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DirectTV to Pay $5.4M in Privacy Fines

Posted by Zonk on Tue Dec 13, 2005 03:48 PM
from the privacy-isn't-a-fad dept.
Privacy Communications
abscissa writes "Remember the do-not-call registry? DirecTV is in big trouble for violating the list, and faces the largest civil assessment ever obtained of $5.4M for harassing people over the phone at home and ignoring the registry. Although it looks like DirecTV was outsourcing all their telemarketing (obviously), the FTC recieved 1.4 million complaints, the biggest category of do-not-call violations ever recieved." From the article: "Majoras was quick to emphasize that the most important part of the settlement is that it sends a warning to companies that they cannot hire telemarketers and then turn their backs on whether or not the rules are followed."
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  • The First? (Score:4, Interesting)

    by mysqlrocks (783488) on Tuesday December 13 2005, @03:50PM (#14250070) Homepage Journal
    Correct me if I'm wrong, but isn't this the first actual lawsuit for violating the Do-Not-Call Registry law?
    • there was a famous case with ATT [usatoday.com] but it looks more like an FTC fine than a lawsuit.

    • I think there has been at least one made by FTC [bizreport.com] before this one.

    • Here's another one, [cbsnews.com] but this time, the fine proposed was the $11,000 per violation maximum.

      Makes you wonder why DirecTV is getting off so easy...

    • No, a private person (me) had the first. (Score:4, Informative)

      by TCPALaw (609927) on Tuesday December 13 2005, @05:16PM (#14251115)
      I brought what was the first action (AFAIK) for violations of the national do-not-call list back in February 2004. However, the defendant settled with a nondisclosure agreement. But a number of other have brought such cases, and they are public. The Telephone Consumer Protection Act, 47 U.S.C. 227 [tcpalaw.com] lets the individual consumer take people to small claims court for violating the do-not-call list, sending junk faxes, and making other illegal telemarketing calls. You get $500 to $1,500 per violation.

      A list of TCPA court cases regarding the national do-not-call list (as well as junk faxes and prerecorded telemarketing call) is at http://www.tcpalaw.com/free [tcpalaw.com]. FWIW, both the FTC and the FCC have jurisdiction here, but the FCC law 47 U.S.C. 227 [tcpalaw.com] lets the individual consumer sue in addition to the FCC going after the perps.

  • Drop in the Bucket (Score:5, Interesting)

    by Maizdog (863974) on Tuesday December 13 2005, @03:51PM (#14250081)
    Unfortunatly, it was probably worth it for them if they are only going to be fined $5.4M. That is a proverbial drop in the bucket that they will have made back by their tactics. The one hope, of course, is that there is some sort of brand name damage. Of course, I dont think consumers care quite enough to give up DirectTV so it is mostly a moot point.
    • I know companies such as DirecTV move a lot of money, but $5.4M seems it would be a lot more than a drop in the bucket of what they might have made through the tactics.

      -matthew
      • Sure, it is hardly a small fine, but it only works out to abou $3 per complaint. That is not much money. I imagine it would cost considerably more than that to handle each complaint (IANAA, so I don't know what's involved, but it seems quite plausible)
        • I don't think it makes sense to compare the fines to how much it costs to handle a complaint. The question is, how much does it cost DirectTV to make the telemarketing calls in the first place? And how much do they stand to make from it? I can see $5.4M seriously damaging their net profit in such a way that it would be been better to have followed the rules. And that is what matters.

          -matthew

      • Re:Drop in the Bucket (Score:5, Interesting)

        by sd_diamond (839492) on Tuesday December 13 2005, @04:30PM (#14250551) Homepage

        Actually, I am considering cancelling my installation scheduled for this Friday.

        Do it. Immediately. And if you don't, take my advice: NEVER use their online payment service. DirecTV is, IMO, a criminal organization. Last year, they issued an unauthorized double-charge on my account (I had paid that month's bill electronically on their web site) to the tune of $300. My wife and I spent two weeks on the phone with them trying to get the money back. They kept assuring us that it was going to happen, but the date kept slipping back. Worse, they wouldn't even let us speak directly with their finance department -- only clueless customer "service" reps. I finally had to go to my Credit Union and issue a Stop Payment to get my money back. Bad service is one thing; stealing money is in another category altogether. I wish the aforementioned settlement had a few more zeroes on the end; I would like nothing more than to see these scumbags sued into oblivion.

  • 1.4 million complaints (Score:5, Insightful)

    by OYAHHH (322809) * on Tuesday December 13 2005, @03:52PM (#14250084)
    If,

    It takes 1.4 million complaints to get action over the DNC list then I would say the DNC list is somewhat of a failure.

    Personally, anything over about 500 complaints is where I would set the limit.
    • If the FTC wants to go after DNC list violators in number-of-complaints-received order, that's fine by me.

    • Re:1.4 million complaints (Score:5, Insightful)

      by no reason to be here (218628) on Tuesday December 13 2005, @04:01PM (#14250206) Homepage
      500 is a little low. DirecTV outsourced this to another company, that company could have hundred of people manning the phones. The typical telmarketing call doesn't last that long, so once could easily exceed that 500 mark by lunch time. The point? That could very easily be a simple abberation in how strictly they follow the rules. If management (of either company) pays attention, they should be able to catch the abuse by day's end. Certainly, they would in a week, at which point, you'd have several thousand possible complaints logged.

      Qunatity of calls, I think, is the wrong way to look at it. The decision to levy fines for violating the DNC list should be based on a pattern of behavior. A company that consistently violates the list, even if they have a very small call volume, needs to be fined just as much as DirecTV is. For those opperations that are very large (like DirecTV) scale up the fine appropriately.
      • I'm not sure if, or how you figured in two factors. One, that only a certain % of calls would be to people on the DNC list, and, two, what % of people on the DNC list who were called, actually filed a complaint.

        I also wonder how a telemarketing company that does that volume of business could accidently do this. It says in one case DirecTV supplied the list. Didn't the telemarketing company check it agaisnst the DNC list, or did DirecTV give them the list with the understanding that they had already filtered

    • Fact jumble (Score:5, Informative)

      by ergo98 (9391) on Tuesday December 13 2005, @04:04PM (#14250238) Homepage Journal
      It takes 1.4 million complaints to get action over the DNC list then I would say the DNC list is somewhat of a failure.

      I'm going to guess that CNN jammed together some facts - this article [nwsource.com] makes some guesses at the number of people on the list that were called, saying "in the thousands". Certainly not in the millions. And of course it's doubtful many of the people called bothered to file a complaint, which is why the FTC just arbitrarily assessed a penalty of the maximum penalty per call per day.

      The article implies that the entire program has received 1.4 million complaints overall, which seems reasonable.
    • They should have been fined much more. 1.4 Million Complaints x $11,000 (the maximum fine per incident) = $15.4 Billion. Now that may be a bit excessive but the only message they are sending here, is "don't worry, you'll only be assessed the absolute minimum. After all $5.4M is only $3.85 per complaint. The time it takes me to file a complaint is worth more than that.

    • Theoretically speaking, shouldn't one complaint be sufficient? The idea is to keep companies from calling people who do not want to be called. If you're number is on the list, you're not supposed to be called.

      From the Do Not Call Registry [donotcall.gov] website: The National Do Not Call Registry gives you an opportunity to limit the telemarketing calls you receive. Once you register your phone number, telemarketers covered by the National Do Not Call Registry have up to 31 days (starting January 1, 2005) from the date y

    • If 1.4 million people complained, how many people DIDN'T complain?

  • So the message is... (Score:4, Interesting)

    by gid13 (620803) on Tuesday December 13 2005, @03:53PM (#14250107)
    It costs less than $4 per COMPLAINT (not even per person) to advertise this way. I guess it's better than free, but is this really a harsh enough punishment to do anything?

      • Re:So the message is... (Score:4, Insightful)

        by gid13 (620803) on Tuesday December 13 2005, @04:04PM (#14250252)
        Uh... Have you been smoking crack? They obviously cared because they put themselves on the DNC in the first place, which is entirely opt-in. It is not at all like an election, where we don't have a clear indication what someone would do.

        If people on the DNC list stop complaining, the logical assumption is not that they don't care, it's that they don't believe the system will work (they particularly might think this since they're still getting unwanted calls) or possibly they don't consider a $4 fine worth their time to report it.

  • 1.4 million complaints about DirectTV!? (Score:5, Interesting)

    by mindaktiviti (630001) on Tuesday December 13 2005, @03:54PM (#14250112)
    "Majoras said the DirecTV case accounted for 1.4 million complaints, the single biggest category of do-not-call violations the commission has ever received."

    Good lord that's a huge number.

    United States -- Population: 295,734,134

    So roughly 1/200 people (not taking into account that each household is probably 2-6 people) in all of the US took the time out of their lives to look up the FCC's phone number and complain. Yeah. I'd say they deserve to get fined.

    • Re:1.4 million complaints about DirectTV!? (Score:4, Interesting)

      by metternich (888601) on Tuesday December 13 2005, @04:00PM (#14250192)
      Fined? More like thrown in jail! Until CEOs start to personally suffer for the illegal actions of their companies, violating the law will simply be a business decision. (Expected Profit > Expected Penelty) -> Break Law.
      • Why the CEO? Stop the buck at the top. End unlimited liability and go after the CEO's boss - the shareholders.
        • Indeed. As Ambrose Bierce [alcyone.com] said:
          CORPORATION, n.
          An ingenious device for obtaining individual profit without individual responsibility.

        • Re:1.4 million complaints about DirectTV!? (Score:5, Interesting)

          by AndersOSU (873247) on Tuesday December 13 2005, @04:23PM (#14250444)
          This is a terrible suggestion every time it comes up.

          Corporations are set up specifically to limit the liablility of the investors. It's management's and the board of director's responsibility to keep the company practices ethical and legal while maximizing share-holder value.

          Feel free to criticize the idea of a corporation, but you can't change the rules in the middle of the game. If you choose to criticize the corporation bear in mind how hard it would to start a company if every one who wanted to give you money was on the hook for corporate debts. Say for instance you are mislead into investing in Enron (hey it could happen) and the company goes under. Enron's creditors now come after your property to pay Enron's debts.

          Whenever money is at stake there will be abuses, and no system is perfect, but corporations help our economy more than hurt it. Now, if corporations could see value in something other than quarterly earnings, had to stand on their own merits, and not be propped up or bailed out by the government we'd be making progress.
        • Theoretically, that's where the fine comes in. Profits for the quarter just dropped $5.3 million and the stock price went down a bit, "down $0.06 to $13.71" from TFA.

  • Misspelling? (Score:4, Informative)

    by Lithgon (896737) on Tuesday December 13 2005, @03:54PM (#14250117)
    Isn't it DirecTV, not DirectTV?

  • Yeah, but - (Score:3, Insightful)

    by Anonymous Coward on Tuesday December 13 2005, @03:57PM (#14250149)
    How much money did they make off the telemarketing? More than the fine?
  • I can see DirecTV defending itself... "Oh, no, they weren't telemarketing calls... those were all people that we suspected had purchased smartcards over the internet, and we were just calling to threaten them..."

  • Numbers don't add up... (Score:4, Interesting)

    by sholden (12227) on Tuesday December 13 2005, @04:00PM (#14250194) Homepage
    Majoras said the DirecTV case accounted for 1.4 million complaints, the single biggest category of do-not-call violations the commission has ever received.

    and

    The investigation into the case took about two years, according to Majoras. Large numbers of complaints began rolling into the FTC in November 2003

    and

    And Majoras confirmed that as more phone numbers are added to the registry, the FTC receives more complaints, currently between 2,000 and 3,000 a day.


    2*365*3000 = 1.46 million

    Are they seriously saying that 96% of all complaints for a two year period were about DirecTV?!?
  • First, that they are going to make more money even with this fine than otherwise having followed the list and...

    Second, every other company is doing this as well. Know the bit about collection agents not being able to call you at work? Surprise, Indian call centers for collection companies in the US call with total abandon, harassing all day long. Everyone in my family has gotten such calls. And since India is on the far side of the planet, they will call at two in the morning as if it was nothing; round th
  • The damage to their brand image is considerable. It's easy to wave that off (re: people's short memories) but they are spending $30 million *just* for their new DVR ad campaign. And they're not doing that on a lark.

    Believe me, this hurts them. It's not about the fine. It's about the black eye.
  • Whenever I received calls I didn't want, I'd spend a few seconds finding out what company ordered the call. Then I'd spend a few minutes calling the company's 800 # until I received a few employees. I figured the waste of my time probably incurred a few bucks loss on the company's books.

    The DNC registry is very pro-megamarketer. They know how they can get around it, but they also know thatthe DNC registry keeps the new marketers out of the market. This is mercantilism at its finest: government sets rul
    • Get a phone call you don't want? Call the company back and make sure you do it for double the damage you incurred.

      I'd always thought, if it had been done early enough, this could have killed SPAM. Imagine if everyone who received a Viagra SPAM called the company's toll-free number to say they didn't want to order anything? Or visited their web site and left a few messages. Heck, even have a SPAMmer of the day on /., where every /. reader was encouraged to "visit" the site of the day. Put the power of /.'ing

  • Overseas calls? (Score:4, Interesting)

    by kresjer (766768) on Tuesday December 13 2005, @04:15PM (#14250366)
    The "Do Not Call Registry" states that
    33. Are telemarketing calls from overseas covered?

    Yes. Any telemarketers calling U.S. consumers are covered, regardless of where they are calling from. If a company within the U.S. solicits sales through an overseas professional telemarketer, that U.S. company may be liable for any violations by the telemarketer. The FTC can initiate enforcement actions against such companies.
    But I wonder how they are going to force that to an non-U.S. company?
    • There is no point calling someone in the US unless you wish to do business with them (from a telemarketing perspective). They can fine an overseas company and, if they do not pay, bar them from doing business in the US. In the case of a telemarketing firm, this would prevent them from working for any US companies. If a US company (or the US-branch of a non-US company) decided to employ them anyway, then they would be liable for prosecution.

  • This is the cost of doing business.... (Score:5, Informative)

    by 8127972 (73495) on Tuesday December 13 2005, @04:17PM (#14250386)
    ..... As it makes zero difference to them. Consider the following:

    1. Their stock value barely moved today.
    2. They made $95 Million in the third quarter (vs a loss of $1.01 Billion in the previous year).
    3. They added 263000 customers in the third quarter.

    (All figures taken from their financial statements located at http://media.corporate-ir.net/media_files/irol/12/ 127160/pdf/Q32005EarningsRelease.pdf [corporate-ir.net])

    Net result. They'll pay the fine and move on. Breaking the law clearly has served it's purpose.

  • A follow up statute that adds "conspiracy to commit" as a penalty. Either make it a civil penalty that adds an extra twenty five to fifty percent cost to the fine to the true offending party, in this case DirecTV, and then fines the hell out of the outsource party or make it a criminal penalty with a charge of something like five minutes in prison for every complaint upon conviction. Yes, I know that in this case it'd send someone to prison for about thirteen years, but who cares?

    The federal government shou
  • Lucky you. In the UK we have something similar, but it's has to relevance. It's completely ignored, we get phone calls tridaily at least, there haven't been any lawsuits or anything it's complete anarchy it's like spam email.
    • In the UK, it doesn't cost to receive mobile telephone calls. It does, however, cost a lot for a telemarketing firm to make them, since calls to mobiles are not covered by the standard packages they buy. If you give out your mobile number, instead of a land-line, to anyone you think might call you, then you will not get any telemarketing calls.

  • DirecTV = Thousands of Complaints, Not Millions (Score:3, Informative)

    by akiy (56302) on Tuesday December 13 2005, @04:20PM (#14250420) Homepage
    This fine article [msn.com] states that although "More than 1 million people have complained to the Federal Trade Commission that annoying telemarketing calls haven't stopped -- even after they've registered with the do-not-call registry, [...] FTC Chairwoman Deborah Platt Majoras said that "thousands" of consumers complained that they received telephone solicitations for DirecTV."

    The CNN article linked originally above states, "Majoras said the DirecTV case accounted for 1.4 million complaints."

    I'm thinking that the CNN article got its facts wrong here...

    • Do they have a marketing company that follows the laws?

      Half of all illegal phone calls i get are from DirecTv, leaving the rest of the world for the other half. Oddly enough half of the rest are for their competitor!

      I've thought about satelite since i've a grudge against the cableco, but they strike me as at least as sleazy so i have neither :(

      I bet i have gotten dozens of automated marketing calls from them...WA state is supposed to be 100% live callers.

    • The law should say that whoever is advertised as being the originator of "the message", no matter who they contracted to do the dialing, they're still responsible for how their contractor behaves in their name. Now, if there's a problem, the original company pays the fine, and if they're not happy with it they get to go after their contractor in court (and if they subcontracted, they get to do the same, all the way down the chain).

      This closes the whole "set up shell company and fuck people over in the nam

    • IANAL, but I've been helping a law student study torts. Unless there is proof that DirecTV knew that the telemarketing company they hired was not complying with the DNC or other relevent laws and made no action, DirecTV is not liable for the outsourced company's damages.

      If I was a lawyer, I'd cry bullshit here.

      If you hire someone to do something, they are acting as an agent on your behalf, no? You're still responsible for what they do, because, effectively it's still you doing it.

      I find it exceedingly unli

    • Well, if it's true that this company made $95M in the third quarter, and the fine was a mere $5.4M, then don't be afraid to stop thinking that the Do Not Call list is a joke...

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