'Act of defiance': FCC fights fax.com

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A Federal Communications Commission effort to enforce a federal law that bars unsolicited faxes is being labeled a "vindictive" effort at "retaliation." The charge comes from fax.com, the company that won a ruling from a federal judge six months ago that the law failed free speech tests.

Mary Ann Wymore, an attorney for fax.com, claimed the FCC went a step beyond enforcing the law while the ruling is appealed, and suggested it is attempting to damage the company. "They have less of a concern about what is legally collectable than in trying to injure this company," she said. "They are trying to do an end run around the judge's decision. They don't like the fact they lost."

The FCC last week moved to fine fax.com $5,379,000 for 489 violations of the Telephone Consumer Protection Act, which bans junk faxes. While that fine is unlikely to be paid during the appeal of the court decision, the FCC also announced it was sending out 100 citations and letters of inquiry to businesses that use fax.com, warning they could face $11,000 in fines for each unsolicited transmission.

Ms. Wymore said the company would likely move into court to deal with the FCC action quickly.

She called it an "act of defiance" against the judgement handed down in March by Federal District Court Judge Steven N. Limbaugh in St. Louis. (AA, April 1). Fax.com had challenged the part of the law that banned unsolicited fax ads, arguing it amounted to a ban on commercial speech.

`No rationality'

Judge Limbaugh's 24-page decision cited several recent Supreme Court cases in siding with fax.com. He said the government hadn't shown the faxes were harmful and that it has far less restrictive alternatives to reduce the number of faxes. The judge said the law's attempt to ban fax ads while allowing other unsolicited faxes had "no rationality."

The FCC, in announcing its action last week, accused fax.com of engaging in a "pervasive and egregious pattern of deception" and said it was seeking the maximum fine-the largest ever sought against a company for a violation of the Telephone Consumer Protection Act.

The FCC declined to react to the company's response.

The FCC action came as the Federal Trade Commission won action on another front: direct mail solicitation checks that look like rebates, but in fact represent an order for service or supplies. Two years ago the FTC accused cyberspace.com and several sibling companies with violating the consumer protection act.

In a Seattle ruling that could affect a number of marketers, a U.S. District Court Judge Robert S. Lasnik found the practice deceptive.

"As a matter of law, check/invoice combinations that do not clearly and conspicuously disclose the effects of cashing the check and/or clearly state that the check is an offer ... on the face of the document constitute material representations that are likely to mislead consumers acting reasonably," the judge wrote. Lawyers for the affected companies didn't return calls for comment.

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