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Outbound Telemarketer Fined $191k
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Outbound Telemarketer Fined $191k

June 27, 2014
By Tracey E. Schelmetic
TMCnet Contributor

While outbound telemarketing, done properly, can be a valuable tool, it can also be a liability for any company not following best practices. Decades of legislation that limit who companies can call and who they can’t using technologies such as auto-dialers have put in place heavy potential fines for companies not playing by the rules and using tools such as list scrubbers, or those doing business where they are not licensed to be.

Other companies – often fly-by-night companies that cloak their real identities or operate off-shore – seem to break the rules knowingly, taking the risk that the benefits of success outweigh the costs of getting caught. They’re not always able to escape the long arm of the state attorneys general, departments of commerce and the Federal Communications Commission (FCC (News - Alert)), however.

The Minnesota Department of Commerce recently ordered Variable Marketing LLC, which does business under the name Instant Insurance Marketing, to pay a heavy $191,185 civil penalty for making fraudulent and unlicensed solicitations to Minnesota consumers. The company, a Texas LLC, is not licensed to be selling insurance in the State of Minnesota, said state officials, or even doing business at all. The company was also accused of misrepresenting itself by claiming to act on behalf of a government agency. (The robocalls voice began the call with, “This is a public service message regarding information released for drivers licensed by the Department of Motor Vehicles.”)

Variable Marketing was acting as a"lead generator” for the insurance industry, using an auto-dialer with a prerecorded voice (“robocalls”) to drum up leads, connecting willing consumers with a contact center that would find a licensed insurance agent in the customer’s state.  The investigation found that Variable Marketing robocalled 38,237 Minnesota residents in an illegal attempt to sell insurance.

"Robocall solicitations can be annoying but these are actually deceptive, misleading Minnesotans to believe that they are providing information from the government when it is really an insurance sales call," said Commerce Commissioner Mike Rothman in a statement. "Minnesotans should not have to deal with improper sales tricks when looking to protect themselves by purchasing insurance."

State investigators found that Variable Marketing received money for transferring approximately 316 calls to a State Farm Insurance agent in Cottage Grove, Minnesota, who then sold at least 20 new policies. State officials are encouraging consumers to use the Department's Look-Up Tool to ensure that the calling party is licensed to sell insurance in Minnesota.

Edited by Maurice Nagle

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