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On September 30, the FTC and the DOJ announced a settlement resolving allegations that a Massachusetts-based disability-advocacy company and its subsidiary violated the Telemarketing Sales Rule and FTC Act. The FTC alleged that the companies unlawfully contacted consumers through robocalls and calls to numbers on the National Do Not Call Registry to market Social Security Disability Insurance benefits.
According to the complaint, the companies used third-party lead generators to collect consumer information through deceptive websites and then placed automated and misleading calls to consumers nationwide. The settlement requires the companies to implement strict vendor oversight and compliance measures to prevent future violations.
The complaint alleges that the companies:
- Called numbers on the Do Not Call Registry. The companies allegedly made more than 25.7 million outbound telemarketing calls to consumers on the National Do Not Call Registry without prior express consent.
- Used illegal prerecorded messages. The defendants allegedly placed millions of robocalls through third-party vendors and call centers without obtaining the written authorization required under the Telemarketing Sales Rule.
- Misled consumers about the purpose of calls. The FTC claimed that telemarketers falsely represented that they were following up on consumers' SSDI inquiries to induce them to purchase services.
- Collected consumer information through deceptive websites. The companies allegedly relied on lead generators that used sweepstakes and coupon websites to collect data without clearly disclosing that it would be used for telemarketing.
- Failed to oversee third-party vendors. The order requires the companies to monitor and pre-approve all lead-generation materials and to suspend or terminate vendors that mislead consumers.
Putting It Into Practice: Amid a broader federal pullback, the FTC has continued to pursue an active supervision and enforcement agenda (previously discussed here and here). Businesses that engage in outbound calls or rely on third-party leads should ensure that vendors obtain valid consent, scrub call lists against the National Do Not Call Registry, and maintain comprehensive oversight programs.
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