Privacy & Information Security Law Blog

On November 1, 2016, the FTC announced that a group of entities known as the Consumer Education Group (“CEG”) settled FTC charges that, between late 2013 and 2015, it made millions of telemarketing calls, including pre-recorded robocalls, to consumers on the national Do Not Call (“DNC”) Registry, in violation of the Telemarketing Sales Rule (“TSR”).

The FTC’s complaint alleged that CEG created websites that allowed consumers to complete an online form to supposedly receive information about “solar panels, reverse mortgages, walk-in bathtubs and other products,” but in fact used the consumers’ names and phone numbers to call the consumers to gauge their interest in these products and then sell the information as leads to third-party merchants. More than two million calls were placed, including pre-recorded robocalls (illegal under the TSR, absent express written permission from the consumer), to consumers registered on the DNC Registry, in violation of the TSR.

The proposed order imposes on CEG a suspended $2,339,687 civil penalty, reflecting the revenue that CEG obtained through the illegal telemarketing. Due to its inability to pay the full amount, CEG will pay $100,000, but the full amount will become due if CEG is later found to have misrepresented its financial condition to the FTC. The proposed order also bars CEG from violating the TSR by, among other actions:

• making outbound telemarketing calls to consumers registered with the DNC Registry unless they meet certain requirements;
• making telemarketing calls to consumers who have asked CEG not to call again; and
• making pre-recorded telemarketing robocalls to consumers absent consumers’ express written permission to do so.

The DOJ filed the complaint and proposed order on behalf of the FTC in the U.S. District Court for the District of Colorado.