Two individuals and one corporate defendant have been fined $530,000 for several violations of the Federal Trade Commission’s Telemarketing Sales Rule (“TSR”) and its Do Not Call (“DNC”) provisions, including the transmission of false or no caller ID information.
The case marked the first time the agency has charged a telemarketer with transmitting phony caller ID information. Under the DNC provisions of the TSR, telemarketers must transmit accurate caller ID information so consumers can contact them to stop unwanted calls.
The case arose from a telemarketing scheme by defendants Srikanth Venkataraman, Sridhar Bhupatiraju, and Scorpio Systems to sell mortgage loans, refinancing, and other products and services to U.S. consumers. Scorpio allegedly called numbers on the Do Not Call Registry, failed to transmit its telephone number and name to recipients’ caller ID service, and failed to pay the fee required to access the Registry. The telemarketer transmitted either no caller ID or a phony caller ID number – 234-567-8923 – preventing consumers from contacting it.
The final court order bans the defendants from violating the TSR in the future, states that they agree not to contest any of the facts alleged by the FTC, and makes them liable for their TSR violations. The order also imposes suspended fines of $530,000 against each of the individual defendants and $160,000 against the corporate defendant – reflecting the total gross revenues from their scheme. Based on the defendants’ inability to pay, however, the order requires Venkataraman to pay $15,000, Bhupatiraju to pay $10,000, and Software Transformations (a successor corporation to Scorpio Systems) to pay $20,000. It also contains a right to reopen the case if the FTC finds the defendants have misrepresented their financial condition.