Assist-sense: Insights on liability under the Telemarketing Sales Rule
Lending a helping hand is great when you’re talking about a barn raising, a rent party, or assisting a little old lady across the street. But when the activity in question is, well, questionable — like selling businesses technology that can be used to place illegal robocalls — companies need to make sure they’re not assisting and facilitating violations of the law. That’s one message your clients should take from the FTC’s settlement with Skyy Consulting, which also does business under the name CallFire.
Based in Santa Monica, California, CallFire markets a variety of cloud-based services using VoIP (voice-over-internet protocol) technology, including a platform that lets clients make automatically dialed pre-recorded outbound telephone calls — in other words, robocalls. CallFire’s product at the center of the FTC’s case uses automated dialers to place calls on behalf of Callfire’s client to lists of phone numbers. When the calls are answered, the CallFire dialers play pre-recorded messages on the clients’ behalf.
The problem, of course, is that under the Telemarketing Sales Rule, it’s illegal to place outbound telemarketing calls to the 200+ million phone numbers on the Do Not Call Registry. And since 2009, amendments to the TSR make the delivery of most kinds of robocalls illegal, too. The Rule makes clear that liability isn’t limited just to the company selling something via illegal telemarketing. Companies also risk liability if they substantially assist or facilitate someone else’s TSR violations.
You’ll want to read the complaint for the specifics, but the pleadings recap the FTC’s allegations that CallFire either knew, or consciously avoided knowing, that their clients were violating the TSR.
In addition to imposing a $75,000 civil penalty, the proposed settlement bars CallFire from initiating illegal robocalls or violating the TSR in other ways. Under the order, CallFire has to review all the pre-recorded messages it delivers and terminate its contracts with any clients who are delivering illegal robocalls. In addition, CallFire has 120 days to take a look at all pre-recorded messages hosted on its platform to make sure they comply with the TSR.
The terms of the settlement apply just to CallFire, but the case reinforces two important messages for businesses. First, the scope of liability under the TSR is broad: “But we aren’t the ones actually selling stuff through telemarketing” isn’t a defense under the Rule. Second, depending on the circumstances, knowing — or consciously avoiding knowing — that a client is using your products or services to violate the TSR could land you in legal hot water. The bottom line: Be cautious about the company you keep.
Looking for compliance resources? Bookmark the Business Center’s Telemarketing page.