US gov't fines DirecTV for do-not-call rule violations

14.12.2005
Satellite television company DirecTV Inc. would have to pay a US$5.3 million fine for violating U.S. Do-Not-Call rules if a judge OKs a settlement between the company and the Federal Trade Commission.

A lawsuit brought by the U.S. Department of Justice on behalf of the FTC alleges that telemarketers working for El Segundo, Calif.-based DirecTV called potential customers who were listed in the national do-not-call registry. The lawsuit was filed in the U.S. District Court of Los Angeles and named as defendants DirecTV, five telemarketing firms that worked for it and six principals of those telemarketing companies. The FTC said today that this is the largest civil fine ever imposed by the agency for a violation of consumer protection laws.

"This multimillion-dollar penalty drives home a simple point: Sellers are on the hook for calls placed on their behalf," FTC Chairman Deborah Platt Majoras said in a statement. "The do-not-call rule applies to all players in the marketing chain, including retailers and their telemarketers."

In the lawsuit, the FTC accused Global Satellite, one of the telemarketers working for DirecTV, of abandoning calls by failing to put a live representative on the phone two seconds after the person being called answered the phone.

"The majority of the complaints were the result of calls placed on behalf of a handful of independent retailers," DirecTV said in a statement. "DirecTV has terminated its relationships with those retailers. Some of the complaints were the result of a mistake made in 2003 by a company that DirecTV hired to make calls on its behalf, and appropriate procedures have been implemented to assure the mistake will not reoccur."

The FTC action could prove to be a cautionary tale for telemarketers, whose sophisticated CRM systems can quickly generate automated marketing and sales campaigns, said Joshua Greenbaum, analyst at Enterprise Applications Consulting in Berkeley, Calif. Using available database and sales applications, a single telemarketer can "hit thousands, if not millions, of customers extraordinarily easily," he said. "The danger of the automation almost demands closer human scrutiny of the process, because the effect can be so extraordinarily bad."