The Federal Trade Commission yesterday announced it had reached a settlement and a judgment barring two former telemarketers from future telemarketing activities after the two deceptively charged consumers to register on the national do-not-call list.
The list, run by the FTC, is free to all consumers who want to register their telephone numbers to stop unsolicited phone calls. Consumers could first register their phone numbers on the national registry list in June 2003, and telemarketers were required to cease calling any numbers on the list in October 2003 -- or risk an $11,000 fine per call.
The telemarketers in the settlement began calling consumers as early as November 2001, promoting a fee-based service -- ranging from $29.95 to as much as $99.95 -- to stop unwanted telephone solicitations, according to the FTC complaint. More than 12,000 consumers were charged, it said.
In many cases, the telemarketers billed consumers' credit cards or debited their bank accounts for the service -- even though the consumers never agreed to buy it, the FTC said. At times, the telemarketers did not even contact the consumers before billing them, the agency added. Consumers noticed the charges only when they appeared on their credit card or bank account statements.
The telemarketing firm, Telephone Protection Agency, and its president, Rebecca Phillips, settled with the FTC previously. Yesterday's settlement involved the company's vice president, Robert Thompson, and its controller and secretary, Alex McKaughn. Neither admitted any wrongdoing.
Because Thompson failed to defend against the charges, the U.S. District Court for the Western District of North Carolina issued a default judgment against him, requiring him to pay $673,000. Based on McKaughn's financial documents, the FTC said it believed he was unable to pay the $673,000 in the amount of consumer harm caused by these deceptive practices. Harold Bender, McKaughn's attorney, said his client settled to put the matter behind him.