Do Not Call Compliance: Don't take it for granted

There are lots of good reasons for businesses to comply with the National Do Not Call Registry:  It ensures your marketing message will be heard by a more receptive audience and it protects your company from the ire of consumers who don’t want to be disturbed.  But in a case involving calls pitching "free" government grants, a federal judge in Rochester, New York, just added 30 million more reasons not to call people on the list.

According to the FTC, defendants Paul Navestad and Chintana Maspakorn — operating primarily as the "Cash Grant Institute" — made millions of robocalls, including more than 2.7 million to people on the Do Not Call Registry.  They falsely claimed that cash grants from government agencies, private foundations, and “wealthy individuals” were there for the taking, that consumers had already qualified for them, and that people could get up to $25,000 to pay their bills.

The robocalls sent people to the defendants’ website, which also made bogus promises about “Free Grant Money.”  The defendants ran a related site that featured pictures of the U.S. Capitol and President Obama and the statement “Did you know that grant money exists for almost any purpose and does not need to be repaid?”

In a written opinion, the judge granted the FTC’s motion for summary judgment and ordered a total of $30 million in civil penalties and disgorgement for violations of the FTC Act and the Telemarketing Sales Rule.  The court specifically held the defendants had violated the TSR by “making calls to consumers who were registered on the ‘do not call’ list; failing to pay the fee required to access the ‘do not call’ registry; failing to provide an opt-out mechanism for consumers; failing to connect consumers to a live operator within two seconds of a request to do so; and making false statements to consumers in an effort to induce them to pay for services that would allegedly enable them to easily and quickly receive public or private grants.”  The judge cited the FTC’s “copious amounts of evidence" — bank records, contracts, witness statements, and the like — “supporting each and every element” of its case.

In addition to the record-setting civil penalty, the order bans the defendants for life from marketing grants, grant-procurement goods or services, and credit-related products; from misrepresenting any good or service; and from violating the TSR.  To protect people’s privacy, the court barred the defendants from selling or otherwise benefiting from customers’ personal information and requires them to dispose of it securely within 30 days.