in all 50 states, their Operation Stop Scam Calls initiative has cracked down on illegal telemarketing calls involving more than 180 actions targeting operations responsible for billions of calls to U.S. consumers and selling more than 700 million telemarketing leads.

Count this as one more step to curb the onslaught of robocalls Americans receive, a spokesperson for Robokiller told ConsumerAffairs. 

"[The FTC's] efforts thus far have shown the industry can shut down well-known robocalls and facilitators of these calls. It’s clear the government’s focused efforts against prominent scams and holding the responsible parties accountable are proving effective."

How effective can this move be? Robokiller thinks hugely effective.

"We’ve seen the government successfully crack down on the infamous car warranty robocalls, which went from being the number one robocall to now making up less than 2% of robocalls. Then the government's efforts to curb student loan robocalls made an impact and reduced the frequency of these harmful scams that target vulnerable populations," the company said.

Tricking people into signing up was what did them in

The FTC targeted companies it says has crossed the line in regards to getting consumers to sign up for marketing solicitations.

The FTC complained that one company operated as a quasi-consent farm lead generator, seeking to collect, through a single click of a website button or checkbox, consumers’ general agreement to receive marketing offers, including robo- and other telemarketing calls, from dozens of third parties.

Another company, the FTC claims, duped consumers into sharing their contact information in exchange for receiving local job listings.

“The real purpose of the sites, however, was to collect and aggregate ‘leads’ consisting of consumers’ personal information and purported consent to receive telemarketing robocalls,” the FTC said.

Once the company had that information in hand, it would supposedly then sell those leads to telemarketing clients, who in turn, rely on consumers’ supposed permission to justify robocalling consumers.

The good news is that four of the five companies that the FTC charged have settled with the agency. Not only did each pay hefty fines but more importantly for the consumer, they may never hear from those companies again and if they do, the pitch will be far closer to the truth.

For example, Vision Solar and Solar Xchange will be prohibited from misrepresenting that they are associated with any utility or government agency, making unsupported claims regarding the cost of installing solar panels, or taking part in “abusive” telemarketing practices.

How consumers can help in the meantime

What the FTC has done is impressive to say the least, but given the cockroach-like qualities of many of robocall-related companies and the growing scourge of robo texts, consumers can't lay down arms. Not just yet. 

In the meantime, the FTC and Robokiller says there are things consumers should remember and can do to help out:

• Know your rights. Unless the company has your written permission to call you that way, a robocall trying to sell you something is illegal. Read the article Robocalls for more.

• Spot the scams that use illegal robocalls. Scams are often associated with illegal robocalls. They might try to convince you it's from the government, tech support, or your auto warranty company, but it's not. You're being scammed. Listen to some examples of robocall scams.

• Hang up on phone scams. You may receive a call from a scammer claiming to have won a prize but you need to pay for it. Don’t. It’s a scam. In other cases, the scammer may threaten arrest if you don't pay up immediately. Also a scam. Hang up or delete the voicemail, and whatever you do, don’t press any number or call back. For more advice, read Phone Scams.

• Report scams and illegal robocalls. In order to prevent scams and illegal robocalls, reporting is essential. Report scams at ReportFraud.ftc.gov and report illegal robocalls at DoNotCall.gov.

• Don't press "1". It may seem like an innocuous thing because we're so used to do doing it, but Robokiller says the resist pressing "1" on any call that you receive. The reason is that the robo company may have built some hook into the call where pressing "1" signifies that the consumer is giving their permission to receive even more telemarketing. .

People of a certain age may remember when a landline phone only rang when a friend or family member wanted to talk. Not anymore. Robocallers have figured out there’s a massive untapped audience they can turn into a tidy little revenue generator.

So much, in fact, that illegal and spoofed robocalls have become the FCC's top consumer complaint and the agency’s top consumer protection priority for the 100 million Americans who still have landline phones. 

If you don’t have a landline phone, you may push that metric aside, but those landline lovers received more than 5 billion unwanted calls just last month, an increase of more than 2 billion unwanted calls since July, according to imp's latest Landline Report.

Key findings of the study 

"We're seeing a big uptick in the unwanted call volume on landline phones as we head into the election season," said imp's president George Lightbody.

"Close to one-third of all U.S. households rely on their landline phone as an essential tool for communicating. But it is becoming increasingly difficult for landliners to cut through the noise and actually use their phones."

Here’s what imp’s study found:

• 83% of landline owners are actively bothered by unwanted calls: Nearly one-third of all households in the U.S. still have a landline. Of those households, eight out of every 10 households report being actively bothered by unwanted landline calls.
• 87% of landline calls are unwanted: Households with a landline phone receive on average 46 calls per week. Landline users classify 40 of these 46 calls as "unwanted." According to imp’s study, only six of the 46 calls are "wanted" calls from friends and family.
• Traditional call blocking is only a 5% solution: Of the 40 unwanted calls received each week, only two would be stopped by traditional call blocking devices. All of these 40 unwanted calls are, essentially, what imp calls “telephone invaders.”

The FCC refuses to give up

The problem with robocalls is that it’s basically a game of whack-a-mole. No sooner does the FCC whack one robocall company but another pops up. Unfortunately, advancements in technology make it cheap and easy to make massive numbers of robocalls and to "spoof" caller ID information to hide a caller's true identity.

FCC Chairwoman Jessica Rosenworcel and her staffers get these calls too. As she said during one of the Commission’s monthly meetings: “I’m a consumer, too. I receive robocalls at home, in my office, on my landline, on my mobile. I’ve even received multiple robocalls sitting here on this dais. I want it to stop.”

The FCC knows that these calls are a major concern of millions of Americans, and is sending out cease-and-desist letters like there’s no tomorrow. Until the day when there’s no more robo-anything, the agency suggests that consumers with both landline phones and digital phones take these steps to keep robocallers at bay:

• Don't answer calls from unknown numbers... Let them go to voicemail.

• If the caller claims to be from a legitimate company or organization, hang up and... call them back using a valid number found on their website or on your latest bill if you do business with them.

• If you answer and the caller (often a recording) asks you to press a button to stop receiving calls... or asks you to say "yes" in response to a question, just hang up. Scammers often use these tricks to identify, and then target, live respondents, or to use your "yes" to apply unauthorized charges to your bill.

• If you answer and the caller asks for payment using a gift card... it's likely a scam. Legitimate organizations like law enforcement will not ask for payment with a gift card.

• If you receive a scam call... file a complaint with the FCC Consumer Complaint Center by selecting the "phone" option and selecting "unwanted calls." The data we collect helps us track trends and supports our enforcement investigations.

• If you have lost money because of a scam call... contact your local law enforcement agency for assistance.

• Ask your phone company if it offers a robocall blocking service. If not, encourage them to offer one. You can also visit the FCC's website for more information about illegal robocalls and resources on available robocall-blocking tools to help reduce unwanted calls.

• Consider registering your telephone numbers in the National Do Not Call Registry... Lawful telemarketers use this list to avoid calling consumers on the list.

Indiana has struck a blow against robocalls, even those carried out by non-profit organizations.

The U.S. Supreme Court declined to review a lower court's ruling that upheld the Hoosier state's anti-robocall law, which bars pre-recorded messages sent to consumers' phones without their consent.

Patriotic Veterans, Inc., a non-profit organization, asked for the review to make an exception for non-profits. It argued in court that the Indiana law violates the First Amendment to the Constitution.

Now that the Supreme Court has settled the issue, it is possible other states may pass laws based on the Indiana statute.

Indiana argued that political and non-profit groups are allowed under the law to make calls, even to numbers on the Do Not Call list, as long as the calls are placed by a human operator and don't use a recorded voice.

More intrusive

Part of the objection consumers have to robocalls is the technology allows an operation to place many calls at once. A human being is required only if a consumer answers the phone and remains on the line. It results in many more telemarketing calls than in a single person called individual numbers. The efficiency it provides is one reason telemarketers now favor robocalling.

Indiana Attorney General Curtis Hill praised the high court's decision to let the state law stand.

“Every day, telemarketers seek to burden residences with automated, pre-recorded phone calls conveying unwanted messages," Hill said. "Simply put, without this law they would be a nuisance.”

Hill says his office received more than 15,000 complaints last year about unwanted calls, the majority of which were robocalls.

Big increase in calls

A 2016 report by the YouMail National Robocall Index (YNRI) estimated that as many as 2.3 billion robocalls were made in the U.S. in the month of January alone. The report said nearly one in six phone numbers calling the average consumer is a robocall.

While some robocalls are perfectly legitimate -- your dentist might use such a system to confirm your appointment -- the technology has recently been deployed by scammers.

Instead of a solitary scammer dialing up potential victims, getting into his pitch, only to have the target hang up on him, technology can make thousands of calls and play a recording when a potential victim answers.

Most people are going to hang up, but the few who respond are connected to a person who then tries to reel them in. It makes the scam a lot more efficient and dangerous.

A federal court has ordered pay TV provider Dish Network to pay a record $280 million fine to the U.S. government and four states for illegal robocalls to consumers.

U.S. District Judge Sue Myerscough's ruling came eight years after the suit was filed by the U.S. Justice Department and California, Illinois, Ohio, and North Carolina. Dish Network immediately announced it would appeal, calling the judgment unfair.

The suit came after consumers complained about receiving robocalls pitching Dish Network services. An investigation determined there had been an estimated 55 million illegal calls.

Bloomberg News quotes a Justice Department spokeswoman as saying the fine, which will be split among the federal government and the four states, is the largest ever for a robocall-related violation of the Telemarketing Sales Rule (TSR).

Supervision of telemarketing activities

The judge also took the additional step of imposing court-ordered supervision of Dish Network's future telemarketing activities. She stopped short of granting the plaintiffs' request that Dish be barred from any telemarketing activities in the future.

The case is similar to one Dish Network lost in state court in North Carolina earlier this year. In January, a Greensboro, N.C. jury awarded plaintiffs $20 million in a class action suit stemming from alleged violations of the Do Not Call law.

The company's defense was its claim that the 51,000 calls were placed by independent contractors outside its control. But the jury found Dish Network was responsible for the things its contractors did on its behalf. Dr. Thomas Krakauer, the class representative, said at the time that the case was always about enforcing the Do Not Call law and protecting consumers from nuisance telemarketing calls.

'Corporate shell game'

Attorney Brian Glasser, part of the team representing the plaintiffs, said the argument that contractors were responsible for the illegal calls amounted to what he called "a corporate shell game," allowing Dish to sign up new customers through illegal telemarketing practices but avoid legal responsibility.

Telemarketing is regulated at the federal level by two statutes: the Telephone Consumer Protection Act of 1991 (TCPA) and the TSR. The Federal Communications Commission (FCC) derives its regulatory authority from TCPA, while the Federal Trade Commission (FTC) is responsible for enforcing TSR.

The FTC reports a significant increase in the number of illegal robocalls because internet-powered phone systems have made it cheap and easy. So far, the FTC says it has filed more than a hundred lawsuits against over 600 companies and people accused of making billions of illegal robocalls and other Do Not Call violations.

A jury in Greenboro, N.C., has awarded plaintiffs with a $20.5 million verdict against DISH Network. The class action case stems from alleged violations of the Do Not Call law.

The jury found that DISH was liable for more than 51,000 telemarketer calls placed by a DISH dealer to consumers who had placed their numbers on the national Do Not Call list. In the end, the jury said DISH was responsible for the violations and awarded the plaintiffs $400 per violation of the Telephone Consumer Protection Act.

"This case has always been about enforcing the Do Not Call law and protecting people from nuisance telemarketing calls," said Dr. Thomas Krakauer, the class representative. "I am thrilled with the jury's verdict, and thrilled we were able to win this enforcement action."

'Corporate shell game'

Attorney Brian Glasser, part of the team representing the plaintiffs, said the case was won on the strength of the DISH witnesses. He argued in court that the satellite TV provider's order entry retailer program amounted to a "corporate shell game," allowing the company to sign up new customers through illegal telemarketing practices but avoid legal responsibility.

"We believe this is the first and only jury trial for a certified class of consumers alleging Do Not Call violations," said attorney John Barrett, another of the plaintiffs' lawyers. "This was a strength-in-numbers case, one we could only bring as a class action, where we tried 51,000 claims in a single, five-day trial. We're particularly pleased with the message this verdict sends about the importance of the Do Not Call laws, the most popular consumer protection law in U.S. history."

Telephone Consumer Protection Act

The Telephone Consumer Protection Act was passed by Congress in 1991. It primarily restricts telemarketing and the use of robocallers. In 2003, it was updated to include a Do Not Call registry where consumers may register phone numbers that telemarketers may not legally call.

There are exceptions, however. In the case of a business, if you have had contact with the company as a recent customer, or requested information, the company is allowed to call you for a limited time afterward.

Charities, pollsters, and political organizations are also exempt. That's why consumers need to be on guard against a telemarketer who begins by conducting a survey but evolves into a sales pitch.

If you are on the Do Not Call list and receive a pitch for a some kind of product or service, most likely it is a scam, operating from outside the U.S. and beyond the reach of the law.