Regulators Take Action Against Robocalls

Advertising Law

Together with state, federal and local agencies, the Federal Trade Commission (FTC) announced a crackdown on illegal robocalls.

“Operation Call it Quits” included four new FTC cases and three new settlements that involved defendants that were collectively responsible for making more than a billion illegal robocalls to consumers nationwide. These actions bring the agency’s total number of actions against illegal robocalls and Do Not Call (DNC) Registry violators to 145 cases against 479 companies and 387 individuals.

Another 87 enforcement actions were filed by other regulators across the country as part of the operation.

In one of the FTC’s new cases, the agency alleged that six corporate and three individual defendants operated “a maze of interrelated operations” using illegal robocalls to contact financially distressed consumers with phony offers of credit card interest rate reduction services, often targeting seniors.

The defendants robocalled consumers, including many whose numbers were on the DNC Registry, and claimed they could lower credit card interest rates to zero for the life of a debt—for a fee, according to the complaint. The defendants also pretended to confirm the identity of consumers as a means of obtaining their personal information (including credit card numbers), the FTC said.

A Florida federal court has already granted the agency’s request for a temporary restraining order, including an asset freeze and the appointment of a receiver.

Other FTC actions targeted defendants that combined illegal telemarketing robocalls with text messaging and live telephone calls, others that employed fake or “spoofed” caller ID information, and an individual defendant who blasted more than 57 million calls to numbers on the DNC Registry in a period of just six months.

The FTC also announced settlements in three pending robocaller actions, including a case filed in 2015 against individual and corporate defendants at Lifewatch, a New York-based company that falsely promised older consumers it could provide a “free” medical alert system supposedly purchased for them by a family member or medical professional. Using credit card information obtained via “hundreds of millions” of robocalls, the defendants then charged consumers a monthly fee of between $29.95 and $39.95, the FTC said.

To settle the charges that they violated the Telemarketing Sales Rule and FTC Act, certain defendants agreed to a ban for life from telemarketing. Total judgments of $25.2 million will be partially suspended upon payment of $2 million. The defendants are also required to notify all current customers about the case and provide them with an opportunity to cancel their service.

To read more about Operation Call it Quits, click here.

Why it matters: “We’re all fed up with the tens of billions of illegal robocalls we get every year,” Andrew Smith, director of the FTC’s Bureau of Consumer Protection, said in a statement. “Today’s joint effort shows that combating this scourge remains a top priority for law enforcement agencies around the nation.” With anti-robocall sentiment running high—multiple bills are pending in Congress and proposed rulemaking is before the Federal Communications Commission—advertisers should ensure they comply with all relevant state and federal laws or face a potentially costly enforcement action.



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