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Teachable Moment: Telemarketing Suit Against Carnival Cruise Lines

April 10, 2015
By Mae Kowalke - Telemarketing Software Contributor

Laws exist for when ethics fail, at least in theory. Caribbean Cruise Lines (CCL (News - Alert)) and its partners found this out the hard way when someone in their marketing department thought they could sneak in telemarketing efforts under the guise of political survey calls, which are exempt from do not call and automated calling rules.

The Federal Trade Commission (FTC (News - Alert)) and a dozen state attorneys general sued CCL and several of its partners recently for offering vacation “add-ons” after political calls, and CCL recently settled in the case in agreeing to pay $500,000 of a $7.2 million penalty.

CCL and its partners had run an extensive calling campaign that included between 12 and 15 million calls per day for approximately ten months. These calls offered a political survey, but they also invited consumers to “press one” to receive a “free” two-day cruise to the Bahamas. When consumers opted to learn more, a live telemarketer working on behalf of CCL then came on the line and offered pre-cruise hotels, excursions and other value packages.

The FTC prohibits automated calls from telemarketers except with prior express consent, which this calling campaign did not have. CCL and its partners apparently thought they could get around this regulation by hiding the telemarketing effort within a purported political call, but clearly this was a telemarketing effort in practice. While the calls may have started as political calls, when they went for the upsell these calls became telemarketing efforts, according to the FCC (News - Alert).

There are several takeaways from this lawsuit, the most important of which is to let ethics guide marketing efforts. It is hard to imagine that these calls were anything but an attempt to bypass the regulations, and CCL and its partners could have avoided the legal trouble had they actually kept consumer rights in mind.

Also, this case highlights that companies are not actually required to place the calls to fall under FTC jurisdiction. A company that pays another company or directs people to make such calls also can fall afoul with the FTC regulations for automated calls.

The FTC complaint charged a group of five companies and their individual owner with assisting and facilitating the illegal cruise calls, showing that partners also can be held liable.

Further, this suit shows that both the FTC and individual states aggressively prosecute offenders, so these are not toothless regulations that are poorly enforced.

Automated calling is a powerful tool in the marketing and sales toolbox, but it must be conducted responsibly. This means following all applicable rules, something Carnival failed to put into practice.