PDF: Dish Network Fine
Satellite TV provider Dish Network will have to shell out $280 million to settle charges that it violated federal law when its representatives called millions of consumers to get them to sign up for Dish Network TV services.
The Federal Trade Commission and U.S. Department of Justice announced the action Wednesday, in a stinging rebuke of the Colorado-based company’s sales practices that closed an 8-year-old case. A U.S. District Court in Illinois didn’t mince words in its statement, in which it accused the company of creating a situation in which “unscrupulous sales persons used illegal practices to sell Dish Network programming any way they could.”
The agencies were joined in the lawsuit by the states of California, Illinois, North Carolina and Ohio, which will share in $112 million to address alleged violations in their respective states. In addition, the federal government will pocket $168 million from the settlement, the largest civil penalty ever obtained for violations of the FTC Act. Dish Network has a reported 13.5 million subscribers nationwide.
“The National Do Not Call Registry is a popular federal program for the public to reduce the number of unwanted sales calls,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “This case demonstrates the Department of Justice’s commitment to smart enforcement of consumer protection laws and sends a clear message to businesses that they must comply with the Do Not Call rules.”
Specifically, the court found that “millions” of Dish Network-authorized calls violated the Telemarketing Sales Rule, The Telephone Consumer Protection Act and state law. (Sixty-six million of those calls on their own were found to be violations of the Telemarketing Sales Rule.) The complaint alleged in reference to the Telemarketing Sales Rule that Dish “initiated, or caused a telemarketer to initiate, outbound telephone calls to phone numbers on the DNC Registry, in violation of the TSR, violated the TSR’s prohibition on abandoned calls, and assisted and facilitated telemarketers when it knew, or consciously avoided knowing, that the telemarketer was engaged in violations of the law.”
“The outcome of this case shows companies will pay a hefty price for violating consumers’ privacy with unwanted calls,” said Maureen K. Ohlhausen, acting FTC chairman. “This is a great result for consumers, and I am grateful to FTC staff for their years of tenacious work investigating and developing this case. We and our DOJ and state partners will continue to bring enforcement actions against Do Not Call violators.”
The court’s ruling contained four provisions, which included requiring Dish and its primary retailers to ensure they are fully compliant with the “Safe Harbor” provisions of the Telemarketing Sales Rule (which protect you and me from certain calling practices); requiring Dish to hire a telemarketing-compliance expert to ensure compliance; requiring Dish to allow unannounced inspections of calling facilities or records; and prohibiting Dish from violating the Telemarketing Sales Rule in the future.
Dish has gone on record as disagreeing with the verdict and said it plans to appeal. “The penalties awarded in this case radically and unjustly exceed, by orders of magnitude, those found in the settlements in similar actions,” a representative noted in a statement. “Dish has long taken its compliance with telemarketing laws seriously, has and will continue to maintain rigorous telemarketing compliance policies and procedures, and has topped multiple independent customer service surveys along the way.”
It wasn’t clear how much, if any, of the settlement money will be returned to affected consumers.