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The �鶹��ý Trade Commission today announced a law enforcement crackdown on companies and individuals accused of violating the requirements of the National Do Not Call (DNC) Registry, resulting in six settlements collectively imposing nearly $7.7 million in civil penalties, along with an additional complaint that will be filed in federal district court.

The actions, brought by the Department of Justice (DOJ) on the FTC’s behalf, are against companies ranging from adjustable bed seller Craftmatic Industries, Inc. (Craftmatic) to alarm-monitoring provider ADT Security Services (ADT) and lender Ameriquest Mortgage Company (Ameriquest), and bring to 34 the number of cases filed by the FTC to enforce the DNC Rule, which was implemented in 2003. To date, consumers have put more than 145 million numbers on the Registry, indicating they do not want to receive calls from telemarketers at home.

“Consumers have made clear that they greatly value the Do Not Call Registry, and they must be able to depend on its privacy protection,” said FTC Chairman Deborah Platt Majoras. “By bringing enforcement actions, like those announced today, we will ensure that the small number of bad actors pay a price for not adhering to the law and respecting consumers’ privacy requests.”

Recognizing its importance to consumers, the Commission recently announced that it will not remove telephone numbers from the Registry, pending final Congressional or agency action regarding whether to make registration permanent.

The Complaints and Stipulated Orders

Each complaint and stipulated final order filed against the defendants named in the DNC enforcement sweep announced today is described below. In addition to the monetary relief, in
each case the FTC has obtained injunctive relief that will prohibit the defendants from engaging in similar Do Not Call violations in the future. Separately, the Commission is working with DOJ to file a federal district court complaint against Global Mortgage Funding.

Craftmatic. According to the FTC, Craftmatic and three of its subsidiaries worked with defendant Eric Krafstow to run sweepstakes promotions offering consumers who filled out an entry form the chance to win a prize – a Craftmatic bed. The sweepstakes form indicated that the consumers’ telephone number was their entry number as well. Using this information, Craftmatic allegedly placed tens of thousands of calls to consumers who entered the sweepstakes, even though the form did not indicate that by filling it out they would receive sales calls, and the company did not seek their express consent to call them. In addition, the Commission’s complaint charges Craftmatic with placing millions of abandoned calls to consumers. That is, the company did not connect consumers to a live representative within two seconds of when consumers said “hello,” leaving them to find only dead air upon answering. Finally, the FTC alleges Craftmatic ignored consumers’ requests to be placed on the company’s entity-specific do not call list. In settling the complaint, Craftmatic has agreed to pay a $4.4 million civil penalty – the second-largest ever for DNC-related violations.

ADT. The FTC charged ADT and two of its authorized dealers – Alarm King and Direct Security Services (DSS) – with violations similar to those alleged against DirecTV in 2005. ADT marketed its security systems directly to consumers and through authorized dealers, which used a variety of marketing techniques, including telemarketing. In telemarketing its services, ADT, Alarm King, and Direct Security Services each called consumers whose numbers were on the DNC Registry. While the authorized dealers used their own telemarketers, the FTC alleged that ADT is liable both for the sales calls it made, as well as those made by its dealers, to numbers on the Registry. In settling the separate complaints, ADT, Alarm King, and DSS have agreed to pay $2 million, $20,000, and $25,000, respectively.

Ameriquest. According to the complaint, Ameriquest’s telemarketers improperly called consumers on the Registry whose numbers had been obtained from third-party lead-generators. The lead generators enticed consumers to provide their contact information, including phone numbers, using Web sites that offered information on financial and other products. The FTC’s complaint states that because consumers whose numbers were on the lead lists were not reaching out to Ameriquest in particular, the company had not developed an “established business relationship” with them, making calls to registered numbers illegal. Ameriquest also allegedly also ignored consumers’ requests to be placed on its entity-specific do not call list.

In settling the charges, Ameriquest will pay a $1 million civil penalty and is required to ensure that any lead generators it uses disclose to consumers, before they provide their contact information, that they will receive a phone call, the maximum number of sellers who may contact them, and, if possible, the identity of any seller that might call them as a result of their inquiry.

Guardian Communications. The FTC charged Guardian, U.S. Voice Broadcasting, and their principal, Kevin Baker, with violating the Registry rules related to the use of pre-recorded
messages. Similar in theme to the case the Commission brought recently against The BroadcastTeam, the complaint alleges that Guardian “blasted” phone numbers with pre-recorded telemarketing pitches, immediately terminating calls when a live consumer answered, leaving “dead air”and giving them no opportunity to ask to be placed on the company’s entity-specific no-call list. The Commission also charged the Guardian defendants with failing to transmit accurate Caller ID information to consumers – instead transmitting the text “Cust Service,” “Services, Inc.,” “Card Services,” “DWC,” or “LTR” as the name of the caller – and placing calls on behalf of sellers that did not pay for access to the Registry. They will pay $150,000 to settle the FTC’s charges, with the remainder of the $7.8 million civil penalty judgment suspended based on their inability to pay.

Global Mortgage Funding. Acting on behalf of the FTC, the DOJ will pursue charges against Global Mortgage Funding and its officer, Damian Robert Kutzner, for making hundreds of thousands of calls to consumers on the DNC Registry in an attempt to sell financial products. The Commission’s complaint also charges the defendants with failing to transmit the required caller ID information, failing to pay the DNC Registry fees, and abandoning calls by failing to connect consumers to a representative within two seconds after they answered the phone.

The Commission votes authorizing the filing of complaints and stipulated final orders by the DOJ on the FTC’s behalf against Craftmatic; ADT and its authorized dealers Alarm King and Direct Security Services; Ameriquest; and Guardian Communications, U.S. Voice Blasting, and Kevin Baker were 5-0 each. The vote authorizing the filing of a complaint – to be pursued by DOJ – against defendants Global Mortgage Funding and Damian Robert Kutzner was 5-0.

DNC �鶹��ý History

Since the DNC Registry was established in 2003, the FTC and DOJ have filed 34 law enforcement actions against individuals and companies that allegedly have violated the Registry provisions. In total, the two agencies have collected more than $16 million in civil penalties – the largest of which was $5.3 million from satellite television provider DirectTV in 2005 – as well as $8 million for consumer restitution or disgorgement of ill-gotten gains. DNC enforcement actions are part of the Commission’s enforcement of the Telemarketing Sales Rule, under which the FTC has brought complaints and filed orders on behalf of consumers for more than 20 years.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has or is being violated, and it appears to the Commission that a proceeding is in the public interest. A complaint is not a finding or ruling that the defendants have actually violated the law.

NOTE: Stipulated final judgments are for settlement purposes only and do not constitute an admission by the defendants of a law violation. Stipulated judgments have the force of law when signed by the judge.

Copies of the Commission complaint and consent orders can be found as a link to this press release on the FTC’s Web site. The FTC works for the consumer to prevent fraudulent,
deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click: http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click .

(FTC File Nos. 042-3094, 042-3091, 042-3082, 052-3166, and 062-3107)

(Civ. Nos. 07-CV-4652; 07-CV-81051-Zloch; EDCV 07-1467-VAP(JCRx); 07-CV-1343; SACV 07-1304-CJC(MLGx); 07-CV-4070; and 8:07-cv-01275)