Telemarketer agrees to pay $1 million civil penalty for TSR violations

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A "voice broadcaster" charged with making tens of millions of illegal automated telemarketing calls has agreed to pay a $1 million civil penalty under a settlement reached with the Federal Trade Commission and the U.S. Department of Justice.

According to the complaint, which was filed by the DOJ on Dec. 29, 2005, in the U.S. District Court for the Middle District of Florida, Orlando Division, Ormond, Beach, FL-based The Broadcast Team and its two principals, Robert J. Tuttle and Mark S. Edwards, violated the FTC's Telemarketing Sales Rule in the course of using "voice broadcasting" to call millions of U.S. consumers using automated dialers and prerecorded messages.

According to the complaint, many of the numbers TBT called were on the DNC Registry, making the calls themselves unlawful. The FTC also charged that TBT failed to pay for access to the Do Not Call Registry's numbers in numerous instances.

Furthermore, the FTC alleged that when the calls TBT made were answered by people, instead of voice mail or answering machines, TBT ended the call or hung up after playing a recording. The TSR limits telemarketers' use of recorded messages by requiring that calls answered by a person be connected to a live representative within two seconds.

This restriction on "abandoning calls" by hanging up or playing a recording when someone answers applies to telemarketing calls to solicit sales of goods or services, and to calls from for-profit telemarketers soliciting charitable contributions.

TBT caused more than 64 million calls to be abandoned in telemarketing campaigns on behalf of debt management services-related companies, according to the complaint. TBT also abandoned more than 250,000 calls in delivering recordings soliciting ticket sales, and more than 200,000 calls in delivering recordings soliciting charitable contributions.

The proposed settlement resolves the civil penalty action brought by the DOJ against TBT and its owners based on these alleged "abandoned calls" and violations of the TSR's Do Not Call provisions.

TBT had argued that the TSR did not apply to its delivery of prerecorded messages and should not apply to its plans to use prerecorded messages to solicit funds on behalf of a charity. But in a related case pending in the same court, U.S. District Court Judge Anne Conway rejected TBT's legal arguments last April.

The court ruled that TBT is required to comply with the TSR, and that exempting TBT from the TSR's requirements would frustrate the FTC in achieving its goal of protecting the residential privacy of consumers.

To settle this action, TBT and its owners have agreed to a proposed court order that will prohibit them from making similar calls in the future and require them to pay the $1 million penalty.

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