Markets Wired

Satellite television provider DIRECTV, and Comcast Corp., one of the nation’s largest providers of cable and Internet services, have agreed to pay a total of $3.21 million to settle separate Federal Trade Commission charges that they violated the Do Not Call provisions of the Telemarketing Sales Rule (TSR), including charges that they or their telemarketers called consumers who specifically had told the companies not to call them again. In addition, a DIRECTV telemarketer and its principals have agreed to pay a $115,000 penalty for making prerecorded sales calls to consumers who had asked not to be called.

Under the proposed settlements announced today, DIRECTV has agreed to pay $2.31 million to settle the FTC’s charges that it violated the TSR’s Do Not Call provisions and, as a result, violated a 2005 court order barring it from such conduct. Comcast has agreed to pay $900,000 to settle the FTC’s claims that it violated the entity-specific Do Not Call provisions of the TSR. All the defendants also would be prohibited from future violations of the TSR and the Do Not Call Rule. The U.S. Department of Justice (DOJ) filed the actions on behalf of the FTC.

“In both of these cases, DIRECTV and Comcast violated consumers’ privacy by calling people who specifically had asked these companies not to call them again,” said FTC Chairman Jon Leibowitz. “What makes DIRECTV’s actions especially troubling is that it is a two-time offender: DIRECTV violated not only the FTC’s Do Not Call Rules, but also a previous federal court order barring it from exactly this type of conduct. Simply put, we won’t tolerate firms that disregard consumers’ specific requests not to be called, and we will be especially tough on companies that ignore their obligations under prior court orders.”

Combined with the $5.3 million DIRECTV paid under the earlier 2005 Do Not Call order, the company has now agreed to pay a total of more than $7.6 million for Do Not Call violations. A DIRECTV telemarketer and its principals also are settling related charges.

They would be required to pay a $115,000 penalty for calling consumers who had asked not to be called, and for “abandoning” calls – delivering a prerecorded message when consumers answered, rather than connecting them to a live sales representative.

The Commission’s complaint against Comcast is the first to have as its sole allegation that a company called consumers who had specifically asked it not to call them – the so-called “entity-specific” Do Not Call provision of the TSR.

In another recent Do Not Call enforcement action, last month the Commission announced a complaint against Dish Network (formerly known as Echostar) and two of its telemarketers alleging that they violated the Do Not Call Rule by calling consumers whose phone numbers are on the National Do Not Call Registry. Those cases are currently pending in court.

DIRECTV. According to the FTC, DIRECTV violated the TSR and a 2005 federal court order by causing one of its telemarketers, Voicecast Systems, which operated under the name InTouch Solutions (InTouch), and its two principals to make more than a million calls delivering prerecorded messages to consumers in August and September 2007. InTouch’s telemarketing campaign was designed to contact consumers who had previously asked DIRECTV not to call them again – that is, asked DIRECTV to place them on the company’s internal Do Not Call list. The illegal calls consisted entirely of prerecorded messages in which consumers were told that “from time to time [DIRECTV] extend[s] exciting offers to our loyal customers like you, but because you are on the DIRECTV Do Not Call List, we are not able to contact you for these exciting offers.” The message then told call recipients to “press one” to remove their numbers from the company’s Do Not Call list.

Based on these calls, the Commission charged DIRECTV and InTouch with violating two provisions of the TSR by placing prerecorded calls to consumers who had previously said they did not want the company calling them. The calls allegedly violated the TSR’s provisions against calling consumers on DIRECTV’s internal Do Not Call list and against making calls that do not connect to a live person. To settle these charges, the parties have agreed to stipulated court orders that would permanently bar DIRECTV, InTouch, and InTouch’s principals from violating the TSR in the future, and impose extended monitoring provisions on DIRECTV based on its violation of the 2005 court order. The stipulated orders would also impose a $2.31 million civil penalty against DIRECTV and a $115,000 penalty against InTouch and its principals.

Comcast. The FTC alleges that Comcast caused its in-house call centers, as well as outside telemarketing contractors, to make telemarketing calls to sell Comcast’s cable television, Internet, and Voice over Internet Protocol (VoIP) telephone services. Comcast does have written policies and procedures for compliance by its internal call centers and third-party telemarketers with the TSR, including the Rule’s entity-specific Do Not Call provisions. Despite these policies and procedures, the FTC contends that some of Comcast’s internal call centers and third-party telemarketing vendors together made more than 900,000 calls to consumers after those consumers specifically asked that the company stop calling them.

The Commission alleged that Comcast failed to implement a TSR-compliant Do Not Call program that would have identified problems at internal call centers and third-party telemarketing vendors and promptly corrected them. The FTC did not charge Comcast with calling consumers whose numbers are on the National Do Not Call Registry, but found its entity-specific Do Not Call violations serious and pervasive enough to warrant a complaint.

The proposed stipulated court order settling the Commission’s charges against Comcast would bar the company from violating the TSR in the future, including its entity-specific Do Not Call provisions, and imposes a civil penalty of $900,000. The proposed order also contains standard record-keeping and monitoring provisions to ensure Comcast’s compliance with its terms.

The FTC reminds businesses that compliance with the National Do Not Call Registry alone is not enough – they also need to make sure that they honor consumers’ company-specific Do Not Call requests.

The Commission vote approving each complaint and stipulated court order was 4-0. DOJ filed the complaints on the FTC’s behalf on April 15, 2009. DOJ will file the stipulated orders with DIRECTV, Inc., Voicecast Systems, Inc., also doing business as InTouch Solutions, and its principals Michael Kurtz and Keyvan Saedi in the U.S. District Court for the Central District of California, Western Division. The complaint and proposed order with Comcast Corporation have been submitted to the U.S. District Court for the Eastern District of Pennsylvania.

NOTE: The Commission authorizes the filing of complaints when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaints are not a finding or ruling that the defendants actually have violated the law.

NOTE: Stipulated court orders are for settlement purposes only and do not necessarily constitute an admission by the defendants of a law violation. Stipulated orders have the force of law when signed by the judge.

Copies of the complaints and proposed court orders are available from the FTC’s web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

(FTC File Nos. 092-3098 – DirecTV and 062-3166 – Comcast; Civ. Nos. CV09-2605 and 2:09-cv-1589)