Dwindling new subscriber gains are not the only thing irking Charles Ergen’s Dish Network these days.
The satellite-TV service, which has seen its recent quarterly subscriber additions compress as its rival satellite-operator DirecTV has basked in the glow of impressive subscriber gains, is in hot water with Federal Trade Commission and four states’ attorneys general for allegedly having telemarketing representatives violate telemarketing sales laws, including the National Do Not Call Registry.
The suit against Dish Network was brought jointly by the Federal Trade Commission (FTC) and the attorneys general of California, Illinois, Ohio and North Carolina as co-plaintiffs.
“In addition to the TSR [Telemarketing Sales Regulations] violations alleged by the United States, the complaint includes allegations brought solely by the state Attorneys General. They include allegations that Dish Network violated the Telephone Consumer Protection Act (TCPA) and state law — either directly or indirectly as a result of third parties acting on its behalf — by calling numbers on the Do Not Call Registry and by placing telemarketing calls that deliver prerecorded messages to live consumers,” according to an FTC statement.
The FTC also said it has asked the Justice Department to file complaints against two of Dish Network’s authorized dealers — Vision Quest and New Edge Satellite — for violating the TSR by calling consumers whose numbers are on the registry.
For the same reasons, the Justice Department filed suit in the summer of 2008 against authorized Dish Network dealers: Planet Earth Satellite, d/b/a Teichert Marketing; and Star Satellite, d/b/a Tenaya Marketing.
The FTC said Dish Network representatives made thousands of calls to people on the national registry — the worst case the FTC said it has yet seen.
The FTC said it tried and failed to settle the case out of court, where the matter could have been put to bed out of the public spotlight.
The FTC said this was the first case of a national Do Not Call allegation that it has not be able to settle. Why?
Dish Network, which like its rival DirecTV has been scaling back the number of retailers it uses to sell its services, said some of its independent retailers are to blame.
According to a Dish Network statement: “We respectfully disagree with the allegations made today by the Federal Trade Commission and certain States that Dish Network has engaged in ‘do-not-call’ violations and that Dish Network should be held responsible for ‘do-not-call’ violations by independent retailers.
“An independent audit demonstrates that Dish Network is in compliance with ‘do-not-call’ laws, has proper controls in place, and is well within the safe-harbor provisions of the law. We also believe that the FTC is equating merely doing business with an independent retailer to ‘causing’ or ‘assisting and facilitating’ violations by that retailer, which creates a strict liability standard that does not exist in the law and was not intended by Congress. We look forward to resolving these differences of opinion through the judicial process.”
According to an Associated Press report, the FTC has addressed more than 40 cases against companies for violations of the Do Not Call Registry since the program began in 2003.
The biggest case to date — one that was settled for $5.3 million — was against DirecTV.