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DirectTV to Pay $5.4M in Privacy Fines

Posted by Zonk on from the privacy-isn't-a-fad dept.

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."

35 of 187 comments (clear)

  1. The First? by mysqlrocks · · Score: 3, Interesting

    Correct me if I'm wrong, but isn't this the first actual lawsuit for violating the Do-Not-Call Registry law?

    --
    Bradley Holt
    1. Re:The First? by ch-chuck · · Score: 3, Informative

      there was a famous case with ATT but it looks more like an FTC fine than a lawsuit.

      --
      try { do() || do_not(); } catch (JediException err) { yoda(err); }
    2. Re:The First? by mikkom · · Score: 2

      I think there has been at least one made by FTC before this one.

      --
      My quality social news site.com.
    3. Re:The First? by Saxophonist · · Score: 3, Informative

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

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

    4. Re:The First? by c0n0 · · Score: 2, Informative

      FTFA "Prior to the DirecTV settlement, the biggest penalty levied over unsolicited calls was a $500,000 penalty against a company called Flagship."

  2. Drop in the Bucket by Maizdog · · Score: 5, Interesting

    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.

    1. Re:Drop in the Bucket by sd_diamond · · Score: 5, Interesting

      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.

    2. Re:Drop in the Bucket by misleb · · Score: 2, Insightful

      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

      --
      "THERE IS NO JUSTICE, THERE IS ONLY ME." -Death
  3. 1.4 million complaints by OYAHHH · · Score: 5, Insightful

    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.

    --
    Caution: Contents under pressure
    1. Re:1.4 million complaints by no+reason+to+be+here · · Score: 4, Insightful

      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.

      --
      my pet machine
    2. Re:1.4 million complaints by shotfeel · · Score: 2, Interesting

      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 the list? In the cases where telemarketing companies were simply paid a commision (assuming they used their own list of numbers), I would think they would ultimately be responsible (and it sounds like they were held accountable).

  4. So the message is... by gid13 · · Score: 3, Interesting

    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?

    1. Re:So the message is... by gid13 · · Score: 3, Insightful

      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.

  5. 1.4 million complaints about DirectTV!? by mindaktiviti · · Score: 4, Interesting

    "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.

    1. Re:1.4 million complaints about DirectTV!? by metternich · · Score: 3, Interesting

      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.

      --
      Facts do not cease to exist because they are ignored.
    2. Re:1.4 million complaints about DirectTV!? by metternich · · Score: 2, Funny

      Indeed. As Ambrose Bierce said:
      CORPORATION, n.
      An ingenious device for obtaining individual profit without individual responsibility.

      --
      Facts do not cease to exist because they are ignored.
    3. Re:1.4 million complaints about DirectTV!? by AndersOSU · · Score: 4, Interesting

      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.

    4. Re:1.4 million complaints about DirectTV!? by Pxtl · · Score: 2, Interesting

      Fine. End limited -legal- liability. Just not -fiscal- liability. Allow a judge to fine the shareholders directly. Thus, if a business is an abysmal failure, then the shareholders maintain their economic condom. Conversely, if a corporation behaves in a manner that could only be described as criminal and destructive, then a judge can hold accountable it's financiers.

  6. Misspelling? by Lithgon · · Score: 4, Informative

    Isn't it DirecTV, not DirectTV?

    1. Re:Misspelling? by meatflower · · Score: 3, Informative

      Correct! Though apparently DirecTV owns not only http://www.directv.com/ but http://www.directtv.com/ as well in case you didn't figure out their oh so clever name!

  7. Yeah, but - by Anonymous Coward · · Score: 3, Insightful

    How much money did they make off the telemarketing? More than the fine?

  8. Numbers don't add up... by sholden · · Score: 3, Interesting
    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?!?
    1. Re:Numbers don't add up... by sholden · · Score: 2

      So I made a typo. 2000 not 3000. (it's been increasing over time and we are talking about the past so we use the lower end of the daily range).

  9. Fact jumble by ergo98 · · Score: 5, Informative

    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 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.

  10. Two thoughts by suitepotato · · Score: 2, Informative

    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 the clock calls.

    Companies largely do figure they aren't responsible for the acts of their contractors. DirecTV certainly does, both with this and with installations. Comcast sure DOESN'T and will fire contractors in an instant for screwing up in any way the breaks regulations or laws. If I was looking for TV service and Comcast didn't violate the no-call and DirecTV did, I'd not be going with DirecTV but arse-end-up world this is, you can bet thousands of those called did go with DirecTV to spite the cable operator that didn't violate the do not call list.

    --
    If my grammar and spelling are off, I am [distracted/tired/careless] (take your pick)
  11. Overseas calls? by kresjer · · Score: 4, Interesting
    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?
  12. This is the cost of doing business.... by 8127972 · · Score: 4, Informative

    ..... 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)

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

    --
    This is my opinion. To make sure you don't steal it, it's covered by the DMCA.
  13. DirecTV = Thousands of Complaints, Not Millions by akiy · · Score: 2, Informative
    This fine article 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...

    --

    --
    http://www.aikiweb.com - AikiWeb Aikido Information

  14. No, they got it right. by eddy · · Score: 3, Informative

    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 name of holy capitalism" loop-hole quite nicely, don't you think?

    --
    Belief is the currency of delusion.
  15. Re:suing the wrong company by gstoddart · · Score: 2
    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 unlikely that you can clear yourself of any and all responsibility for everything just merely by hiring a sub-contractor.

    For the same reason that when an outsourced overseas person steals confidential information, the company who violated the privacy laws by giving it to them is still liable. If you hand over my credit card information which you were entrusted with, you do not get absolved of all blame if the oursourced person robs me blind.

    If that is the case, you'll probably see a lot of companies start paying "Bud's Toxic Waste Disposal" shockingly small sums of money to get rid of such stuff. Then when the stuff turns up on a beach someplace, they can just sound shocked and unsure of how it got there, but they'll be off the hook because they hired a third party.

    Your description sounds completely irrational. ( Then again, we're talking about law here, which can be irrational in places I'm told. )
    --
    Lost at C:>. Found at C.
  16. No, a private person (me) had the first. by TCPALaw · · Score: 4, Informative
    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 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. FWIW, both the FTC and the FCC have jurisdiction here, but the FCC law 47 U.S.C. 227 lets the individual consumer sue in addition to the FCC going after the perps.

  17. Recorded message are illegal, and you get paid. by TCPALaw · · Score: 2, Informative
    Recorded sales message (unsolicited advertisements as defined by the statute) are illegal when made to residences in the USA. 47 U.S.C. 227(b)(1)(B). The law lets the individual consumer sue for a mandatory minimum of $500 per violation, in addition to the FCC going after the perps.

    Go down to your local small claims court and sue the bastards. It is a very rewarding experience!

  18. Easy... by TCPALaw · · Score: 2, Informative

    You don't enforce it on the overseas telemarketer.... you enforce it on the US Company that hired them to sell their products. That's what agency law is all about... vicarious liability. You hire someone to do it, you are liable for what they do on your behalf. Respondeat Superior.

  19. close by c0n0 · · Score: 2, Interesting

    Damn...for one reason or another I never get to test the anti-telemarketing Counterscript

  20. Re:suing the wrong company by parasonic · · Score: 2, Informative

    That is actually gay.