Consumer Education Group Fined, Prohibited from Making Illegal Telemarketing Calls

Group made millions of illegal telemarketing calls to generate sales leads for third parties

Consumer Education Group Fined, Prohibited from Making Illegal Telemarketing Calls
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November 2, 2016

A group of entities known as Consumer Education Group has settled charges filed by the Federal Trade Commission (FTC) alleging that it made millions of illegal telemarketing calls between late 2013 and 2015 to consumers registered on the National Do Not Call Registry in an attempt to generate sales leads for third parties.

The court order that settles the complaint prohibits the members of the Group from making such calls—including pre-recorded robocalls—requires them to pay a civil penalty of $100,000, and ensures that they will comply with the Telemarketing Sales Rule. Both the complaint and the order were filed on behalf of the FTC by the U.S. Department of Justice.

Jessica Rich is the director of the FTC's Bureau of Consumer Protection. "These telemarketers and lead generators ignored the National Do Not Call Registry and made illegal robocalls," she said. "It should be clear by now that companies are headed for law enforcement trouble when they use this kind of unlawful campaign to attract customers."

The FTC claimed that the defendants made websites and landing pages allowing consumers to fill out an online form supposedly for obtaining information about solar panels, reverse mortgages, walk-in bathtubs, and other products. The Group then used the names and phone numbers of the consumers to call them—either by direct dialing or via robocalls—to determine their level of interest in the products.

None of these calls identified the operation using a name that consumers would recognize as belonging to a person or entity that they had authorized to call them. More than two million such calls were made to consumers registered on the National Do Not Call Registry. The FTC claimed that the campaign was carried out not to solicit actual sales but instead to collect consumer names and phone numbers that could be sold to third party merchants as sales leads.

This conduct led the FTC to charge the members of the Group with violating the Telemarketing Sales Rule by illegally placing telemarketing calls to people whose numbers are listed on the National Do Not Call Registry and using robocalls in their telemarketing. Such pre-recorded phone calls have been against the law since September 1, 2009, unless the telemarketer possess an express, written agreement from consumers agreeing to receive the calls.

The proposed civil penalty order prohibits the defendants from violating the Telemarketing Sales Rule by doing the following: placing telemarketing calls to consumers registered with the National Do Not Call Registry unless they meet certain requirements; placing such calls to people who have asked them not to call again; and making telemarketing robocalls to people unless they have those consumers' express permission to do so.

The order imposes a suspended $2,339,687 penalty equivalent to the profits obtained by the defendants through their illegal actions. The defendants will pay the U.S. Treasury $100,000 because they are unable to pay the full penalty amount, but if it is later discovered that they misrepresented their financial condition to the FTC, the full penalty amount will become due.