Largest Such Fine Ever; FTC Says It Is Sending a Signal

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WASHINGTON ( -– In the largest fine levied under the federal do-not-call registry law, DirecTV today agreed to pay $5.4 million to settle Federal Trade Commission charges the satellite TV provider didn’t adequately supervise the contractors it used to sell its dishes.
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The FTC said the fine was also the largest civil consumer penalty for violation of federal consumer laws. Based on the number of complaints, the FTC could have sought a larger penalty, but an agency spokesman said the amount is already 10 times greater than any other penalties related to the do-not-call law to date.

Second fine
For DirecTV, the fine is its second black eye in two days. The company yesterday settled for $5 million charges by attorneys general in 21 states that it misled consumers because its advertised programs were not always viewable or were blacked out; local channels it advertised as available weren’t; and that its cancellation policies were unfair.

Today’s FTC fine is significant not only in terms of its dollar size, but also because it represents a major move forward on do-not-call. The commission is sending the signal to marketers that they are responsible not only for their own direct marketing but also for direct marketing programs that benefit them.

FTC Chairman Deborah Platt Majoras said the action “drives home a simple point that what applies to sellers applies to all the players in the chain.”

Independent contractors
Ms. Majoras said the FTC received thousands of complaints about DirecTV, though most were about the actions of companies working as independent contractors selling satellite TV. All but one of the companies developed their lists of prospects to call independently of DirecTV, but DirecTV was penalized because it benefited from sales made as a result of improper calling.

The do-not-call registry is designed to enable consumers to block telemarketers from making calls to their home phone numbers. Under the regulations, telemarketers must remove all do-not-call entries from their own phone lists. Telemarketing companies are subject to an $11,000 fine for each call that violates the FTC's do-not-call provisions.

In addition to DirecTV, the complaint, filed by the FTC in U.S. District Court in Los Angeles, names five telemarketing firms that made the sales calls on DirecTV's behalf, along with six principals of those firms. Settlements with DirecTV and two of the telemarketing firms and their principals were filed along with the complaint.

'Ignored policies'
DirecTV in a statement said the majority of the complaints the FTC received “related to telemarketing calls placed by a small number of former independent retailers, who ignored DirecTV policies prohibiting unauthorized telemarketing.”

The American Teleservices Association praised the settlement, saying the FTC showed restraint and took action that allows DirecTV to “move on and conduct business that is compliant.”

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