A Federal Trade Commission ("FTC") report recently
submitted to Congress on the use of the Do Not Call Registry (the
"Registry") by businesses and consumers highlights the
dangers in misuse of telemarketing leads. According to the
FTC, "marketers claiming a business relationship have
improperly placed telemarketing calls to consumers after acquiring
the consumers' telephone numbers from others." Only
in certain circumstances would calls by third-party marketers be
permitted to telephone numbers on the Registry after acquiring the
number from a lead generator.
Under the FTC's Telemarketing Sales Rule ("TSR")
National Do Not Call provisions, a company may call a consumer with
whom it has an "established business relationship" even
if the consumer's number is on the Registry. However,
according to the FTC, "telephone calls from telemarketers to
phone numbers provided by lead generators generally do not fall
within the established business relationship exception because,
while the consumers may have a relationship with the lead
generator, they do not have an established business relationship
with the seller who has purchased the leads."
Except in limited circumstances, the FTC's rules generally do
not allow a seller to claim that it has a relationship with the
consumer such that it can ignore the consumer's request to not
receive telemarketing calls. The FTC report put a spotlight
on several enforcement actions that resulted in businesses that
made telephone calls to consumers on the Registry after acquiring
the consumers' names from a lead generator being forced to pay
civil penalties to settle charges that their calls violated the
TSR.
For example, the FTC reported that in one case a lead generator
collected information on consumer interests through web
advertising, by offering coupons or samples, or simply by 'cold
calling' consumers in order to determine whether the consumer
has any interest in a particular product or service, such as debt
relief or home alarms." According to the FTC, the
"[l]ead generators responsible for these so called 'call
verified leads' often fail to remove numbers listed on the
Registry before calling consumers."
The FTC report also details how "some telemarketers and
sellers have acquired leads from lead generators and used them in
telemarketing campaigns without screening the numbers called to
remove numbers listed on the Registry. In this way, a single
sales pitch can produce multiple illegal calls, generating one or
more calls from both the lead generators and the
telemarketer."
The FTC's enforcement actions and investigations into the
activities of telemarketers and their vendors, including lead
generators, highlights the ongoing focus by the FTC into the
practices of anyone that sells or buys leads.
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