FTC Announces Do Not Call List Crackdown

WASHINGTON, D.C. (AP) — Federal regulators on November 7 announced nearly $7.7 million in settlements with six companies — including Craftmatic Industries and ADT Security Services — accused of calling people on the national Do Not Call list.

The Federal Trade Commission said Craftmatic Industries Inc, maker of adjustable beds, would pay the biggest fine, $4.4 million in civil penalties. ADT agreed to a $2 million settlement, the FTC said.

The four other companies were: Ameriquest Mortgage Company, Alarm King, Direct Security Services, and Guardian Communications.

“By bringing enforcement actions, like those announced today, we will ensure that the small number of bad actors pay a price for not adhering to the law and respecting consumers’ privacy requests,” said FTC chairwoman Deborah Platt Majoras.

Craftmatic and three of its subsidiaries were accused by the FTC of running a sweepstakes for a Craftmatic bed and using the phone number that consumers provided on the entry form to later make sales calls to entrants even though their numbers were on the Do Not Call list.

Ms Majoras said the company was not upfront with people that they would be getting sales calls.

“You’re really trying to fool consumers into giving up their phone number so you can turn around and call them,” the chairwoman told reporters.

ADT and two of its dealers, Alarm King and Direct Security Services, were accused of directly marketing security systems to consumers who had placed their numbers on the list.

Ameriquest, the FTC said, got phone numbers of people on the registry from so-called lead generators — companies that get contact numbers from people by using websites that promise information on financial and other products. Ameriquest then used the phone numbers from the lead generators to improperly call people on the Do Not Call registry, the agency said. The FTC said Ameriquest would pay $1 million in civil penalties.

The last settlement involved Guardian Communications of Moline, Ill., which the FTC accused of “blasting” millions of calls to phone numbers on the registry with prerecorded telemarketing pitches. Guardian will pay $150,000 to settle the charges, the commission said.

Ms Majoras also said the Justice Department, acting on the FTC’s behalf, will allege in a federal court complaint that California-based Global Mortgage Funding made hundreds of thousands of calls to consumers on the Do Not Call registry.

The registry prohibits telemarketers from calling phone numbers on the list. Companies face fines of up to $11,000 for each violation.

Organizations engaged in charitable, political, or survey work are exempt. Companies that have an established business relationship with a customer also may call for up to 18 months after the last purchase, payment, or delivery.

The latest enforcement actions bring to 34 the number of Do Not Call cases the government has filed against companies since the registry began in June 2003. The biggest case to date involved satellite television provider DirecTV Inc, which paid a $5.3 million settlement.

At the news conference, Ms Majoras reiterated that the agency no longer plans to automatically purge phone numbers on the registry that begin expiring next summer. Each number on the registry was good for five years and then would have to be reregistered by the consumer.

The agency decided to reverse course, however, last month as Congress considers legislation that would make the phone numbers on the Do Not Call list permanent.