Rossen Reports

Telemarketer agrees to $3.4 million FTC penalty over unwanted calls

May 27, 2014 at 7:40 AM ET

Video: Two years after a Rossen Reports investigation of a giant telemarketing company accused of making millions of illegal calls, the FTC has ordered the company to pay a $3.4 million penalty. NBC national investigative correspondent Jeff Rossen reports.

It's the No. 1 complaint in emails to Rossen Reports: Telemarketers who call day after day, even after you've signed up for the National Do Not Call Registry.

Two years ago, Rossen Reports investigated one of the biggest offenders: VMS, a huge telemarketing company accused of making millions of illegal calls. Federal officials were watching the report, and the Federal Trade Commission opened a full-scale investigation into VMS. Now the FTC has ordered a $3.4 million penalty.

"Over a million customers were called who were on the Do Not Call list," FTC official Robert Anguizola said. "In addition to that, VMS employed lead generators who were placing millions of illegal robocalls in trying to assemble its customer list."

One of those customers was Jim Bigham, a stay-at-home dad who was getting calls almost daily, “They’re irritating,” he told Rossen Reports two years ago. “They just won’t stop calling.”

And even more outrageous, “we are on the Do Not Call list,” he said. “It’s not working very well.”

Another customer, Diana Mey of Wheeling, W.V., said VMS called her so many times that she sued them. Then what happened? They called her again, and she taped it.

“Why are you calling me?” she asked the VMS telemarketer on the recording. “I have a class action lawsuit pending against your company for these unwanted calls because my number’s on the National Do Not Call Registry. Can you explain that to me?”

“I’m not exactly sure how that works,” the telemarketer replied on the recording.

The FTC says complaints against telemarketers have been proliferating because of new technologies and cheaper calling rates. They say companies like VMS haven't been doing their due diligence in scrubbing their customer lists of people on the Do Not Call Registry.

In fact, consumer complaints are skyrocketing. In 2010, there were 1.6 million complaints against telemarketers. By 2011, complaints jumped to 2.2 million, and in 2013, 3.7 million.

In 2012, Rossen Reports went straight to the president of VMS, Jay Gotra, whose bright yellow Ferrari was parked out front of the company's Dallas offices with the license plate EARNED: “There are a lot of complaints about your company. People who are on the Do Not Call list keep getting called by your company and your telemarketers. They even tell your operators to stop calling, and yet they still call. How do you explain that?”

“I have no comment,” Gotra said.

“Do your telemarketers ever call people on the Do Not Call list?”

“Nope. I will not.”

“Doesn’t happen?”

“No, unless they opt in with an opt information that they provide to us that makes us by law, that says that says if you opt in (in) writing, we can call you.”

According to the settlement order, VMS neither admits nor denies the allegations. In a statement, the company told NBC News it has "always taken compliance seriously," that the recent settlement highlights their "commitment to getting things right for consumers." The company is now "permanently restrained" from calling anyone on the Do Not Call Registry, and is now required to report to the FTC the steps they are taking to comply with the law.

If VMS is found not to be in compliance, the FTC could initiate a new action or seek to hold them in contempt of the order just entered. They could also seek civil penalties at $16,000 per violation and seek additional injunctive and monetary relief.

"This is a victory for consumers," the FTC's Anguizola said. "VMS and other marketers have to make sure they're not calling people on the Do Not Call list. "They can't simply rely on the say-so of a vendor and just call people willy nilly."

The Do Not Call Registry is growing: There are now 223 million phone numbers on the list. It's very easy to sign up: It takes about 30 seconds. Sign up for the National Do Not Call Registry here.

Statement from VMS:

"VMS has always taken compliance seriously and our recent settlement with the FTC and accompanying order highlights our commitment to getting things right for consumers. As a growing and evolving company that employs over 250 team members, we’re committed to our communities and improving their safety one household at a time. The controversy over sales practices in the industry has been unfortunate but we look forward to putting them behind us.”

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