Opinion ID: 2724252
Heading Depth: 4
Heading Rank: 2

Heading: Violations of the TSR

Text: Like the FTC Act, the TSR targets deceptive messaging by prohibiting sellers or telemarketers from using “deceptive telemarketing acts or practices.” 16 C.F.R. § 310.3. “Identical principles of deception from Section 5 of the FTC Act apply to the TSR, and a violation of the TSR amounts to both a deceptive act or practice and a violation of the FTC Act.” F.T.C. v. Wash. Data Res., 856 F. Supp. 2d 1247, 1273 (M.D. Fla. 2012). See also F.T.C. v. Stefanchik, 559 F.3d 924, 929–30 (9th Cir. 2009). The FTC asserted and the district court agreed that Defendants violated the TSR by (1) misrepresenting the total cost of their services, in violation of 16 C.F.R. § 310.3(a)(2)(i); (2) misrepresenting material aspects of their services, in violation of § 310.3(a)(2)(iii); (3) requesting and receiving fees before negotiating or settling the terms of consumers’ debts, in violation of § 310.4(a)(5)(i); and (4) calling numbers on the National Do Not Call Registry, in violation of § 310.4(b)(1)(iii)(B). Sufficient evidence in the record establishes that Defendants’ telemarketers made each of the above-mentioned material misrepresentations, leading consumers to purchase their services. Additionally, numerous declarations in the record establish that Defendants’ telemarketers called consumers whose numbers were listed on the National Do Not Call Registry. For example, declarant Jeffrey Berry stated that since January 15, 2006, he has been registered on the FTC’s Do Not Call Registry. Despite that fact, he was contacted by a First United representative in March 2012, who sought personal information from him, including his Social Security number. Another declarant, Vivian Allen, indicated that her number was registered on the Do Not Call Registry at the time she received her first phone call from a New Life representative. Neither of these individuals had prior existing business relationships with Defendants. The only argument asserted by Defendants regarding their violations of the TSR is that the contracts signed by consumers correctly set forth the fees to be paid and services to be rendered by Defendants. As explained above, however, the net impression of the telemarketers’ representations to consumers was deceptive and likely to mislead consumers acting reasonably under the circumstances. No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 26