FTC Settles Complaint Against Debt Collection Companies for Prerecorded Calls

On September 11, the FTC settled a complaint it had previously filed against Pro Credit Group and several other companies and individuals in the debt collection industry. The complaint, submitted in March 2012, was filed under the Federal Trade Commission Act and the Telemarketing and Consumer Fraud and Abuse Prevention Act and alleged that the defendants violated the Telemarketing Act when they failed to obtain prior written consent from consumers before contacting them via prerecorded messages. The complaint also alleged that the defendants defrauded consumers when they told consumers (via the prerecorded messages) that they were delinquent on a payday loan or another debt, which the consumers did not actually owe. In numerous instances, the callers possessed the consumer's personal information, including their address and social security number. The settlement terms ban the defendants from engaging or participating in any future telemarketing and imposed a $67.5 judgment.

Tip: If contacting clients or customers using automated calls for marketing purposes, remember that you need prior express permission. Express permission must include the recipient's phone number and signature and must be obtained after a clear and conspicuous disclosure of the purpose of the agreement. Additionally, the prerecorded message must promptly disclose the identity of the seller, that the purpose of the call is to sell goods or services, and the nature of the goods or services.  

This tip has been created for information and planning purposes. They are not intended to be, nor should they be substituted for, legal advice, which turns on specific facts.