FTC plans crackdown on 'Do Not Call' violators

A handful of recent Federal Trade Commission actions against companies accused of violating provisions of the federal "do not call" list have led to nearly $7.7 million in civil penalties paid by popular brands, including the adjustable-bed seller Craftmatic and alarm provider ADT.

FTC Chairwoman Deborah Platt Majoras announced those settlements, along with an additional complaint that has been filed in federal court, at a Wednesday briefing. The agency's four-year-old program includes telephone numbers of more than 145 million Americans who do not want telemarketing calls.

The FTC's complaint against Craftmatic alleged that the company and three of its subsidiaries ran sweepstakes promotions offering consumers who completed entry forms the chance to win a bed. The contest used consumers' phone numbers as their entry identifiers, and Craftmatic used the forms to place tens of thousands of calls to entrants.

The commission's complaint charged Craftmatic with placing millions of abandoned calls, which do not connect to live representatives within two seconds of when consumers say "hello."

Craftmatic, which reportedly also ignored consumers' requests to be placed on the firm's entity-specific do-not-call list, agreed to pay a $4.4 million civil penalty, which is the second-largest ever for that type of violation, Majoras said.

ADT and two of its authorized dealers, Alarm King and Direct Security Services, were charged with violations similar to those alleged against satellite television provider DirecTV in 2005, the agency said.

According to the FTC, ADT and its two dealers each reached out separately to consumers whose numbers were on the do-not-call registry. In settling the three complaints, ADT, Alarm King and DSS agreed to pay $2 million, $20,000 and $25,000, respectively.

Ameriquest Mortgage Company was charged with improperly calling consumers on the registry whose numbers had been obtained from third-party lead-generators, the FTC said. The company will pay $1 million and agreed to stipulations about its future use of lead-generators.

The FTC also slapped Guardian Communications with a complaint, alleging that the firm "blasted" phone numbers with recorded messages and terminated calls picked up by consumers rather than answering machines. Guardian will pay $150,000 of a $7.8 million penalty, which the company could not afford, officials said.

Meanwhile, the Justice Department, on behalf of the FTC, is pursuing a case in a California federal court against Global Mortgage Funding for making hundreds of thousands of calls to consumers on the do-not-call registry.

Although business compliance with the registry has been high, the FTC has filed 34 actions against companies and individuals who have violated the law, and the agency has obtained more than $16 million in penalties, Majoras said.