First DNC Action Sparked By Call To FTC Commissioner

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NEW YORK -- The first national no-call action filed by the Federal Trade Commission resulted from an ill-advised telemarketing call to an FTC commissioner, an agency official said yesterday during a session at the DMD New York Conference & Expo.

National Consumer Council, Santa Ana, CA, purchased a subscription to the national no-call registry, but it failed to block a call to FTC commissioner Orson Swindle, said Thomas A. Cohn, FTC senior assistant regional director for the northeast region.

NCC became the subject of an undercover investigation by the FTC and received no advance notice that an inquiry was underway because of allegations of fraud as well as no-call violations, Cohn said. The FTC announced a civil suit against NCC on May 5.

The NCC case remains the sole enforcement action undertaken by the FTC under the no-call registry. Other "hybrid" cases involving fraud and no-call violations, as well as "pure" no-call cases, are forthcoming, though they remain non-public, Cohn said.

In pure no-call investigations, the FTC will put a telemarketer on notice that it is the subject of an inquiry and attempt a negotiated settlement before taking the case to court, Cohn said. Unlike the Federal Communications Commission, which must issue a citation to non-telecommunications carriers before pursuing fines, the FTC is not required to issue a warning before seeking monetary penalties.

Telemarketers should be putting policies and procedures in place regarding compliance and for addressing consumer complaints, said Joseph Sanscrainte, director of regulatory affairs for Call Compliance, Glen Cove, NY, who is also a DM News columnist. Such preparation will minimize damage if the FTC or FCC make inquiries.

One company sends a letter of apology to consumers who complain of no-call violations, Sanscrainte said.

"The most daunting thing here is that 2003 was in some respects a prelude to what will happen in 2004," Sanscrainte said. "All the rules developed in 2003 are now going to be enforced."

Both Sanscrainte and Cohn urged telemarketers to take investigative demands made by the FTC seriously. Some companies have shown a cavalier attitude when it comes to FTC inquiries.

"The one thing not to say to the FTC is, 'Just show us what complaints you have, we'll look into it,' " Cohn said.


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