FTC Settles with Company that Used Sweepstakes to Get Around Do-Not-Call Rules

Posted on April 21, 2011 by Gonzalo E. Mon

This afternoon, the FTC announced that the manufacturer of Rascal Scooters has agreed to pay $100,000 to settle charges that it illegally called millions of consumers whose phone numbers were on the national Do Not Call Registry.

The company asked consumers to provide their numbers on sweepstakes entry forms so that the company could contact them if they won. According to the FTC, however, the company also contacted non-winners with sales calls. Although the Telemarketing Sales Rule generally allows a company to call a consumer on the Do Not Call Registry for up to 18 months if it has an “established business relationship” with the consumer, the FTC has warned that companies may not rely on a sweepstakes entry form as the basis for that exception.

This case serves as a reminder that companies cannot misrepresent the reason for collecting phone numbers or assume that just because a consumer gives the company a phone number, the company can place a sales call to the consumer.  

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FCC Says Calls to Current Customers are not "Telephone Solicitations" under the TCPA

Posted on April 19, 2010 by Gonzalo E. Mon

In the past month, we've posted two entries (here and here) regarding court decisions interpreting the Telephone Consumer Protection Act (the "TCPA") in the context of mobile marketing campaigns. This morning, our colleagues at the Telecom Law Monitor posted an entry about an FCC decision interpreting the TCPA in the context of a telemarketing case. In that case, a consumer had argued that companies made unsolicited calls to him in violation of the TCPA. The FCC's decision turned on whether the calls were "telephone solicitations" under the TCPA. The FCC held that unsolicited calls to a consumer were not TCPA violations because the messages were intended for current customers, not as solicitations to obtain new customers. Moreover, the telemarketer’s mistake in directing the calls to a non-customer did not make the calls actionable. This decision will make it harder for a consumer to prove a violation when communications are intended for current customers. A more detailed analysis of the decision is available here.

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