The Federal Trade Commission recently fined mortgage broker Michael Nikravesh $50,000 for breaking National Do Not Call regulations. The interesting feature of this settlement was that Mr. Nikravesh claimed that he had relied on list brokers to provide DNC compliance. However, a federal court ruled that the defendant was responsible for two infractions:

  1. He had not independently scrubbed his purchased lead lists for DNC compliance. The court made it clear that the list purchaser cannot rely on the list seller for DNC compliance, but must instead perform its own independent checks. The defendant made calls to people who were, in fact, on the NDNC Registry.
  2. The list buyer must pay for access to the Registry to check whether the listed persons and companies are on the Registry, even if the buyer properly paid for the lists themselves. It is against the law to telemarket to consumers without first purchasing access to the Registry, even if said consumers are not on the Registry. goes through painstaking checks on the lists it sells to make sure that they are 100 percent DNC compliant. The FTC, with this action, reaffirms that no matter how good the quality of the purchased list, the ultimate responsibility lies with the list buyer, not the list seller. All legitimate list brokers must comply with the Telemarketing Sales Rule as regards to the NDNC Registry. Mr. Nikravesh was not allowed to plead ignorance of his responsibilities as a telemarketer to perform his own DNC verification.

Besides finding against Mr. Nikravesh, the settlement included related California-based corporation Executive Financial Home Loan and another individual, Ron Fattal, an officer of the same corporation.

Joseph Leweczak, an attorney with the New York firm Davis & Gilbert, noted that there is one area where some confusion remains, having to do with franchises and dealers. If a manufacture or franchiser buys a lead list, performs its own DNC compliance, and then distributes the list to franchisees or independent companies, are the latter compelled to perform their own compliance checks? He stated that DNC compliance checks by a parent company do not typically relieve franchises and independent companies from their responsibilities to check against the NDNC Registry.

We are confident that sells the cleanest, most compliant lead lists in the industry. That goes not only for NDNC Registry compliance, but also state DNC lists as well. Nevertheless, it is important for list buyers to be aware of and comply with the FTC’s interpretation of the Telemarketing Sales Rule.

Eric Bank