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The FTC Levies a $3.4 Million Fine on Telemarketing Firm

May 30, 2014

The U.S. Federal Trade Commission (FTC) works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. They are the enforcement agency of the many of the laws that are in place to protect Americans from being harassed by telemarketers and others.


One of the rules the FTC enforces is by going after organizations that don't follow the wishes of consumers that have placed their number on the National Do Not Call (DNC) Registry, and according to a recent settlement, Versatile Marketing Solutions (VMS), was one such organization.

The FTC along with the U.S. Department of Justice settled with VMS after they received complaints the company called millions of consumers on the FTC’s DNC Registry. According to the FTC the calls were made under the guidance of Jasjit Gotra, the owner of the company.

The company bought the names and numbers of the people they called from lead generators. Although the lead generators claimed consumers had given permission to be contacted, the FTC said it was false.

The FTC went after the company alleging it violated the Commission’s Telemarketing Sales Rule. The tactics it used for obtaining sales leads were illegal, which included using robocalls from “Tom with Home Protection,” fake survey calls, and calls to phone numbers on the National Do Not Call Registry.

The company made more than two million calls between November 2011 and July 2012, and one million of those numbers were on the DNC Registry, while 100,000 were consumers who demanded the company stop calling, which is another violation of the DNC rules. The company also called consumers without first checking to see if their phone numbers were registered on the DNC Registry. All of these violation cost the company a $3.4 million penalty judgment, with all but $320,700 suspended because they weren't able to pay it.

"Companies that use lead generators must exercise due diligence when they buy lists of phone numbers or else they can be on the hook for illegal telemarketing. Relying on a say-so that the numbers were obtained legally, or that the consumers have agreed to be called, even if their numbers are on the Do Not Call Registry, isn’t enough," said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. 




Edited by Peter Bernstein

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