A call center and three (3) individuals associated with a telemarketing effort on behalf of Grand Bahama Cruise Line LLC ("GBCL") recently settled alleged violations of the Telemarketing Sales Rule ("TSR") with the Federal Trade Commission ("FTC"). The FTC intends to litigate this matter against the remaining seven (7) defendants in federal court, including GBCL. The FTC's complaint alleges that GBCL and the other defendants committed TSR violations by placing millions of telemarketing calls offering free cruises to telephone numbers listed on the National Do Not Call Registry ("DNC Registry").
What are the Alleged TSR Violations?
TSR Violations and the DNC Registry
Originally adopted by the FTC in 1995, the TSR was intended to curtail "abusive and deceptive telemarketing acts or practices." In 2003, the FTC amended the TSR to establish the DNC Registry – a list of telephone numbers of consumers who do not wish to receive telemarketing calls. Consumers can add their telephone numbers to the DNC Registry by:
- Calling a toll-free telephone number (1-888-382-1222); or
- Visiting donotcall.gov.
Telemarketers are prohibited from calling consumers whose names appear on the DNC Registry. To avoid contacting consumers on the DNC Registry in violation of the TSR, telemarketers and other permitted organizations can gain access to the DNC Registry at telemarketing.donotcall.gov.
GBCL's Alleged TSR Violations
The FTC's complaint alleges that GBCL violated the TSR by "delivering a prerecorded message . . . to numbers listed on the DNC Registry . . . to consumers who had previously stated that they did not wish to receive outbound telephone calls by or on behalf of the seller whose goods or services are being offered . . . ." More specifically, the complaint alleges that GBCL either: (1) caused lead generators and call centers to contact millions of consumers on the DNC Registry to offer them a survey regarding a possible free cruise; or (2) failed to ensure that their lead generators "scrub[bed] their sales leads to remove telephone numbers listed on the DNC Registry."
Protect Your Business from TSR Violations
GBCL is alleged to have violated the TSR by calling millions of consumers on the DNC Registry through a third-party telemarketing call center. While litigation of this matter has not begun, if GBCL is found to have violated the TSR hundreds of thousands – or even millions – of times, this could result in enormous damages against the remaining defendants. To prevent such TSR violation allegations, businesses need to ensure that they, and any telemarketers that they work with, have scrubbed their lists of consumers against the DNC registry or have otherwise obtained consent to call. Violations of the TSR are avoidable with appropriate preparation.
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