AZ Telemarketer Claims Confusion Over FCC Notice of Apparent Liability

The Federal Communications Commission proposed that Dynasty Mortgage LLC, of Phoenix, forfeit $770,000 for alleged violations of the federal do-not-call list. Dynasty management is contesting the forfeiture request, saying that it has followed the FCC rules that govern telemarketing.

“The vagueness of the laws in place now do not give us a map to follow other than ‘do not call people on the do-not-call list,” said Curtis White, Dynasty’s president and CEO.

White continued, “Somehow, some way, by accident or the customer not registering on time or within the 31-day allotment, [something happened that triggered complaints to the FCC].”

The FCC’s forfeiture request contained a list of the 70 alleged Telemarketing Sales Rule violations. Only three of them – either to a person or multiple persons with the same name — had been dialed after Jan. 1.

Part of the confusion may stem from a change in rules regarding the do-not-call list. Prior to Jan. 1, telemarketers were permitted to use a version of the registry that was no more than three months old. But at the start of this year, that rule was changed to require telemarketers to use a version no more than 31 days old.

However, some of the charges made against Dynasty predate the rule change. According to the FCC papers, Dynasty claimed that in on Jan. 8, 2004, after the FCC had contacted Dynasty about alleged violations, a compliance expert who identified himself as Randall Sage called the FCC on the home financing firm’s behalf and said that since Dynasty was “a government-regulated business,” it was exempt from federal do-not-call rules.

The FCC representative told Sage that there was no such exemption, and requested that Sage issue a formal written response to the charges, but did not hear back from Dynasty, the papers allege. When an FCC official attempted to contact Sage, she was told that Sage had been fired because he had provided Dynasty with incorrect information regarding compliance, according to the papers.

Asked about Sage, White said, “Needless to say he was stealing all the money we were giving to him. He spent about $450,000 of our money.” Sage had collected both fees and expense money that was supposed to facilitate Dynasty’s efforts to become a national lender and federally chartered bank.

Sage, according to White, has been in jail for a year, and has three more years to go on his sentence.

An individual named Randall Sage was sentenced to prison for fraud in late October 2003, according to court filings. It is not certain whether this individual is the same Randall Sage Dynasty had hired.

On Feb. 20, 2004, the FCC received a letter from White stating that the company had subscribed to the federal do-not-call registry, and had implemented a company-specific do-not-call list for consumers not on the federal list, according to the FCC papers.

But the complaints against Dynasty kept arriving, according to the FCC. On July 6, the FCC sent a letter to Dynasty requesting information about a series of calls, 45 of which were filed after the Feb. 20 letter. On July 28, Dynasty responded by asserting that its business practices were consistent with safe harbor standards that allow a certain level of mistakes, provided the telemarketer otherwise adheres to policies and practices designed to minimize the number of erroneous calls made.

But given the confusion between Dynasty and the FCC, the Commission claimed that it did not qualify for safe harbor, as Dynasty did not demonstrate that written procedures had been drafted and implemented.

This was despite Dynasty asserting that its list broker uses Dynasty’s do-not-call subscription number to vet its leads. Furthermore, as part of its July 28 response Dynasty submitted telemarketing scripts that contain specific responses to consumers indicating they are on the federal do-not-call list.

Asked about the list brokers his firm used, White said that his director of marketing was responsible for arranging the list rentals, and that while he was not sure of their names, several of them were based in Florida.

According to the FCC papers, Dynasty’s telemarketing scripts do not constitute an adequate plan for compliance, and Dynasty did not substantiate its other efforts to train its staff in compliance to the FCC’s satisfaction. Furthermore, the papers allege that Dynasty’s subscription number was used only twice during the past 12 months to access the registry: Once in March 2004, and again on Jan. 6, 2005.

“That is not accurate at all,” White said. “We have got some markets, like Nevada, where we have used it only twice.”

“We will show that our systems are in place, and that we are following all the guidelines,” White continued.

Dynasty, which has 30 days to respond to the FCC’s current notice, has already drafted a response, which is being reviewed by the Phoenix-based marketer’s legal council. “We will take it as high as we have to take it,” White said.

Adding to White’s aggravation is the fact that his firm purchased a new auto-dialer at the start of the year, one that was specifically programmed to block numbers added to the do-not-call list outside of the 31-day window.

Even with the best of systems in place, White feared that the amended Telephone Sales Rules are so stringent that there is little room for error.

“We call 2 million records a year,” he said. “[The new rules require] a less than 1% failure rate, and that’s very hard to abide by.”

White acknowledges the value of respecting the do-not-call list, even beyond avoiding any potential fines.

“We in no way, shape or form want to call people who don’t want to be called, because they won’t do business with us,” he said. “I would love to sit down with the FCC or another organization that can tell me ‘this is how you do it so as not to get one single complaint.’”