Three Utah telemarketing companies and their owner will pay a penalty of approximately $500,000 for flooding phones on the Do Not Call Registry with nearly 100 million calls and making more than 4 million additional calls that included misleading statements to induce the sale of DVDs.
In an order issued Friday, U.S. District Judge Robert Shelby imposed the penalty and also entered a permanent injunction that prohibits Forrest S. Baker III and his companies — Feature Films for Families Inc., Corporations for Character L.C. and Family Films of Utah Inc. — from engaging in deceptive and abusive telemarketing practices.
The order stems from a complaint — which was filed by the U.S. Department of Justice at the request of the Federal Trade Commission (FTC) — that went to trial in Salt Lake City’s federal court in May 2016.
A jury found the companies committed more than 117 million knowing violations of the Telemarketing Sales Rule, including making approximately 100 million calls (99,990,565, to be exact) to Do Not Call phones; making 4 million false or misleading calls; failing to provide required caller-identification information on about 8 million calls; and not supplying required oral disclosures on about 5.8 million calls.
The jury also found that Baker, who was both owner and top officer of the three companies, knew of, or had the basis for knowing, that illegal calls were being made to sell or promote movies or solicit funds for nonprofit organizations.
The jury verdict was the first in an action to enforce the Telemarketing Sales Rule and Do Not Call Registry rules, according to the Justice Department. Other cases have been tried before a judge or settled before trial.
The defendants got a break in Shelby’s order — the judge had imposed a penalty of $45.4 million but reduced it to $487,735 based on their inability to pay the full amount.
The complaint, which was filed in Florida originally and then transferred to Utah, alleged the companies engaged in deceptive telemarketing to sell DVDs or tickets for family-friendly movies.
The FTC alleges that in a 2009 calling campaign, the defendants called consumers to urge them to buy tickets to see “The Velveteen Rabbit,” a film produced by Baker and released in theaters before going to DVD. The complaint alleges the telemarketers called more than 2.5 million consumers whose numbers were on the Do Not Call Registry.
The companies also provided telemarketing services for other organizations, including some charities, and made a number of false statements, according to the complaint. In one case, call recipients were told that all proceeds would go to a charity called Kids First, when telemarketers actually kept 93 percent for themselves.
Acting Assistant Attorney General Chad A. Readler of the DOJ’s Civil Division said Monday in a written statement that unwanted telemarketing calls invade consumers’ privacy.
“The Department of Justice will continue to work with the Federal Trade Commission to ensure telemarketers adhere to laws designed to protect against abusive and deceptive telemarketing practices,” Readler said.