FTC Settles with Service Provider over Robocall Violations

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Robocalls are telephone calls that use both a computerized auto-dialer and a computer-delivered pre-recorded message.  Robocalls tend to receive a heightened level of scrutiny under various state and federal telemarketing laws – and that scrutiny is expected to increase when new Telephone Consumer Protection Act (“TCPA”) rules take effect on October 16, 2013.

Regulatory Action

As part of its increased focus on robocalling, the Federal Trade Commission (“FTC”) brought charges against Skyy Consulting, Inc. (doing business as CallFire) alleging violations of the FTC’s Amended Telemarketing Sales Rule (“ATSR”).  CallFire provides voice-over-Internet (VOIP) voice broadcasting services to its clients, which involve computer delivered messages broadcast to many consumers simultaneously.

The FTC alleged that CallFire assisted its clients in broadcasting pre-recorded calls to consumers without their prior written consent in violation of the ATSR and that CallFire “either knew, or consciously avoided knowing, that their clients were violating the [ATSR].”  CallFire and the FTC reached a settlement that:

…bars [CallFire] from initiating illegal robocalls or otherwise violating the [ATSR]…requires CallFire to review all pre-recorded messages it delivers and terminate its contracts with any clients who are found to be delivering illegal pre-recorded telemarketing calls. In addition, within 120 days, CallFire must review all existing pre-recorded messages hosted on its platform to ensure [CallFire is] complying with the [ATSR].

How to Protect Your Business

As the CallFire case makes clear, entities that fail to comply with state and federal telemarketing requirements may find themselves facing regulatory action from the FTC and/or state regulatory bodies, as well as consumer class action litigation.

If you are interested in learning more about this topic or need to review your telemarketing practices, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

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