On August 11, the Federal Communications Commission handed down a $2.96 million fine against Travel Club Marketing Inc., related entities, and owner Olen Miller (collectively “Travel Club”), the largest fine in FCC history related to autodialed calls. The fine stems from allegations that the companies violated the Telephone Consumer Protection Act in their telemarketing efforts, including sales of vacations and timeshares. Travel Club was accused of making at least 185 “prerecorded advertising calls” to more than 142 cellular and residential telephone numbers, many of which were listed on the National Do Not Call Registry.
The fine culminates a formal regulatory process that began on October 31, 2011, when the FCC issued a Notice of Apparent Liability (NAL) to Travel Club proposing the $2.96 million forfeiture for “willful and repeated violation” of the TCPA. When Travel Club finally responded, the FCC noted the failure “to provide any information or make any arguments whatsoever to challenge the NAL’s findings” and that Travel Club “continued to make unlawful robocalls during the time that the NAL underlying this Forfeiture Order has been pending, the fact of which militates against a cancellation or reduction of the proposed forfeiture penalty.”
Under FCC rules applicable when the calls were made, such telemarketing calls were allowed only with “either prior express consent or an established business relationship” with call recipients, which Travel Club did not possess. The FCC has since further tightened these restrictions, ending the “established business relationship” exemption in 2012. The previous record fine was $2.9 million, ordered by the FCC in May 2014, in relation to autodialed calls made during the 2012 United States presidential campaign.
Although the fine represents a new high for an administrative enforcement action by the FCC, an ongoing enforcement action by the FTC and several states against Dish Network under the TCPA, the FTC’s Telemarketing Sales Rule, and parallel state laws is seeking, theoretically at least, billions of dollars in penalties arising out of allegedly illegal telemarketing calls. Our take on the Dish Network action can be found here.
Troutman Sanders LLP has unique industry-leading expertise with the TCPA, with experience gained trying TCPA cases to verdict and advising Fortune 50 companies regarding compliance strategy. We will continue to monitor regulatory and judicial interpretation of the TCPA in order to identify and advise on potential risks.