Don’t Lose Your Home and Car: Call a Telemarketing Lawyer

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April 6, 2017

telemarketing-lawyerLast week, the Federal Trade Commission (the “FTC” or “Commission”) announced that several Texas residents and their respective businesses have agreed to turn over their homes, cars, retirement savings and other valuables to settle a lawsuit filed in connection with the defendants’ telemarketing practices, reinforcing the importance of consulting with an experienced telemarketing lawyer before launching any telemarketing or text messaging campaign.

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Telemarketing Business and FTC Lawsuit

According to FTC court records, three Texas residents and their respective businesses sold nondurable office supplies (e.g., pens, highlighters and Post-it notes) via telemarketing channels.  The defendants allegedly earned millions of dollars by cold-calling businesses and using aggressive telemarketing sales techniques.

In December 2015, the FTC sued two of the business owners and their corporations in the U.S. District Court for the Eastern District of Texas (Case No. 15-cv-829), claiming that the defendants’ telemarketing practices violated the FTC Act, the Commission’s Telemarketing Sales Rule (“TSR”) and the federal Unordered Merchandise Statute.  Specifically, the Commission alleged that the defendants:

  • failed to disclose during telemarketing calls the total cost and quantity of office supplies sold; and
  • delivered unordered office supplies and associated bills and dunning letters to consumers.

The Commission introduced consumer complaints filed with the Better Business Bureau (BBB) as purported evidence of their “deceptive practices.”  Further, the FTC expanded its complaint in February 2016 to include claims against one defendant’s wife and her corporation.

Defendants and FTC Settle Claims

On March 23, 2017, the aforementioned defendants and the FTC reached an agreement settling the Commission’s FTC Act, TSR and Unordered Merchandise Statute claims.  Under the terms of the agreement, the defendants are permanently banned from engaging in future telemarketing activities.

Additionally, to redress consumer injuries, the settlement agreement requires the defendants to surrender to the Commission for liquidation:

  • Several homes (including a 250-acre ranch) and an office building;
  • Five automobiles (including a 1964 Corvette Sting Ray);
  • $10,000 from an Individual Retirement Account (IRA); and
  • $7,950 from an annuity account.

In the event that the defendants misstated or failed to disclose any material financial assets to the FTC, an avalanche clause will be triggered, and an additional $4,560,000 will become due.

Protect Yourself: Call a Telemarketing Lawyer

The above-referenced case illustrates the importance of complying with applicable state and federal laws, rules and regulations when conducting a telemarketing or text message marketing campaign.  Many telemarketing-related legal risks can be minimized or eliminated entirely by working with an experienced telemarketing lawyer before issues arise.  A well-planned calling or text messaging campaign strategy can help protect sellers and their affiliate marketers from substantial liability.  Further, a telemarketing lawyer can help to carefully review opt-in language, telemarketing scripts and text message flows to minimize the risk of unwelcome legal surprises in the future.

If you are interested in learning more about this topic, need to review your telemarketing practices, or are being investigated or sued by the FTC or other regulatory agency, please e-mail us at info@kleinmoynihan.com or call us at (212) 246-0900.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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David O. Klein

David O. Klein

David Klein is one of the most recognized attorneys in the telemarketing, technology, Internet marketing, sweepstakes and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

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