After cracking down on several Florida-based real estate companies for making millions of robocalls earlier this year, the Federal Trade Commission (FTC (News - Alert)) has again filed lawsuits against three companies – this time it’s by companies wanting to sell some are referring to as questionable auto warranties.
Last month, the FTC filed multiple lawsuits against three companies – Voice Touch and Transcontinental Warranty, both of Florida, and Illinois-based Network Foundations – these companies violated the Do Not Call (DNC) registry law by making more than 1 billion robocalls since 2007 generating more $10 million in business.
The federal government launched the first DNC List in 2003 and has register 167 million people to have their phone numbers removed from telemarketers' lists. To date, FTC has taken 35 companies to court and collected more than $16 million in penalties and fines.
The commission says it was deluged last year with several thousand consumer complaints after Florida realestate outfit Westgate Resorts apparently flouted regulations by calling people on the list. The biggest case every brought against a company was the satellite television providerDirecTV Inc., which ultimately paid a $5.3 million settlement.
According to the FTC’s complaint against the Westgate, the company used outbound telemarketing to sell timeshares and vacations at timeshare resorts to consumers nationwide. Westgate bought these numbers from an Internet-based lead generator that collected contact information in connection with offering free and discounted products to consumers on its Brandarama.com Web site, according to regulators.
In response the FTC and attorneys general in 40 states have been cracking down on companies, as well as the telemarketing firms they use. Complaints filed against the warranty companies by the FTC in U.S. District Court in Illinois say the companies violate federal telemarketing laws by using robocalls for the aggressive automated pitches.
FTC Chairman Jon Leibowitz (News - Alert) in a statement called these telemarketing schemes one of the most aggressive the commission has ever encountered. "I'm not sure which is worse, the abusive telemarketing tactics of these companies or the way they try to deceive people once they get them on the phone," Leibowitz said. "Either way, we intend to shut them down."
According to papers the FTC filed with the court, the robocalls have prompted tens of thousands of complaints from consumers who are either on the Do Not Call Registry or asked not to be called. Five telephone numbers associated with the defendants have generated a total of 30,000 Do Not Call complaints. Consumers received the robocalls at home, work, and on their cell phones, sometimes several times in one day. Businesses, government offices and even 911 dispatchers also have been subjected to the calls, according to the FTC.
How it works
After answering a call, the pre-recorded calls inform listeners their vehicle warranty is about to expire and that they should “extend coverage before it is too late.” They are told to “press one” to speak to a “warranty specialist.” The “specialists” then mislead consumers into believing that their company is affiliated with the dealer or manufacturer of the consumer’s vehicle.
In their robocalls, the companies dial every phone number within a particular area code and prefix sequentially, without knowing anything about the vehicles of the consumers they call, or whether those consumers’ numbers are on the Do Not Call Registry, the FTC alleged. Consumers who asked that the calls be stopped often were met with “abusive behavior” or were simply hung up on, according to the papers filed with the court.
However, there is a way for companies to protect themselves against the federal DNC list fines by using VanillaSoft’s Teleblock DNC screening and blocking service. Dallas-based lead management software and telemarketing software maker VanillaSoft provides a CRM solution that helps firms improve their lead generation, allowing managers to administer all their leads, reps and call centers from a single Web-based dashboard.
VanillaSoft can dial virtually any phone; analog, digital or VoIP, so you get an instant boost in productivity without having to buy an expensive dialer.
TeleBlock is an important part of a group of tools that help businesses to comply with complicated calling laws, including call recording and the restriction of making calls outside legal calling hours.
Tim Gray is a Web Editor for TMCnet, covering news in the IP communications, call center and customer relationship management industries. To read more of Tim’s articles, please visit his columnist page.
Edited by Tim Gray