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FTC: One Man Behind 117 Million Illegal Telemarketing Calls
How many telemarketing calls would it take to make a user want to just pull the phone out of the wall and communicate solely by email? Fewer than 100? For most of us, an answer of “117 million” might do. That's what happened with new reports of a verdict regarded as a “first-of-its-kind” verdict by the Federal Trade Commission (FTC (News - Alert)), as Forrest S. Baker III and three of his movie companies were found responsible for that massive number.
Baker's movie companies—Corporations for Character, L.C., Family Films of Utah, and Feature Films for Families, Inc—engaged in what the FTC called an array of “deceptive and unlawful” selling practices, of which the nine-figure number of telemarketing calls were just part of the package. The case against Baker and his organizations started back in 2011, and recently concluded as part of an eight-day trial where the Department of Justice (DOJ) brought in a slate of FTC witnesses that detailed a calling campaign focused on drawing attention to certain movie releases, including the 2009 release of the film The Velveteen Rabbit.
Reports note that the telemarketers told call targets that “all of the proceeds” from the films would go to completing a viewing list of recommended titles, but 93 percent of sales would instead be going to Feature Films for Families instead. No effort was made to avoid callers on the federal Do Not Call list, with over 2.5 million calls ultimately going to numbers on this list. Witnesses further noted that, even after notifying callers that the calls were unwanted, the calls continued to arrive.
With around 117 million calls involved in the proceedings, and a maximum fine reportedly as high as $16,000 per violation, it's possible that the judgment involved in this case could clear the trillion-dollar range. Considering that that's higher than the gross domestic product of some entire countries, it's likely that the judgment won't be anywhere near maximum so as to have some hope of collecting it.
The numbers suggest either a staggering ignorance of telemarketing law or a shocking level of hubris in believing that the laws would never actually impact the organizations in question. An organization that makes 117 million calls, even in the space of five years over three organizations, is making an awe-inspiring number of raw calls every day. This case underscores how important it is to stop and pay attention to laws when engaging in telemarketing. It's still a viable alternative to many common marketing tools, but with several laws around its use, it must be put to work carefully to avoid a case just like this.
A potential judgment of $1.9 trillion and 117 million illegal calls is a tough thing to live down. The penalties haven't yet been assessed, reports note, but even one percent of that top number will be a catastrophe for Baker, and an object lesson for everyone else turning to telemarketing.
Edited by Stefania Viscusi