FTC Stops Robocalling Operation

The Federal Trade Commission recently filed a complaint and obtained a temporary restraining order issued against a telemarketing operation that allegedly made millions of illegal phone calls pitching extended auto warranties and credit card interest rate-reduction programs.

The Complaint alleges that, SBN Peripherals, Inc., made more than 370 million calls to consumers nationwide in the past year alone, prompting tens of thousands of complaints to the FTC. The FTC charges the robocalls violated the agency's Do Not Call Registry Rule.

The FTC alleged that the defendant's robocalls often transmitted caller ID information vaguely identifying the caller and displaying telephone numbers registered to an offshore company it controlled. The FTC further alleges that a foreign shell company for SBN called Asia Pacific made many of the calls and lists its addresses in overseas locations.

The complaint states that the recordings used by the defendants falsely claimed that the caller had urgent information about the consumer's auto warranty or credit card interest rate. Consumers who pressed "1" for more information were transferred to live telemarketers at a variety of different locations, who used fraudulent practices to sell inferior extended auto service contracts or worthless debt-reduction services.

The FTC's complaint alleges that defendants violated the FTC's telemarketing rules by: 1) Using robocalls to contact consumers. Under the FTC's Telemarketing Sales Rule, since September 1, 2009, nearly all such pre-recorded calls have been illegal, unless the seller first obtains the consumer's written permission; 2) Calling consumers whose telephone numbers are on the National Do Not Call Registry; 3) Abandoning pre-recorded calls (not connecting to a live person when a consumer answers) at a higher rate than permitted under law (three percent of all calls made); and 4) Repeatedly calling consumers who asked to be put on their company-specific do-not-call list.

IMPORTANT TIP: If you are a telemarketer or going to start a telemarketing campaign it is imperative you understand the laws and regulations that regulate telemarketing. The FTC continues to enforce the requirements of the Telemarketing Sales Rule. To learn more about our Telemarketing Law practice, click here.

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