- Self-Disclose to Avoid Self-Sabotage: Clarifying DOJ’s Criminal Corporate Self-Disclosure Policy for US Attorney Offices
- With Recent Enforcement Action, DOJ and FTC Join the FCC in Targeting the Use of Ringless Voicemails
- DePuy Agrees to Pay $9.75 Million in FCA Kickback Investigation
- What to Expect from the CFPB in 2023
- Prudential Regulators Are Concerned About Crypto
- CFPB Orders Wells Fargo to Pay $3.7 Billion
- CFPB Seeking More Than $1 Billion in Fines from Wells Fargo
- CFPB Unveils Proposals for Financial Data Rights Rule
- Doctor Pleads Guilty to Role in $54 Million Kickback Fraud Scheme
- Medicare Fraud Musings of a Former DOJ Trial Attorney: Let’s Talk Bank Exam Privilege
- Department of Justice (DOJ)
- False Claims Act
- Corporate Criminal Enforcement
- Financial Institutions
- Consumer Protection
- White Collar & Investigations
- Anti-Kickback Statute
- Cooperation Credit
- Medicare Fraud
- Bank Exam Privilege
- Paycheck Protection Program
- Stark Law
White Collar + Fraud + Investigations + Compliance
On February 17, 2023, the FTC brought its first civil enforcement action under the Telemarketing Sales Rule, 16 C.F.R. Part 310 (“TSR”), in nearly one year. In U.S. v. Stratics Networks Inc., et al., which was filed in the U.S. District Court for the Southern District of California, the FTC seeks to stop a group of companies and individuals that it claims are “responsible for delivering tens of millions of unwanted Voice Over Internet Protocol (VoIP) and ringless voicemail (RVM) phony debt service robocalls to consumers nationwide.” Because the FTC is seeking civil penalties, the Complaint was filed by the Department of Justice on behalf of the FTC.
The Complaint alleges that certain telecommunications service companies, Stratics Networks, Inc., Netlatitude Inc., and Kurt Hannigan, Netlatitude’s president, violated the TSR by providing assistance and technological support to telemarketers that placed calls, including ringless voicemails, to numbers on the National Do Not Call Registry and without truthfully identifying the seller of the goods and services being marketed.
The FTC also named as defendants several of Stratics Networks’ customers that the FTC alleges used the Stratics Networks platform to illegally telemarket credit card debt relief services. The Complaint alleges that certain of these defendants violated the Federal Trade Commission Act, 15 U.S.C. § 45(a), by misrepresenting the terms of services and violated the TSR by making such misrepresentations, failing to clearly and truthfully identify the seller of their services, placing prerecorded voice messages without consent, and charging or receiving a fee in advance of providing debt relief services.
Although the TSR does not specifically address ringless voicemail and does not expressly provide that ringless voicemails are calls covered by the TSR, the Complaint alleges that Stratics knew or should have been aware that ringless voicemails are covered by the TSR based on the FTC’s case against Redwood Scientific Technologies, Inc., which was pending in the U.S. District Court for the Central District of California between October 2018 and 2022, and addressed this topic. See U.S. v. Cardiff, et al., No. 18-cv-2104 (C.D. Cal. 2018).
The FCC also recently issued a declaratory ruling establishing that ringless voicemails constitute calls under the Telephone Consumer Protection Act. With this additional enforcement action from the FTC, it appears that both federal agencies are targeting the use of ringless voicemail technologies in violation of telemarketing laws.
You can subscribe to Justice Muse here.
Molly McGinley is a litigation attorney concentrating her practice in commercial litigation with a focus on complex litigation, including class action defense and derivative litigation. She represents a broad range of clients ...
Steve Wernikoff is a litigation and transactional partner who co-leads two of the firm's technology-based practice areas–the Data, Privacy, and Cybersecurity group and the Autonomous Vehicle group. As a previous officer and ...