Dish Network potentially on the hook for $920 billion in fines

Published: Feb 01, 2015 17:00pm EST
By Lance Rinker, Managing Editor for Konsume Politics

Please Note: This article was updated Feb 01, 2015 @ 05:12pm EST

 

The fine for a single violation of the Telemarketing Sales Rule (TSR) can be up to a whopping $16,000. Dish Network has been accused of violating the TSR and Do Not Call (DNC) registry a catastrophic 57.5 million times by the Department of Justice, on behalf of the Federal Trade Commission (FTC).

Simple multiplication tells us that Dish Network could technically be facing a $920 billion fine, though common sense tells us the company will settle for far, far less.

To put that figure into perspective, the combined profit of the top 1,000 banks in the entire world was $920 billion in 2013. Social programs run by the United States, not including Social Security or Medicare, totaled nearly $927 billion in 2010. Looking into the near future, the Middle East and North Africa military spending are expected to reach $920 billion by 2020, according to a report published by IHS Global Insight.

That $920 billion figure is also larger than the GDP’s of 175 different countries throughout the world, and greater than the 109 poorest countries combined.

The 15 countries with national GDP’s valued higher than $920 billion are:

Source: the CIA World Factbook (2003–2013)

Rank     Country/Region                GDP (Millions of US$)               Year

 

 European Union

16,950,000

2013

1

 United States

16,720,000

2013

2

 China

9,330,000

2013

3

 Japan

5,007,000

2013

4

 Germany

3,593,000

2013

5

 France

2,739,000

2013

6

 United Kingdom

2,490,000

2013

7

 Brazil

2,190,000

2013

8

 Russia

2,113,000

2013

9

 Italy

2,068,000

2013

10

 Canada

1,825,000

2013

11

 India

1,670,000

2013

12

 Australia

1,488,000

2013

13

 Spain

1,356,000

2013

14

 Mexico

1,327,000

2013

15

 South Korea

1,198,000

2013

 

On December 12, 2014, the U.S. District Court for the Central District of Illinois found Dish Network liable for those tens of millions of calls that violated the FTC’s TSR, including Do Not Call, entity-specific, and abandoned-call violations. That opinion represents a partial summary judgment win in the case the Department of Justice filed on behalf of the FTC, and four state co-plaintiffs (California, Illinois, Ohio, and North Carolina), against Dish in March 2009.

In the ruling, Judge Sue Myerscough, found Dish liable for 4,094,099 calls it or its vendors made to number on the DNC registry, and for 2,730,842 calls its retailers made to numbers on the DNC registry. Additionally, the ruling stated Dish is liable for 49,738,073 abandoned calls that Dish and three of its retailers made. This is in violation of the “abandoned-call” provision of TSR, which stipulates telemarketers are required to connect their call to a sales representative within two seconds of the consumer’s greeting.

According to the FTC, abandoned calls are generally the result from the use of automatic dialing equipment that sometimes reaches more numbers than there are available sales representatives. The rule stipulates that when a telemarketer does not have a representative standing by, a recorded message must play to let you know who’s calling and the number they are calling from.

The law expressly prohibits a recorded sales pitch in a cold call. The law also stipulates a telemarketer or auto-dialing program must give you enough time to answer the phone, so a telemarketer may not hang up on an unanswered call before 15 seconds or four rings.  

The TSR itself prohibits deceptive and abusive telemarketing acts and practices to protect consumers. Specific standards of conduct have been put in place for telemarketing calls:

  1. Calling times are restricted to the hours between 8 a.m. and 9 p.m.
  2. Telemarketers must promptly tell you the identity of the seller or charitable organization and that the call is a sales call or a charitable solicitation.
  3. Telemarketers must disclose all material information about the goods or services they are offering and the terms of the sale. They are prohibited from lying about any terms of their offer.

A representative with the FTC said some people who were called had specifically asked Dish to stop contacting them, yet still received more calls.

Why this matters is because telemarketers are required by law to search the DNC registry every 31 days and avoid calling any phone numbers that are on the registry. Telephone numbers on the registry will only be removed when they are disconnected and reassigned, or when the consumer chooses to remove a number from the registry.

It wasn’t too long ago, the summer of 2009, that Dish Network agreed to pay nearly $6 million plus restitution in a settlement with 46 states’ attorney general as a result of allegations of deceptive consumer marketing and a lack of disclosure about costs and service limitations. The states banded together and went after Dish Network after tens-of-thousands of consumer complaints were filed against the company, to the Better Business Bureau alone, over a three-year period leading up to the charges being filed.  

Nearly 10 years ago, December 2005, a similar case and slew of charges were brought against DirectTV for its involvement in violating the same law and ultimately settled for a, then, record amount of $5.35 million. The FTC’s argument against DirectTV stated that thousands of consumers had filed complaints against the company for violating the rules of the Do Not Call Registry.

While the exact number of violations committed by DirectTV is unknown, the message sent by the FTC and Federal Government made it clear that violations of the TSR and DNC registry by any company would not be tolerated.

In addition to the $5.35 million settlement for the charges the FTC levied against DirectTV, the company also settled a 22-state investigation into its marketing and advertising practices with former New York Attorney General Eliot Spitzer for $5 million.

As a result of that settlement, DirectTV agreed to make sweeping reforms in its advertising practices and to clearly inform customers of all contractual language in an agreement pertaining to service, service charges and fees, as well as cancellation penalties.

The 22 states involved in the suit against DirectTV were Delaware, Florida, Georgia, Idaho, Illinois, Kansas, Maryland, Massachusetts, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Vermont and West Virginia.

A trial for the complaints and range of charges against Dish is set for July in Illinois. Dish released a statement saying the company will challenge the ruling, though representatives for Dish Network declined to comment for this story.

Maybe Dish Network believed it could truly get away with violating telemarketing laws in place to protect consumers nearly 60 million times. Maybe executives with Dish Network believed that if the company were found out, the FTC or any other government agency would not discover the 57.5 million violations committed.

Now Dish Network has to deal with the fallout of the FTC citing them for the more than 57 million telemarketing violations, which included a hefty amount of Americans on the Do Not Call (DNC) list. 


 

Comments (1)



  • Anonymous   Feb 2, 2015 @ 11:41AM
    Your image verification is crap.

    Oh yeah, hang them, all officers and majority stockholders. -

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