Both the New Jersey and federal governments enforce strict consumer protection laws, particularly with regard to telemarketing and sales calls.  Under what circumstances can consumers report your business for an alleged violation of these laws?  What sort of fines and civil penalties could your company be facing for a Do Not Call violation?  New Jersey consumer fraud lawyer Steven Jayson explains the rules telemarketing businesses must comply with — and the consequences if they do not.

How to Avoid a “Do Not Call” Complaint Being Filed Against Your Business

There are five prerequisites for consumers who wish to file a “Do Not Call” complaint in the state of New Jersey.  As a New Jersey business owner, you should take a few moments to familiarize yourself with these criteria.  The better you understand the circumstances under which consumers can file a complaint, the better your company will be able to avoid engaging in potentially costly telemarketing practices.

Before a formal complaint may be filed with the New Jersey Division of Consumer Affairs, all of the following five conditions must be met:

• The consumer must have been living in New Jersey when you or your employee called him or her.

• The consumer must be able to provide your name or phone number in order to identify the caller and organization.

• Your or your employee must have placed to either a cell phone or a residential phone (i.e. a landline).  Calls which are placed to fax machines are not covered by the state’s Do Not Call laws, but may be reported to the Federal Communications Commission.  Calls which are placed between businesses are neither covered by New Jersey’s Do Not Call laws nor by the nationwide Do Not Call registry.

• You or your employee must have left a telemarketing message on the call recipient’s answering machine or voicemail.  Alternately, the consumer may complain that they were given a telemarketing message when you or your employee called.  Consumers cannot file a complaint under the state’s Do Not Call laws unless the call explicitly included a sales pitch.

• You or your employee must have been calling explicitly for the purpose of trying to make a sale. Do Not Call complaints do not extend to cover:
  • Calls placed to consumers who have signed written agreements.
  • Calls placed to existing customers.
  • Calls placed to established customers, or customers who have previously purchased services or products from your company.  However, be advised that you are prohibited from up-selling, or trying to sell the established customer a costlier service or product.
  • Calls placed on behalf of charities by third-party fundraising organizations.  However, if the consumer requests the charity to stop contacting him or her, then as the third party you must comply with the charity’s no-call list.

Keep in mind that New Jersey’s Do Not Call law — which is widely regarded as one of the stronger state-level consumer protection laws with regard to telemarketing — is further bolstered by the provisions of the national Do Not Call registry, which is operated and maintained by the Federal Trade Commission or FTC.

The FTC also enforces the TSR, or Telemarketing Sales Rule, which applies to “any plan, program or campaign to sell goods or services through interstate phone calls” — including sales calls placed by telemarketers.  Intrastate calls are covered by the national registry.

Additionally, it is important to note that tax-exempt organizations, such as 501(c) non-profit organizations, are not always considered exempt from the provisions of the national registry.

Consequences for Violations: Lawsuits and Civil Penalties

We’ve established the criteria for consumer complaints — but why should your business be worried about the possibility of a such a complaint?  What sort of penalties and consequences could you face?

There are a variety of circumstances under which your business could be fined with a civil penalty of up to $16,000, per individual violation.  These fines can be particularly devastating for small business start-ups and fledgling organizations which have not yet established a budget for potential legal matters.  For a new company trying to stretch minimal funds, a single $16,000 fine could spell budgetary disaster.  Your organization could be fined up to $16,000 if:

• You fail to purchase access to the Do Not Call registry, and accidentally call a registered member.

• You continue to call a consumer as a third-party fundraiser working on behalf of a charity organization, despite that consumer’s request to be placed on a no-call list.

• You call an established customer (not an existing customer) of your business:
  • Despite the consumer’s request to be placed on a no-call list.
  • Even though more than 18 months have passed since your last contact with the consumer, including purchases, payments, and deliveries.

The FTC is vigilant and aggressive when it comes to enforcing compliance with federal Do Not Call regulations, reporting 105 separate enforcement actions, including a record-setting Do Not Call settlement with Sprint at $7.5 million.  

If you operate a telemarketing business and are concerned about compliance issues or commercial litigation stemming from consumer complaints, the experienced business law attorneys of The Jayson Law Group LLC can help.  To arrange for a private legal consultation, call our law offices at (908) 258-0621 today.