Thursday, December 15, 2005

DirecTV to Pay Record "Do Not Call" Fine

DirecTV has agreeed to pay a $5,335,000 fine to the Federal Trade Commission over allegations it called numbers on the national "Do Not Call" list.

The penalty may not seem high by U.S. coporate standards, but it is the largest fine every paid for a "Do Not Call" violation, and, in fact, is the largest civil penalty the FTC has ever obtained in enforcing a consumer protection law. (Anti-trust violation penalties, on the other hand, can be higher.)

The FTC, which enforces regulations related to the Do Not Call list, charges that DirecTV and companies it hired have called numbers on the list since October of 2003.

“This multimillion dollar penalty drives home a simple point: Sellers are on the hook for calls placed on their behalf. The Do Not Call Rule applies to all players in the marketing chain, including retailers and their telemarketers," said the FTC Chairman Deborah Platt Majoras.

The FTC filed complaints against DirecTV and five telemarketing firms. Two of those companies have also settled.

The FTC, through the DOJ, alleged that DirecTV called people on the list, and provided substantial assistance and support to a telemarketer, Global Satellite, even though it knew, or consciously avoided knowing, that Global Satellite was calling numbers on the Do Not Call list. The complaint also alleged that Global Satellite, directly or through another entity – abandoned calls to consumers by failing to put a live sales representative on the line within two seconds after the called consumer completes his or her greeting, as required under the law.

DirectTV must also terminate any marketer of its products who they know or should know is making cold calls to consumers without express, written authorization from DirecTV.. The proposed settlement also prohibits the company from assisting and facilitating any telemarketer it knows or consciously avoids knowing is violating the Telemarketing Sales Rule. The proposed settlement also imposes monitoring requirements on DirecTV.

The FTC also got orders against two telemarketers, Communication Concepts and American Communications, for $25,000 and $50,000. Judgments of $205,000 against Communications Concepts and $746,300 against American Communications were suspended based on those companies’ inability to pay.

Litigation continues against certain individual officers of the some telemarketing companies.


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