"Do Not Call" Violators Fined $1.2M 185
coondoggie writes "A federal court today spanked two telemarketers with some $1.2 million in civil penalties for violating the Federal Trade Commission's Do Not Call Rule. According to the FTC, the companies called consumers whose phone numbers were on the Do Not Call Registry without having obtained their express written agreement or having an 'established business relationship' with them. One group's telemarketers also allegedly abandoned many calls, by failing to connect the calls to a sales representative within two seconds after consumers answered, as required by law, the FTC stated. The cases were filed by the Department of Justice on behalf of the FTC."
cost of doing business... (Score:5, Insightful)
...don't think the telemarketers didn't factor fines like this in the price they charged clients.
This is $300 [realtytimes.com] billion/year industry.
Thats good to hear. (Score:3, Insightful)
Many judges are not sympathetic towards people who report the "Do Not Call" violators. They see the people who do report them as whiny people who are abusing the judicial system for money.
Telemarketing, Spamming, and even Billboards, are what I call bad advertising. They advertise without giving any advantage to the community or benefit to the end user, or costs them in some ways.
Advertising that helps offer free services, or reduced cost services are good advertising, wither or not this happens is at the ethics of the person giving the service, but not the advertiser.
Spanking's too good (Score:5, Insightful)
If anyone deserves a repeat spanking it's these people. I have to deal with enough marketing crap coming via my inbox & letterbox without having people call my phone all the time too. It's especially galling when people have explicitly indicated that they don't want to be called in the first place, as they have here.
I wish the whole concept of telemarketing would just die a horrible death. Who really wants to deal with persistent salespeople when they're trying to chill out at home and enjoy the precious little time that isn't spent staring at their work PC?
More spanking please.
enlightening (Score:3, Insightful)
>>> failing to connect the calls to a sales representative within two seconds after consumers answered, as required by law,
This happens to me a LOT, but I didn't realize it was required by law to answer. That's good. There's nothing more annoying than running to get the phone, and only hearing a bunch of clicks and nobody answering. Stupid corporations should be forced out of business, not just fined. With workers being fired left-and-right, maybe a few of these law-breaking corporations should be "fired" too.
Re:Thats good to hear. (Score:1, Insightful)
Re:cost of doing business... (Score:5, Insightful)
Re:cost of doing business... (Score:1, Insightful)
Yup, this fine is just a speed bump. The fact that the Do Not Call registry made the law abiding companies change their business tactics or drop out of the race gives these companies that would rather take the hit less compitition. Less compitition = more money for them.
Of course I don't have numbers to back this up...I'm not sure that numbers exist for such things...but I'd wager to say that the major offending companies are probably making more now, even taking into account the spanking they're getting by the FCC, than they were before.
Here's something else to think about. Provided these are American owned companies, employing Americans, would it be better to just look the other way unless we're out of financial dire straights? As shady as telemarketing is, it's supporting and employing thousands of Americans every year. Granted, I've been telemarketed by my fair share from across the globe, but as far as domestic telemarking goes, it's not THE worst thing that could be going on with the strength of the dollar and the unemployment rate like it is.
Re:cost of doing business... (Score:5, Insightful)
Besides - there needs to be reasonable penalties. Just because a company has 100 million in assests/revenue does not mean they need to be fined 100 million for any infraction of any law. That would be prejudicial and wrong. It would be along the lines of how drug laws are racist (cheaper drugs, which tend to be used mroe by low socio-economic people aka minorities, get stiffer penalties then those who use more expensive drugs.)
So 1.2 million for calling is pretty fair. If they don't stop doing it the next judge can make it 10 million (cumulative penalties), and the judge after that can make it 50, and so forth until they get the message.
In the top portion of your message you said this was a "speed bump" but in the bottom portion you said we should look the other way because of our economy. These two statements clash. If it is a slap on the wrist the only people to be fired are those responsible for the screw-up...usually a few management. It won't cause massive lay-offs. Also - no we should not look the other way. We should not allow people to break the law because the economy sucks right now. Plenty of people work and make a profit without breaking the law.
Re:cost of doing business... (Score:3, Insightful)
p.s. The FTC also needs the right to decide revenue on their own, bypass any tricks by the company's accounting department.
And also include the revenues of associated companies.
And levy fines against "holding companies" or other related companies artificially constructed to try to insulate profits or related orgs from liability arising from illegal business practices.
Re:cost of doing business... (Score:3, Insightful)
If you accept the premise that most telemarketing, especially most shady telemarketing, is for rip-offs and other kinds of crap, then "looking the other way" as you suggest, is just a variation on the broken-window fallacy.
Re:cost of doing business... (Score:3, Insightful)
Yup, this fine is just a speed bump. The fact that the Do Not Call registry made the law abiding companies change their business tactics or drop out of the race gives these companies that would rather take the hit less compitition.
Which is useful information in itself. I'm on the UK DNC list, and if I get a call it means that the company calling me is either incompetent or is employing shady, if not crooked, business practices. I always ask them which it is, and they tend to find it hard to return to script.
Here's something else to think about. Provided these are American owned companies, employing Americans, would it be better to just look the other way unless we're out of financial dire straights? As shady as telemarketing is, it's supporting and employing thousands of Americans every year.
Hey, so does organised crime, maybe you want to cut that some slack, too? Anyway, most marketing calls I get here in the UK seem to originate outside the UK (judging by the accents, which I realise isn't 100% reliable) because that avoids the UK law so there is no redress. Don't be surprised if the calls you get are from outside the USA, for just the same reason.
Re:cost of doing business... (Score:5, Insightful)
Granted, I've been telemarketed by my fair share from across the globe, but as far as domestic telemarking goes, it's not THE worst thing that could be going on with the strength of the dollar and the unemployment rate like it is.
I really hope that's not what got you modded up.
When the harm you cause others is greater than the benefit you create for yourself, that is textbook economic inefficiency. It should be illegal. That's why we have laws against pollution. That's why we have laws against speeding. That's why we have countless laws against many things that a selfish individual would want to do, but which would harm others.
Yes, telemarketing falls in that class: a failed marketing call has inconvenienced the person who answered the phone. The marketer does not bear this cost.
And the state of the economy does not mean we should throw this principle out the window.
Here's the challenge and the problem (Score:5, Insightful)
Most of the "really guilty" companies use VOIP with callerid spoofing. It's illegal but almost impossible to prove on a sweeping scan of the industry. You have to watch one company to catch them doing it and most of these guys switch their names, change location etc... and often times aren't even in the United States and thus, not under their jurisdiction.
- I don't want the Government to be able to wiretap companies without a warrant.
- I don't want the telephone companies / ISP's filtering content.
- We can't punish the companies who use them because it could easily be used as a bankrupting tool for innocent companies (company A wants to bankrupt company b and "hires" telemarketing company as company A).
- I refuse to pay my telephone company or the government more money for something that should be happening in the first place
So how do we stop these guys especially when we can't prosecute them under our laws?
Solutions
1) Filters - You can have automatic private/unknown block. I know two people who have private numbers who would have trouble calling me. This is flawed because you block people you want to talk to and callerID spoofing bypasses the rest. If it comes to traffic identification that means ISPS are scanning traffic... uh NO. No matter what you basically you hurt yourself here.
2) Fines - won't work on the really bad ones outside the US. A pointless endeavor except to inside the US.
Sure the above two work to deter it within our Country... however I think jail-time of the company owners should be mandatory. That would pretty much stop it within the US. However... it's pretty minor here. Most calls you get are from out of country.
Here is my solution... but its easier said than done due to difficulty of implementation. The requirements are the follows
1) Create a complaint system where users can do *123 (or something) that identifies that call as an unwanted sales call.
2) Users who have access to this feature must be on the DO NOT CALL LIST
3) This system must be profitable for all those involved or negligible in cost or it's a pipe dream.
4) There has to be a bit of leeway because lists are purchased and occasionally even the best companies screw up.
When a caller identifies a call by hitting *123 it flags that call for the telephony company. It stores the data of that caller in a database. This database is given to a US agency who runs reports identifying repeat offenders or "areas" of the world where it comes from the most (including the US).
This helps the US target those areas and identify the companies that relay those calls, or that companies VOIP id's etc. From this information we can block them entirely. Like all blacklists there has to be a measure of care taken before someone is placed on it.
Good exploiters of the system are constantly moving, constantly changing to not be identified. Here's what the cherry in my plan comes from. When telemarketers like this are identified, it's almost a shoe in to identify the companies that do business with them. Begin to fine those companies. WHY?!?
When companies begin to get hit with fines, and the threat of being identified as "bad marketers" receiving bad media... you bet your ass they'll start looking for more reputable marketing groups. You'll see a SHARP decline in the number of unwanted calls that occur.
Unfortunately this is a long term solution and would take over a year to begin culling the data and identifying trends. Except one thing...
AT&T, Sprint and several others have been doing this for years. They have the data, they know who it is... all they need is little push from a Governmental agency dedicated to spam! The fines and such would self manage this agency. When fines are high this agencies focus is here... when it's low this agency can focus on other issues.
The best part is that when this problem becomes small... so will the governmental agency.
My perfect world i guess...
Re:Just use spam filters (Score:3, Insightful)
I do that on my home phone line (actually even simpler than that -- "Press 1 to continue in English"), and it works quite well.
Re:cost of doing business... (Score:5, Insightful)
As shady as telemarketing is, it's supporting and employing thousands of Americans every year.
I call strawman on that.
With the same argument, you'd have to make drugs legal, all of them. Or child porn. Or concentration camps. They all do or could do the same - employ people.
The fact is: The "it offers jobs" argument is entirely hollow. If we made computers illegal today, sure there would be a couple million unemployed people tomorrow. They'd have different jobs by next week, when we find out that we still need work to be done, and people to do it.
The "jobs" argument is a pseudo-argument that pretends to look at things from a higher perspective. What it really does, however, is cover up the proper higher perspective, which is: What is the value for the local/national/global economy?
Telemarketing sells stuff. It does not create any additional value. It does have a negative economic impact through the damage it does to people who don't want to be called (time is an economic commodity, even if it's nominally spare time). I've not run the numbers, but I dare to say it at least equals out, given how many people's evening the telemarketers have to ruin in order to make one sale.
On the whole, telemarketing almost certainly provides a negative contribution to the local/national/global economy. Just like drugs or concentration camps, so it needs to go the same way - outlawed.
Footnotes:
a) I'm aware "drugs" is a very high summary here and not all drugs fit equally
b) I've not made nor do I intend to make an economic "analysis", however rough, on the topic of child porn, that's why it's missing in the second enumeration
Re:cost of doing business... (Score:5, Insightful)
The fine for serious violations should be the greater of 20% of annual revenue for each year the violations occurred or 150% of the revenue that came from the violations.
For added fun, charge the phone equipment with assisting in the violation of the do-not-call list and take it in a forfeiture. Yes, even if it's rented.
Penalties that don't even add up to the value of the crime are better defined as taxes. Imagine if stealing a new car off the lot was a $1000 fine (and you get to keep the car). Suddenly stealing a new car would be the new national sport.
If civil fines for individuals were scaled to the corporate fines, a speeding ticket would cost $2 or so and wouldn't affect your insurance rate. No need to waste time paying in cash at the courthouse, just mail a check.