A subsidiary of Primus Telecommunications Group Inc. agreed on September 7, 2004 to pay $400,000 in fines to settle allegations by the Federal Communications Commission that the VoIP company's telemarketing calls violated the national Do-Not-Call registry.
Primus did not admit or deny wrongdoing in the settlement. According to the FCC, Primus hired India-based teleservices agency Spanco Telesystems & Solutions Ltd. to handle its outbound calling campaigns, from which the company gets 40 percent of its sales. The FCC wrote Primus in December as part of a probe into more than 90 complaints of calls by the company to consumers registered on the Do-Not-Call list. For-profit telemarketers are supposed to check their lists of numbers against the Do-Not-Call registry.
In response, Primus said that it had implemented systems for avoiding calls to people on the Do-Not-Call registry prior to the registry's effective date. It also paid for list access as required. The day after it was notified of the investigation, Primus told Spanco to cease telemarketing on its behalf, according to a Primus spokeswoman.
Primus is among the first companies to be investigated for alleged violations of the Do-Not-Call rules, which went into effect in October, and the first to pay civil fines to settle charges. As reported in the July 19, 2004 issue of AdvertisingLaw@manatt, AT&T Corp. settled a Do-Not-Call case with the FCC in July, agreeing to pay $490,000 in fines for its violation of old rules that required companies to keep track of customers who asked the companies not to contact them with telephone solicitations.
Separately, the Federal Trade Commission, which maintains the database of more than 60 million telephone numbers, has filed four cases alleging violations of the rules, all of which are still pending.. Last week the agency filed a suit against Nevada telemarketer Braglia Marketing Group LLC, which the FTC alleges has made 300,000 telemarketing calls to numbers in the registry.
Significance: It is not always enough to have policies and procedures for compliance with telemarketing rules, as Primus said it did. Companies who hire subcontractors to conduct telemarketing campaigns should also take steps to ensure that the subcontractor is contractually obligated to abide by all telemarketing regulations, including the Do-Not-Call rules, and that effective monitoring or reporting-back systems are in place to confirm compliance.