Legal Disclaimer: Some documents have been scanned and may contain minor errors. The above information has not been proven to be true and accurate in a court of law. The statements are allegations only. C.A.T.S. suggests that you attempt for yourself to get a copy of Circuit City's "Do Not Call Policy" and form your own conclusions. Good hunting!!

C.A.T.S. Founder files lawsuit against Circuit City

Background

In early 1999, California State Senator Liz Figueroa (D-Freemont) proposed a bill that would create a Statewide "Do-Not-Call" list. During the legislative process, the only retail store to file an objection to the bill was Circuit City Stores Inc.

Circuit City's objection was based, in part, on the fact that there was already a federal law (the Telephone Consumer Protection Act or TCPA) in place to cover these issues. Since Circuit City was aware of the law, we at C.A.T.S. decided to test the company for compliance with the federal law.

The TCPA requires every company that does "telephone solicitations" to maintain a "Do-Not-Call" list and have a written "Do Not Call" policy "available upon demand".

On May 22 and 23, 1999, C.A.T.S president Robert Arkow contacted ten Circuit City stores, and asked each store two questions:

Can you put my telephone number on Circuit City's "Do Not Call" list? (As required by law)

Can you give me a copy of Circuit City's written "Do Not Call" policy? (As required by law)

Some stores were contacted by telephone; others were contacted by Arkow personally. In all cases, Arkow spoke to a manager or supervisor. NOT ONE STORE COULD COMPLY WITH HIS REQUEST! Arkow even gave the contacts his phone number, and asked that someone contact him regarding this issue. No one ever called back!

When Arkow made his request to the Glendale, California Circuit City store, he was told by store operations manager Cathy Garcia that if he did not leave, she would have the Glendale Police Department remove him from the store.

This prompted us to send the following letter:

On May 26, we received the following response:

We waited to be contacted. One month later, we still had not received a reply or a copy of their "Do Not Call" policy. On June 23, 1999, I informed the local Circuit City store manager in Valencia, California that I was going to file a lawsuit against his company in two days.

To my surprise, Circuit City faxed me the following letter on June 24, 1999:

 

We were curious as to why it took Circuit City more than four weeks to mail its "Do Not Call" policy, so we contacted Mr. Rockwell, the senior corporate counsel for Circuit City. After playing 'phone tag' for several days, we were able to reach him.

He claimed that our fax to the Glendale store "took a week" to reach his desk. But the records show that the fax, which was sent on May 23, was in his office on May 26 (see the letter above). He then conducted a "three week investigation" to "obtain the facts and get both sides of the story." Funny, if he wanted "both sides of the story" during a so-called "three week investigation", why didn't he contact us for the information? We found his position to be lacking. Mr. Rockwell assured us that Circuit City "never had a problem with this sort of thing."

We decided at this point to defer legal action and re-test Circuit City in a few weeks to see if they would bring themselves into compliance.

On June 27, 1999, we posted the following "Quote Of The Week" on our web site:

 Soon after we posted this "Quote Of The Week" we received an e-mail from a consumer that did not want us to publish his name.

In his letter he stated that Circuit City's subsidiary, First North American National Bank ("FNANB") called him to sell him a credit card for Circuit City. This may not sound too out of the ordinary, but the closest Circuit City from where he lives is in Minneapolis (over 400 miles away). He asked the caller for an address, phone number, etc. where FNANB could be contacted, then asked to be placed on their do-not-call list. The caller gave him the name "Corey Williams" and a bogus address where FNANB could be contacted in violation of TCPA. In his letter he also stated that the caller yelled at him for wasting HIS time, then hung up.

He then went on a quest for a copy of their do-not-call policy. He kept getting correspondence from employees of FNANB who used fake names (he would call the number they provided and no one knew of anyone who goes by that name). Since they could not come up with a policy, he sent letters to the attorney general's office in about every state they do business in, as well as the FTC and FCC.

In his letter, this consumer tells us that FNANB tried to ignore letters from these agencies for quite some time, until some of these agencies started sending them certified mail. He was then contacted by the Associate General Consul for FNANB. The attorney tried to convince him and the FTC that his firm had sent two letters to him that just happened to get lost in the mail.

FNANB's attorney claimed that it was not the fault of FNANB or Circuit City because Harris Select placed the telephone solicitation on their behalf. Further, FNANB's attorney did not feel he was entitled to a copy of their policy even though FNANB and Circuit City do their own outbound telemarketing.

He then threatened to sue if he did not receive a copy of their policy and reimbursement for his expenses getting it and use the statements they placed in writing in an action against FNANB.

Shortly afterward (almost six months after he started his quest) he did finally received a copy of their policy and $100 if he would leave THEM alone.

NOTE: We have paraphrased the contents of his letter due to the strong language it contains. This consumer was obviously upset, and considering the circumstances, he had a right to be upset.

This conduct appears in direct conflict with Mr. Rockwell's statement that Circuit City "never had a problem with this sort of thing," so again we contacted Mr. Rockwell. After a few days of phone tag, we confronted him with the above letter (which we also e-mailed to him). He claimed to be "unaware" of this incident and also claimed that Circuit City and FNANB are "two separate entities." But a check of Circuit City's web site (http://www.circuitcity.com/help/support-fnanb.htm) shows something quite different:

In 1990, Circuit City Stores, Inc. (Circuit City) established a wholly owned credit card bank subsidiary, First North American National Bank® (FNANB). FNANB was established in order to issue the Circuit City Credit Card. This credit program enhances customer service with increased credit availability and on-line links between the stores and the bank.

This hardly seems like "two separate entities", so we advised Mr. Rockwell that we did not appreciate the lying that was going on and that we would file a lawsuit.

It is interesting to note that Ross Scovotti, the former editor of Teleprofessional Magazine, referred to the legal requirements of providing a "Do Not Call" policy upon demand as a "simple mechanical procedure that is literally a no-brainer." Should it take Circuit City's Senior Corporate Counsel three weeks to do that? We think not!!!

The Legal Basis of the Lawsuit

Our position is based on the Telephone Consumer Protection Act, various judges' rulings regarding the act, and rulings from the FCC.

Of particular interest are two rulings by Geraldine A. Matise, chief of the Network Services Division, Common Carrier Bureau, of the Federal Communications Commission (FCC). In one ruling, she states:

"Thus, even where a company does not solicit a particular consumer, we find nothing in our rules that limits a company's duty to disclose its policy if it does engage in telephone solicitation. Additionally, we believe that failure to provide a do-not-call policy is a prohibited act under the TCPA."

As one can see, you can request a copy of a company's written "Do Not Call" policy even if you do not receive a call. And failure to provide it is a violation of the law.

But how long should it take? The law states that it must be "available upon demand". What exactly does that mean? In another ruling, Ms. Matise gives us a partial answer:

Although the term "available upon demand" is not defined in statutory language or legislative history, section 64.1200(d)(2)(i) establishes that a telemarketing company or entity must make a copy of its written do-not-call policy available to consumers in a reasonable amount of time following the consumer's request.

We note that it would be difficult to establish a rule to identify and proscribe the various types of conduct which might violate the implied standard of reasonableness found within our rules. The reasonableness of a company's procedures for making written copies of its do-not-call policy "available upon demand" requires an analysis of all facts and circumstances in a particular case. This type of proceeding is best handled either by a court or within the Commission's complaint process, where each side has the opportunity to present its case. You can file a complaint with the Common Carrier Bureau, Consumer Complaints Division, following the guidelines included in the enclosed brochure, or you may bring a civil action in the appropriate state or federal court.

In Arkow v. Bank of America, the judge stated:

Senior Vice President and District Manager Ron Nemitz testified that the demand for a copy of the policy waited on his desk for him to review the policy prior to its release. I can find no authority for the delay of the bank in turning over the policy in response to a demand.

For the record, Mr. Nemitz told the judge that the policy was at his desk for three weeks while he "reviewed" it. Mr. Rockwell, of Circuit City, claimed that he was conducting a "three week investigation". Similarly, Mr. Rockwell could have sent, faxed or e-mailed Circuit City's policy before he conducted his so-called "three week investigation", but chose not to.

Our argument to the court is simple: Given the fact that Circuit City Stores was well aware of the law, as evidenced by their comments to the State Legislature and the fact that they've had problems in the past with this issue, we feel that waiting over four weeks for a simple, one-page document was not reasonable, and thus Circuit City is in violation of the law.

Additionally, Circuit City has failed to maintain a "Do Not Call" list. Ten requests (to ten different store managers or supervisors) to be put on Circuit City's Do Not Call" list have gone unheeded. In fact, as late as mid July 1999, we have not received confirmation that Robert Arkow is on the list.

Each violation carries a $500.00 penalty. As we continue to do more discovery, we are considering amending the complaint to provide punitive damages.

The case was heard on August 12, 1999 in Small Claims Court, Judge pro-tem Leo Rich presiding, in Glendale, California. Judge Rich was not even sure if the small claims court was the proper place to hear a case based on federal law. After we convinced him that the court was the proper place, he seemed to dwell on damages as opposed to violation.

The judge finally ruled that a five-week wait to receive a "Do Not Call" policy was "reasonable." We then asked the judge if eight weeks was "reasonable." He said eight weeks was "reasonable." We then asked him if a year was "reasonable." He replied that under some conditions, a year might be "reasonable."

We do not fault the judge for making the decision. The TCPA is a horrible law that causes confusion even amongst judges. Judge Reape ruled exactly the opposite, saying that five weeks was unreasonable.

What it boils down to is this: much stronger legislation is needed. Circuit City marched into Sacramento to oppose new legislation; but in reality, they demonstrated that the current legislation is confusing and sadly lacking. What is needed is legislation that clearly defines the responsibilities of both telemarketer and customer. To this end, we will be proposing a "TCPA" style bill to Senator Figueroa which will call for specific time limits and exact standards. As it stands now in California, consumers have, in essence, "crapshoot justice" when it comes to enforcement of the TCPA.

Should Circuit City choose to respond to this issue, we will post their response. We feel that by publishing both sides of an issue, we will enable consumers to make better choices when deciding who they'll do business with.

Legal Disclaimer: Some documents have been scanned and may contain minor errors. The above information has not been proven to be true and accurate in a court of law. The statements are allegations only. C.A.T.S. suggests that you attempt for yourself to get a copy of Circuit City's "Do Not Call Policy" and form your own conclusions. Good hunting!!