The Federal Trade Commission (“FTC”) recently sent a strong message in enforcing its demands for information from certain VoIP providers. As part of an investigation into alleged robocall violations, the FTC sent letters demanding information from VoIP providers concerning certain telemarketing users. When the service providers failed to comply with the demands, the FTC sued them to force compliance and participation in the investigation. These FTC VoIP actions are notable for their targeting service providers that failed to cooperate as part of FTC enforcement proceedings, instead of just targeting the allegedly offending telemarketer(s).
How is the FTC addressing VoIP robocall violations?
The FTC enforces certain telemarketing laws, including the Telemarketing Sales Rule (“TSR”). It often does so through issuing Civil Investigative Demands (“CIDs”) to companies, demanding documents and information relevant to an FTC investigation. These CIDs are, effectively, government subpoenas for information. Recipients can lodge legal objections to requests contained in CIDs, but compliance is not optional. Where a company fails to comply, the FTC can bring a lawsuit to get a court of law to order compliance and, sometimes, impose monetary penalties on the target of the CID.
Recently, the FTC served CIDs on several VoIP providers. These providers produced very few documents and provided very little information in response. Several providers delayed in complying or offering any meaningful cooperation for months. Tired of waiting, the FTC successfully sued several providers to force them to produce documents and information concerning, for example: customer robocall complaints, call data and history associated with telemarketers that were targeted by FTC investigations, and policies and procedures that the VoIP providers use to comply with applicable telemarketing laws.
Why do the FTC VoIP actions matter to your business?
These FTC VoIP service provider-related actions serve as an important reminder that the first rule of FTC investigations is to engage. When reacting to receiving a CID, it is important to be prompt, reasonable, and calm. The FTC does not have unlimited authority to demand any document or get any piece of information. And the FTC is not the final arbiter of what a particular telemarketing statute or rule means. Still, engaging in a conversation with the FTC and providing some meaningful information is usually more productive than simply trying to stonewall.
The procedures for objecting to a CID are specific. Following the correct procedures and adhering to the tight deadlines is just as important as responding to the substance of the demand. Whether you are the target of an FTC investigation or just a source of information, carefully complying with CID procedures is important if you want to avoid ending up in court.
Hire experienced telemarketing attorneys.
The best way to help ensure that you comply with the terms of a CID, while protecting your business at the same time, is to hire experienced attorneys who know how to achieve both ends. The attorneys at Klein Moynihan Turco have years of experience in helping businesses navigate the tricky waters of an FTC inquiry. KMT can help your business stay on the right side of the law and avoid the courthouse altogether.
If you need assistance with updating your telemarketing policies or if you have been served with a state or federal civil investigative demand, email us at firstname.lastname@example.org 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 seeking 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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