Telemarketer Banned, Clients Pay $500,000 in DNC Case

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A teleservices firm agreed to a ban on telemarketing, and two of its clients paid $500,000 to settle allegations that they violated the national no-call list, the Federal Trade Commission said yesterday.


Braglia Marketing Group, Las Vegas, and its owners paid $3,500 and agreed to a ban from owning more than a 5 percent stake in or directing a company that engages in telemarketing. The company's two clients, Atlantic Palace Development and Flagship Resort Development, both of Atlantic City, NJ, agreed to pay $500,000 combined and to abide by no-call and predictive-dialer rules in the future.


The agreement between the companies and the FTC represents the second settlement of a federal no-call list case involving a cash payment. The first was a September 2004 settlement between Primus Telecommunications Inc. and the Federal Communications Commission for $400,000.


In August 2004, the FTC accused Braglia Marketing Group of calling hundreds of thousands of consumers whose telephone numbers were on the national no-call list and of violating rules that require telemarketers to keep abandoned-call rates below 3 percent. The FTC also accused Braglia, Atlantic and Flagship of failing to pay the required fee to access the no-call list.


Braglia was telemarketing on behalf of Atlantic and Flagship to sell timeshares, the FTC said. A listed number for Braglia in Las Vegas appeared to be nonfunctioning yesterday.


Frank Gorman, attorney for Atlantic and Flagship, said in a statement that the two companies had implemented additional no-call compliance measures. These include new technology, a full-time compliance officer, increased monitoring of third-party telemarketers and improved training.


"My clients have always made a good faith effort to comply with the national do-not-call list," Gorman said in the statement. "Nonetheless, they have now redoubled their efforts."


Gorman declined further comment. According to court documents, the two companies have different addresses but have the same chief financial officer, Michael L. Valenti.


An FTC spokeswoman told DM News that the settlement indicated the FTC's willingness to charge both service providers and their clients for no-call violations. Under federal no-call rules, both service agencies and clients are responsible for ensuring compliance.


In a statement, FTC chairwoman Deborah Platt Majoras said, "You cannot hire subcontractors to break the law for you and then walk away free of consequences."


In the past year, the FTC increasingly has eyed indirect participants in telemarketing. In August 2004, it announced a settlement with list management firms Carney Direct, ListData Computer Services and NeWorld Marketing. The FTC accused the firms of supplying lists for use in a telemarketing advanced-fee credit card scheme. The three firms together paid $187,500 to settle the allegations.


Braglia Marketing Group also received a suspended judgment of more than $530,000 against it in the settlement. That amount will be payable only if it is found that Braglia misrepresented its financial condition.


Scott Hovanyetz covers telemarketing, production and printing and direct response TV marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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