posted on 2015-08-20 by By Justin Brandt, Alan D. Wingfield and Chad Fuller
On August 11, the Federal Communications Commission handed down a $2.96 million fine
against Travel Club Marketing Inc., related entities, and owner Olen
Miller (collectively “Travel Club”), the largest fine in FCC history
related to autodialed calls. The fine stems from allegations that the
companies violated the Telephone Consumer Protection Act in their
telemarketing efforts, including sales of vacations and timeshares.
Travel Club was accused of making at least 185 “prerecorded advertising
calls” to more than 142 cellular and residential telephone numbers,
many of which were listed on the National Do Not Call Registry.
The fine culminates a formal regulatory process that began on October
31, 2011, when the FCC issued a Notice of Apparent Liability (NAL) to
Travel Club proposing the $2.96 million forfeiture for “willful and
repeated violation” of the TCPA. When Travel Club finally responded,
the FCC noted the failure “to provide any information or make any
arguments whatsoever to challenge the NAL’s findings” and that Travel
Club “continued to make unlawful robocalls during the time that the NAL
underlying this Forfeiture Order has been pending, the fact of which
militates against a cancellation or reduction of the proposed forfeiture
penalty.”
Under FCC rules applicable when the calls were made, such
telemarketing calls were allowed only with “either prior express consent
or an established business relationship” with call recipients, which
Travel Club did not possess. The FCC has since further tightened these
restrictions, ending the “established business relationship” exemption in 2012.
The previous record fine was $2.9 million, ordered by the FCC in May
2014, in relation to autodialed calls made during the 2012 United States
presidential campaign.
Although the fine represents a new high for an administrative
enforcement action by the FCC, an ongoing enforcement action by the FTC
and several states against Dish Network under the TCPA, the FTC’s
Telemarketing Sales Rule, and parallel state laws is seeking,
theoretically at least, billions of dollars in penalties arising out of
allegedly illegal telemarketing calls. Our take on the Dish Network
action can be found here.
Troutman Sanders LLP has unique industry-leading expertise with the
TCPA, with experience gained trying TCPA cases to verdict and advising
Fortune 50 companies regarding compliance strategy. We will continue to
monitor regulatory and judicial interpretation of the TCPA in order to
identify and advise on potential risks.
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posted on 2015-08-20 by By Ethan G. Ostroff, David N. Anthony and Keith J. Barnett
The Consumer Financial Protection Bureau sent a questionnaire
with almost 60 questions to randomly selected debt collectors and
service providers as part of its potential rulemaking regarding debt
collection, a process that began almost two years ago.
The CFPB received 23,000 comments in response to its Advance Notice of Proposed Rulemaking
(ANPR) for debt collectors, which included 162 questions. According to
the CFPB, this new “survey is being conducted in order to build the
[CFPB’s] knowledge of the operational costs of collecting debt that is
in default” and the answers provided to the questions are intended to
“help the CFPB better understand the burden of potential regulations
affecting the debt collection industry.”
This questionnaire was sent with a cover letter
from John McNamara, the Debt Collections Program Manager in the CFPB’s
Division of Research Markets & Regulations. In it, the CFPB
explains it “will be gathering information from a variety of debt
collection firms, creditors, and service providers” that will “inform
the Bureaus’ analysis of the benefits and costs of potential new rules
relative to debt collection.”
The questionnaire asks about basic activities and operational costs
of collecting debt, including, for example, questions about vendors used
for activities such as dialers or print mailings, maintaining data
about consumer accounts, and furnishing information to credit bureaus.
The CFPB also stated that it plans to conduct “follow-up phone
interviews” with some of the companies that respond to the survey “to
help us understand their operations in more detail.”
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