FTC Takes Action Against First Do-Not-Call List Violator

 

May 4, 2004--The Federal Trade Commission (FTC) took its first action against violators of the do-not-call list today. The FTC has filed a complaint against a group of defendants masquerading as a nonprofit debt negotiation organization to access and call names on the National Do No Call Registry. (Charities, political organizations, and organizations conducting surveys are not covered by the Do Not Call provisions.)

According to the FTC, a web of companies calling themselves the National Consumer Council (NCC) have made millions of dollars deceiving consumers into enrolling in a debt negotiation program by promising to reduce their debts. By doing so, the NCC has violated the FTC act, which prohibits deceptive practices, and the Telemarketing Sales Rules (TSR) by calling numbers on the National Do Not Call Registry.

The NCC leaves pre-recorded messages on consumers' phones, describing itself as a nonprofit debt organization that can help stop creditors' collection efforts and reduce consumer debt. When a consumer returns a call, he or she is encouraged to enroll in a debt reduction program, which the FTC claims rarely results in reducing a consumer's debt. According to papers filed with the court, the NCC's program, in many cases, worsened the financial situation of consumers and forced many to file for bankruptcy.

According to the FTC, a U.S. District Court judge has issued a temporary restraining order against the NCC to stop its "illegal activities."