FTC Issues Biennial Report on the National Do-Not-Call Registry
On December 22, 2017, the FTC issued its Biennial Report to Congress on the National Do-Not-Call Registry, which lists the telephone numbers at which individuals have requested that they not be called by telemarketers. The report provides an overview of the Registry’s operations for 2016 and 2017 and guidance for continued compliance with the Registry in 2018 and beyond. The key takeaways from the Report are discussed below.
According to the FTC, more than 3.8 million telephone numbers were added to the Registry in 2017, which brings the total number of active registration to more than 229 million. Also in 2017, 2,259 entities paid more than $12.6 million for access to the Registry and an additional 15,536 entities subscribed to access five or fewer area codes at no charge.
Despite the increase in entities accessing the Registry, consumer complaints also increased. The FTC received an average of more than 375,000 robocall complaints per month in 2017 and the FCC has received nearly 185,000 complaints from consumers about unwanted calls since August 1, 2016. According to the Report, the increased number of complaints are largely attributable to technological advancements that make it easier to call registered numbers. For example, Voice over Internet Protocols and spoofing technologies—which allows a caller to fake the caller identification information to conceal the caller’s identity from consumers and law enforcement—are making it easier for “individuals and companies who do not care about complying with the Registry or other telemarketing laws” to make illegal telemarketing calls “cheaply” and from anywhere in the world, which “makes it difficult for the FTC and other law enforcement agencies to find them.”
The FTC also reminded businesses to exercise caution when relying on the “established business relationship” exception for calls to registered numbers. Specifically, the FTC indicated that the existence of an established business relationship hinges on the consumer’s expectations. In other words, in the FTC’s view the existence of an established business relationship will depend on whether a consumer is likely to be surprised by a call. It also stated that calls to registered numbers acquired from lead generators are unlikely to fall within this exception unless the consumer inquired about the specific services of a specific business or the lead generator alerted the consumer that he or she should expect telemarketing calls from the business as a result of communications with the lead generator.
It should be noted that placing calls to registered numbers can be costly. For example, in 2017 alone Dish Network was hit with nearly $341 million in penalties and fines—much of which it has appealed—arising from calls its vendors had placed to numbers on the Do-Not-Call Registry. See Krakauer v. Dish Network L.L.C., No. 14-333, 2017 WL 2242952 (M.D.N.C. May 22, 2017) (jury verdict of approximately $20.5 million in statutory damages, which district court subsequently trebled); United States of America et al. v. Dish Network LLC, 256 F. Supp. 3d 810 (C.D. Ill. 2017) (imposing statutory penalties and fines of $280 million). To minimize the risk of such penalties, it is imperative to adopt vendor management programs and ensure that vendors develop and implement their own compliance policies.