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Business Sues Telemarketer In Wake Of Costly Class Action

Telemarketer’s Do Not Call Violations Cost Business $6 Million

In AEP Energy, Inc. v. Infinity Marketing Group (filed in the Northern District of Illinois on June 19, 2015), a business sued its telemarketer, claiming the telemarketer acted illegally while soliciting new customers for the business. The telemarketing company and its owner now face potential liability in excess of $6 million.

Plaintiff AEP is a company that supplies electricity to both residences and businesses. When AEP hired Infinity to acquire leads for new customers, the parties signed a contract in which Infinity agreed to comply with all applicable telemarketing laws and regulations, including the Do Not Call Law.  Infinity began its telemarketing campaign on behalf of AEP in 2012, but in April 2014, AEP was hit with a class-action lawsuit over calls to residential phone numbers that were registered on the federal Do Not Call list.  Note that AEP did not make the calls itself. Infinity made the illegal calls, but the services being marketed were AEP’s, so AEP was sued under the vicarious liability provisions of the Telephone Consumer Protection Act, which provide for liability for calls made “on behalf of” others.

 At some point in the class-action lawsuit, Infinity admitted to AEP that it never scrubbed its calling lists against the federal Do Not Call list. Facing potential liability of nearly $50 million, AEP settled the class action for $6 million.

Claiming breach of contract, AEP has now sued Infinity. AEP has also sued Infinity’s owner, claiming he committed fraud by representing his company’s practice was to comply with Do Not Call requirements.  The lawsuit seeks to recover the $6 million settlement payment plus all attorneys’ fees and other costs associated with the class-action lawsuit. Additional claims were made against Infinity for allegedly soliciting AEP’s clients on behalf of a competing electricity company. Olshan will continue to follow this lawsuit.

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