Michele Shuster will be co-presenting an ATA webinar, “FCC Rules Clarified: Breakdown of the Recent Announcements,” on Thursday, February 23rd from 12:00PM-1:00PM EST. The webinar will focus on the FCC’s recent rulemaking and what it means for all telemarketers. Presenting along with Shuster will be Angela Morris of Quality Contact Solutions and ATA Counsel, Mitch Roth.

For more information, click here.

On February 16th, Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB) announced the launch of a Streamlining Regulations Feedback Web Tool. This tool enables you to more easily submit suggestions for streamlining regulations the CFPB has recently inherited from other Federal agencies.

Last November, the CFPB asked for input on how to streamline the regulations it inherited from seven Federal agencies. The CFPB asked for help in ”identifying provisions of the regulations that the Bureau should make the highest priority for updating, modifying, or eliminating because they are outdated, unduly burdensome, or unnecessary.” The CFPB aims to reduce the burdens imposed by existing regulations without reducing actual value to consumers.

The new web tool offers simple drop-down menus and links to regulation text that allow you to find regulations and sections within those regulations more effectively. It also offers multiple comment boxes for you to provide specific feedback that can help the CFPB decide how to act.

See the new web tool and weigh in on the streamlining of CFPB regulations:
http://www.consumerfinance.gov/regcomments/

Betty Montgomery will be speaking at the the Lincoln Day Dinner on February 23rd at Raven’s Glenn Winery. The dinner is hosted by the Coshocton County GOP.

The Federal Communications Commission (FCC) approved a Report and Order on February 15, 2012 that adopts significant amendments to its Telephone Consumer Protection Act (TCPA) regulations (Amended Regulations). The Amended Regulations impose additional requirements pertaining to prerecorded telemarketing messages and/or telemarketing calls made to cell phones. The regulations also include new call abandonment rules. Significant changes include the following:

1)      Autodialed Calls and Prerecorded Messages to Cell Phones.  No telemarketing calls may be made to a consumer’s cell phone using an automatic telephone dialing system (including a predictive dialer) or prerecorded message unless the consumer provided “prior express written consent.”  Written consent was not previously required.

• The requirements for obtaining prior express written consent mirror those required by the Federal Trade Commission (FTC) for prerecorded sales messages.
• Pursuant to the E-SIGN Act, an electronic signature (including a voice recording) is sufficient to constitute express written consent if all other requirements are met.
• The requirements for informational and other non-sales calls made to cell phones have not changed.  These calls may be made as long as the call recipient has provided “prior express consent” to be contacted at that number.

2)      Prerecorded Messages to Residential Numbers.  Prerecorded telemarketing messages may no longer be sent to residential numbers without the call recipient’s prior express written consent.

• This amendment eliminates the previous exemption, which allowed prerecorded messages to be sent to a consumer’s residential number if the caller had an established business relationship with the consumer.
• The requirements for informational and other non-sales calls made to residential numbers have not changed.  Consent is not required for such calls.

3)      Automated Opt-Outs for Prerecorded Messages.  All prerecorded telemarketing messages must include an automated, interactive voice and/or key-press-activated opt-out mechanism that allows consumers to make an internal do not call (DNC) request.  The mechanism must automatically add the consumer’s number to the caller’s internal DNC list and immediately terminate the call.  If the message is left on an answering machine or in a voice mailbox, the message must provide a toll free number that enables the consumer to connect to the automated opt-out mechanism.

4)      Abandoned Call Rate and Messages.  Telemarketers must measure their call abandonment rate over a 30-day period for a single calling campaign.  If campaigns last more than 30 days, the rate is calculated separately for each successive 30-day period.  Additionally, all abandoned call messages left during a telemarketing campaign must include the same automated opt-out mechanism required for prerecorded messages.

One notable and unfortunate aspect of the Report and Order is the discrepancy between the commentary and the final rules.  The commentary indicates that the Amended Regulations “require prior express written consent for all autodialed or prerecorded telemarketing calls to wireless numbers and residential numbers.”  The FCC has previously held that a predictive dialer constitutes an automatic telephone dialing system; therefore, this language implies that predictive dialers cannot be used to make telemarketing calls to residential numbers without prior express written consent.  The actual rule language, however, contradicts this interpretation.  The Amended Regulations only require prior express written consent for: (a) prerecorded telemarketing messages sent to cellular or residential numbers; and (b) autodialed calls (i.e. calls made using a predictive dialer) placed to cell phones.  Autodialed calls made to residential numbers are not subject to the prior express written consent requirement unless an artificial or prerecorded voice is used to deliver the message.

While the focus of the rule changes will understandably be on requirements that go beyond those imposed by the FTC’s Telemarketing Sales Rule, it is also important to be mindful of the impact other changes will have.  For example, although the new requirements for prerecorded messages sent to residential numbers mirror the FTC’s existing requirements, non-compliance with the Amended FCC Regulations creates an additional layer of risk because the TCPA provides a private right of action. With the proliferation of class action TCPA cases in recent years, private lawsuits pose a significant risk to telemarketers that violate the TCPA and/or its regulations.

Washington Attorney General Rob McKenna filed a complaint against a Washington dealer for engaging in “Power Booking” loans to get consumer’s qualified for loans by misrepresenting the value of the vehicle. This practice involved listing phantom options on the vehicle to inflate the true value. The Attorney General also alleged that the dealer misled consumers into believing a false sense of urgency existed by using phases such as “Emergency Sell-Off”. In addition, the dealer was accused of failing to comply with the Truth in Lending Act, advertising a gift as free when fees were required to be paid, misleading consumers by comparing the price of a used vehicle to MSRP, and failing to disclose the number of vehicles available at an advertised price in close proximity to the offer. The dealer was fined $100,000, with $40,000 in attorney’s fees and nearly $1,400 in costs to the state.

Washington is not the only state actively pursuing dealers and marketing firms for violations in automobile advertising. Regardless of the state they are in, these companies can avoid costly fines and scrutiny by hiring competent legal counsel who specialize in advertising compliance to review their advertisements.

Today the Federal Communications Commission (FCC) voted to amend its Telephone Consumer Protection Act (TCPA). The amendments have not been published, however, based on the FCC comments, the amendments include:
1. A company must have express written consent to place a prerecorded sales call to a consumer, which consent can be obtained electronically if compliant with the E-SIGN Act.
2. The “established business relationship” exception to the FCC’s TCPA will no longer apply to prerecorded sales calls.
3. Prerecorded sales calls must have an interactive opt-out mechanism so that the called party can stop further calls with a telephone key press.
Stay tuned for updates. Once the amendments are published, MPS will publish a detailed analysis.

The Federal Trade Commission recently reached a settlement with F&F Payment Processing Inc., Bajada Management Group Inc., Baird B. Fisher, Jacqueline M. Fisher, four defendants who allegedly engaged in phony debt relief services. Through the use of robocalls, Defendants claimed that, for $995, they could dramatically reduce consumers’ credit card interest rates. At most, the defendants sometimes telephoned credit card issuers and attempted to conduct three-way calls among the credit card company, the consumer, and one of the defendants’ so-called financial representatives.

Under the settlement the Defendants will be banned from robocalling consumers and from selling debt relief services. In addition the proposed settlement order permanently prohibits the companies and their owners from:

* making misrepresentations about any goods or services, including anyone’s ability to obtain a loan modification or improve a consumer’s credit rating;
* misrepresenting the terms of any refund or cancellation policy, affiliation with any government or non-profit program, or that a consumer will receive legal representation;
* violating the FTC’s Telemarketing Sales Rule;
* illegally calling numbers on the National Do Not Call Registry, or abandoning calls without involving a live operator; and
* failing to transmit caller identification, and failing to disclose the seller’s identity and the call’s purpose.

The settlement also prohibits the defendants from selling or otherwise benefitting from customers’ personal information, from failing to properly dispose of customers’ personal information within 30 days, and from failing to monitor sales personnel for compliance with the order. The order also imposes a judgment of more than $13.1 million, which will be suspended upon payment of $159,000 by the defendants who are part of the settlement.

The US District Court for the District of Massachusetts recently held, in Tyler v. Michaels Stores, that zip codes constitute personal identification information (PII) for purposes of a Massachusetts’ privacy law that prohibits businesses from recording consumers’ PII in connection with credit card transactions (certain exemptions apply).

The holding comports with a decision reached last year by the Supreme Court of California, in Pineda v. Williams-Sonoma Stores, Inc., involving a similar California law. Although the underlying rationales were different, the courts reached the same conclusion– zip codes constitute PII.

The court in Michaels Stores ultimately dismissed the case because the plaintiff did not allege a cognizable injury and, unlike the California law, Massachusetts’ law does not provide statutory damages. Plaintiffs, therefore, must prove actual damages to recover under Massachusetts’ law. Businesses should, however, be cognizant that zip codes may constitute PII under state privacy laws and have a detailed understanding of each state’s requirements and prohibitions pertaining to the collection of PII.

Shaun Petersen will be attending the NADA Convention in Las Vegas, Nevada from February 3rd-6th! For more information about the convention click here.

Dozens of supporters flooded into Jimmy V’s to attend Betty Montgomery’s kickoff event for her run for Ohio state Central Committee last night. Dozens of friends and former colleagues joined together to raise funds for her camapign and to volunteer to assist on the campaign. Betty graciously thanked everyone who took the time to attend the event.