Robocalls

Top DNC Violations – CallFire

Over the past decade, the DNC has been responsible for hundreds of lawsuits against businesses large and small. Over the next few weeks, we’re going to count down the Top DNC Violations since its establishment. We’ll look at what each company was doing wrong, how they were charged for their mistakes, and what they could have done to fix them. Without further ado, we bring you the Top DNC Violations of All Time:

Top DNC Violations #9

Skyy Consulting Inc., which also does business as CallFire, is a cloud based telephony service provider that designs, creates and sells VoIP services and products. The company was founded in 2004, and has its headquarters located in California. In 2012 CallFire had an estimated 50,000 consumers throughout the country.

Skyy Consulting Inc. uses telemarketing as one of its promotional strategies in its marketing plans. The company and its clients call existing and potential consumers about their promotions, products and notification about the current state of their clients’ accounts, such as lease renewal.

What Did They Do Wrong?

Skyy Consulting Inc. or CallFire, allowed their clients to make prerecorded telemarketing calls to their consumers, without their prior consent. Telemarketing companies, in a bid to reach as many people as possible at one time, use Robocalls as a marketing method. The messages are either computer-generated voices, or they are personalized voices that are recorded and repeated over the phone.

The FTC made Robocalls for telemarketing campaigns illegal in 2009, in response to a massive number of scams that were taking place using robocalls as a prompt for people to go further with the conversation. These calls were used to make people believe they owed something to a particular company, and then they get put through to a ‘customer service provider’ who scammed them out of money.

The problem with robocalls is not just that they are intrusive and misleading, they are also sent out to millions of people at a time, regardless of whether the numbers listed are on the Do-Not-Call Data base.

The FTC ascertains that Skyy Consulting Inc, were aware that their clients were sending out pre-recorded telemarketing messages, and it is believed that in some cases, the company actually assisted their clients in doing so. The FTC charged that Skyy Consulting Inc. either knew all about their client’s robocalls, or that they merely turned a blind eye to the fact and simply avoided knowing.

These are serious violations against the Telemarketing Sales Rule (TSR) act, and the only time robocalls can be used in a legal manner is for public service or emergency announcements, and in some states for political use, although there are rules and regulations attached to these exceptions that vary from state to state.

The Charge

The FTC and Skyy Consulting Inc./CallFire reached a settlement that sees the company pay a fine of $75,000. The companies has also agreed to stop transmitting illegal robocalls to its consumers, as well as review all pre-recorded messages of its clients and to terminate the contracts of all clients that are found to have been sending out illegal pre-recorded messages.

The company must also review all of the existing pre-recorded messages on its database within 120 days, and delete any of the messages that do not comply with the TSR standards.

Repercussions

While $75,000 is quiet a substantial amount of money, the financial repercussions of the charge itself were not huge, as the company was one of the fastest growing small businesses in the United States, and it has recently expanded into the UK and Europe. But the company and its clients over use of illegal robocalls did the damage even before the charge was brought against them. One client stated that she received over 100 calls in a period of just 20 minutes, this constant harassment and inconvenience has caused a large number of customers to switch service providers.

As a relatively small business with just over 50,000 customers, Skyy Consulting Inc. will need to drastically re-adjust their telemarketing campaign if they wish to hold on to their existing client base, and to attract any more potential customers to the company.

Definitions Under the TCPA

Definitions Under the Telephone Consumer Protection Act (TCPA)

 

If you are in sales, marketing, or a telemarketer by trade it is important to understand the rules found within the Telephone Consumer Protection Act (TCPA) in order to avoid accidentally violating them. TCPA Violations can lead to fines or even losing the ability to telemarket.

Here is what you need to know:

Telemarketing Defined

The regulations consider a telemarketing call to be one made by advertisers to offer or sell products or services.  If you are simply providing information it is not telemarketing.  For example, an airline telling you a flight has been delayed is not considered telemarketing.

An Autodialer is a Machine or Software That Helps You Make Calls

When you have to pick up the phone and personally dial every call, it can take a lot of time and slow you down.  Minutes are wasted dialing, waiting for someone to answer, and getting busy signals.  An autodialer can automatically call people for you and give them a recorded message or connect you once they have answered.  While this is a more efficient calling method it is also more highly regulated.   If your autodialer delivers a pre-recorded message it is considered a robocall, the most highly regulated form of telemarketing.   Previously, if a consumer had an existing business relationship with you a robocall would be acceptable.  Now, there must be prior written consent in order to avoid a violation.

Text Messages Are Regulated by the TCPA

Recent regulation has made it more difficult for telemarketers to contact people on their cell phone.  Now, if you want to send a text message you need to have prior written consent from the consumer to do so.  This cannot be considered implied consent but must be clearly spelled out in writing.  You can have consumers sign their consent on a traditional piece of paper or electronically give their consent.  This is a big change because in the past an existing business relationship fulfilled this requirement. The only exception is text messages for the purpose of informing someone, rather than selling them something.

Do Not Call Registry 

It is important to always scrub your call list against the national Do Not Call Registry.  Remove anyone that is on the registry from your list.  If you contact someone that was not registered, but wants to be removed from your list, you must do so immediately.  It is wise to have a written policy in place for how you remove people once a request has been made.

Violating TCPA Regulations

If you violate the TCPA guidelines you could be fined anywhere from $500 to $1,500 per call, message, or text.  This is not per day but per call.  If you make 100 calls that violate these regulations that could be a $150,000 fine.  Many companies have gone out of business due to these penalties.

Stay up to date on regulation and create policies and procedures to protect yourself and your company.  Taking the time to ensure that you are in compliance could save you money and headaches down the road.