Firms to pay $56,000 to settle calling suit
Posted on Friday, January 25, 2008
Two out-of-state corporations have agreed to pay $ 56, 000 into the Arkansas Attorney General’s Consumer Education and Enforcement Fund to settle a lawsuit accusing them of telemarketing vacations to Arkansans on the national Do Not Call registry.
A consent agreement signed by assistant Arkansas attorney general Jean Block and Kelly McNulty, local counsel for Richard King, who owns Berkshire Getaways of Massachusetts and Data King Corp. of New York, was filed Wednesday in federal court in Little Rock.
U. S. District Judge James Moody signed the order Thursday, making it official.
The attorney general’s office, then led by Mike Beebe, the current governor, filed the lawsuit in November 2006. It alleged that since Jan. 1, 2005, Berkshire had placed more than 100, 000 telephone calls to Arkansas consumers, at least 500 of whom had listed their numbers on the national registry.
Each call to a number on the registry constituted a violation of state and federal consumer laws, the lawsuit charged.
It said at least 25 Arkansans had filed complaints with the Federal Trade Commission over the unauthorized contacts, which solicited memberships in timeshare resorts.
Under the settlement, King doesn’t admit that his businesses have done anything illegal or deceptive. Instead, the defendants are consenting “solely to voluntarily resolve their differences with [the state ] without the necessity of further litigation and to indicate their intent to ensure that their business practices will be in compliance with the law.”
“There were some issues with the Do Not Call registry, but I think we’ve gotten them all worked out,” McNulty, of Little Rock, said Wednesday.
Gabe Holmstrom, spokesman for Attorney General Dustin Mc-Daniel, said the defendants have indicated that no other state has pursued them in court.
“This office worked hard to get the Do Not Call registry passed,” Holmstrom said. “Most telemarketers comply, and that has led to a significant reduction in nuisance calls. We will continue to be vigilant, since we know how much this means to Arkansas consumers.”
The lawsuit alleged that the corporations violated the federal Telemarketing and Consumer Fraud and Abuse Prevention Act, the Telemarketing Sales Rule, the Arkansas Consumer Telephone Privacy Act and the Arkansas Deceptive Trade Practices Act.
King, the president and sole member of the board of directors of each corporation, agreed to an injunction requiring him and the businesses to comply with the federal and state laws or risk civil penalties of up to $ 11, 000 for each federal violation and up to $ 10, 000 for each state violation.
The defendants agreed to establish written procedures to comply with the laws; train all personnel accordingly; develop and maintain a list of telephone numbers they cannot contact; and develop and maintain a process to prevent any telemarketer from calling numbers on the list.
The defendants also must print a disclosure on all “lead slips” from which they obtain phone numbers, so that consumers who list their phone numbers and addresses on promotional materials will understand that they are agreeing to allow the businesses to contact them.
The settlement money is to be paid in installments of $ 3, 111 a month for 18 months, with fines of $ 50 to $ 200 per day accruing if any payments are late.
Also, King agreed to pay $ 100, 000 if the agreement is breached.
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