Satellite television operator DirecTV Group Inc. agreed to pay $5.3 million to settle charges it repeatedly violated rules against telemarketing to consumers whose names were on a national do-not-call registry, the Federal Trade Commission announced yesterday.
The settlement, which must be approved by a judge, is nearly 10 times larger than the biggest previous penalty under the rules, which took effect in October 2003.
Also settling were two telemarketing firms -- and their top officers -- used by DirecTV for campaigns to generate new customers. Three other firms remain subject to a complaint filed by the Justice Department in connection with the case.
The agency said it had logged numerous complaints against DirecTV, which is in a pitched battle with both its rival satellite provider, Dish Network, and cable companies for new customers. Like Dish, DirecTV sells its service and equipment directly and through retailers.
FTC officials said that in addition to the size of the penalty, the settlement is notable for holding a product or service provider responsible for the actions of marketers or retailers working on its behalf.
"This multimillion-dollar penalty drives home a simple point: Sellers are on the hook for calls placed on their behalf," FTC Chairwoman Deborah Platt Majoras said in a statement. "The Do Not Call Rule applies to all players in the marketing chain, including retailers and their telemarketers."
DirecTV said in a statement that many of the offending calls were made by independent retailers of its service, and that it has severed relationships with them.
The nation's largest satellite provider also said it would more closely monitor marketing firms it hires.
"DirecTV wholly supports the national Do-Not-Call Registry and our agreement with the FTC reflects our commitment to prevent unwanted and unlawful telemarketing calls to existing and potential DirecTV customers," the statement said.
According to the complaint, DirecTV helped one telemarketer, Global Satellite LLC, even though DirecTV knew that the marketer was violating the do-not-call rules.
As part of the case, Communication Concepts LLC of Tennessee agreed to pay $25,000 and North Carolina-based American Communications of the Triad Inc. will pay $50,000.
Much larger judgments were entered against both firms and their top officers, but they were set aside because the firms cannot pay them.
American Communications was the subject of similar action by the North Carolina attorney general's office.
As of last month, the FTC's do-not-call list had 110.4 million residential and mobile telephone numbers registered.
Registration is free, and the FTC also has been cracking down on scam artists who offer to register people for a fee.
Separately, DirecTV agreed on Monday to pay $5 million to settle consumer complaints filed in 22 states about fees and other provisions contained in the fine print of service contracts. The company admitted no wrongdoing in the settlement, and the payment was not considered a fine. DirecTV is a publicly traded company that is 34 percent owned by News Corp.'s Fox Entertainment Group.
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- 188 Consumerism & Commercialism