The music on this page is the "Russ
Smith Theme Song".
Reprinted from the
December 8, 1996 Fort
The Associated Press
By LESLIE GORNSTEIN
Russell Smith at
his home in Alexandria, Va.
Smith says he is $17,000 richer this year, all by listening
carefully when he answers his telephone.
The Alexandria, Va.,
computer scientist has been busy suing telephone marketers, those
uncanny creatures that always seem to call just as people are sitting
down to dinner.
regulations that have been on the books for years, Smith has
collected money by filing lawsuits in small claims courts over such
telemarketing no-nos as not properly identifying themselves or
failing to remove his name from their files.
People can reap anywhere
from pennies to $1,500 for each violation of U.S. telemarketing code
they suffer. And because each suit is relatively small, the targeted
companies often settle out of court to avoid paying attorneys' fees.
"They are not going
to ignore me. If they are going to ignore me, they are going to pay
me damages,'' Smith said.
get to spend $30,'' he said, referring to the filing fee in small
claims court. "They get to spend a couple thousand just to get
an attorney out there. Win or lose, they have already lost."
Smith isn't alone. A
consumer group called Private Citizen,
based in Naperville, Ill., says it has 13 members who have won a
collective $53,000 this year over telemarketing violations.
In Fort Worth-Dallas,
several companies have been accused of telemarketing violations,
including Dallas-based computer retailer CompUSA, J.C. Penney Co. of
Plano and Warrantech Direct, a telemarketing firm in Euless.
extended warranties for CompUSA and handles the telemarketing. In
small claims court last month in Virginia, Smith accused CompUSA and
Warrantech of failing to remove him from a telemarketing call list
and other violations. He is asking for $7,700; the case is pending.
Smith has also accused
J.C. Penney Insurance Group, a division of J.C. Penney, of
telemarketing violations and says he will sue "as soon as I get
J.C. Penney Insurance
Group says it obeys all regulations. Jack Schulik, a senior vice
president for the insurance group, said even small, $1,500 lawsuits
could add up to trouble if they multiply.
That's why the company
has developed written policies to prevent violations, he said.
"I wouldn't say that
is a huge amount of money,'' he said. "But if a huge amount of
people do this, it could be a huge amount of money.''
Officials with Warrantech
and CompUSA declined to comment directly on the case.
Randall San Antonio,
president of Warrantech Direct, said his company has not violated any
rules, and compared the claims by Smith to famous liability cases.
got clobbered for that sign, didn't they?"'
San Antonio said,
referring to the recent verdict that forced the airline to turn off
giant flight information signs along the entrance road at Dallas//Fort
Worth Airport. "And McDonald's got clobbered over the coffee.''
A CompUSA spokeswoman
said the company is aware of Smith's suit, but declined further comment.
Companies have little
reason to fight the suits, said Robert Schechter, a New York lawyer
who is familiar with telecommunications law.
"Think about what a
$500 case in small claims court would cost to put on a defense,'' he
said. "It is really just not worth it if you are suing for $500.''
Such lawsuits are
expected to increase in coming years as the telemarketing sector
continues to grow.
The telephone has already
outstripped the mailbox as the dominant medium for direct sales,
according to the Direct Marketing Association in New York. The DMA
expects total consumer telemarketing sales to double by 2001, to
$248.8 billion from $124.5 billion. The association maintains its own
"do-not-call'' list of 700,000 households, a spokesman said.
The Telephone Consumer
Protection Act, enacted in 1992, opened the door for suits like
Smith's. Regulators, including the Federal Communications Commission
and the Federal Trade Commission, soon followed with a pile of rules.
Telemarketers who fail to
supply the phone number or address of the company they represent may
be sued for $500 per violation.
Consumer requests to be
put on a telemarketer's "do-not-call'' list must be honored. If
that request is disobeyed twice in a 12-month period, the consumer
can sue for $500 per violation. If consumers can prove that the calls
were deliberate or spiteful, they may be able to collect triple
damages, or $1,500 per violation.
required to maintain a written policy on how to get on a
"do-not-call'' list. If the consumer requests the policy and
does not receive it, or if the telemarketer does not make the policy
available, each violation is worth $500, according to the regulations.
The rules have yet to see
serious challenges in court, and consumers have won thousands through
company settlements, Schechter said.
There are hitches. The
rules apply only to unsolicited calls. A company that has done
business with a consumer in the past can call that person for
follow-up sales under the pretext that the pitch is welcome. And
nonprofit and political fund-raising groups are exempt.
If a company can prove
that certain violations were accidental, it can escape a penalty. But
many companies would rather not rack up court costs to make that
point, Schechter says.
Consumers must also learn
how to tape the offending calls legally, a lesson that Robert
Bulmash, president of
Private Citizen, is happy to offer. Consumers should say that
they have an answering machine that won't shut off after the phone is
picked up, and ask if it is OK if the call is taped. Most
telemarketers will say that's fine, Bulmash says.
Private Citizen advises
consumers on what to do with junk mail and other types of direct
solicitation. For $10, Private Citizen will even sell you a pamphlet
called "So You Want to Sue a Telemarketer.''
Bulmash says that by
year's end, he expects to have settled seven or eight lawsuits,
bringing this year's total to $15,000 "without even filing court papers.''
"The issue should be
privacy,'' Bulmash said. "But, unfortunately, it always comes
down to money, how much did I get.''
Richard Zelma, owner of a
small telephone interconnect service in Norwood, N.J., has been
fighting wayward telemarketers since last year, when he saw Bulmash
talking about consumer rights on a national TV news magazine.
"Since I work at
home, I was the recipient of about three telemarketing calls per
day,'' Zelma said. "I was channel surfing, and we saw this
thing, and my wife looked at me, and I looked at her, and I said,
'Could this be real? There is a God.'''
He says he wants to sue
several companies, including Dean Witter.
my home five times against my wishes,'' Zelma said. He said he has a
case filed against Chase Manhattan Corp.
"These people, when
they call, they are abusive and nasty,'' Zelma said. "They don't
And as long as the
industry grows, consumers like Smith and Zelma will be around to
fight the abusers.
"This is the
sociopathic level of this industry,'' Zelma said. "They have no
sense of rights, of privacy. All they have a sense for is revenue.''
Bells are Ringing
largest piece of the direct marketing industry, is expected to grow
by 8 to 10 percent a year through the 21st century.
Est. growth from 1991
SOURCE: Direct Marketing
Association, New York
a company dedicated to stopping direct marketing, has designed a
list of questions that consumers can ask telemarketers when they get
an unsolicited call. If telemarketers answer "no" to any of
these questions, the consumer may be owed $500 to $1,500 for
violating federal law.
Could you tell me your
name please? And a phone number, area code first.
What's the name of the
organization you are calling for? Does that organization keep a list
of numbers it's been asked not to call?
I would like my number(s)
put on that list. Can you take care of that now?
Will your company keep my
number on its do-not-call list for at least ten years? And does your
company have a written policy that says that on paper?
Can you send me a copy of it?
07, 1997. ©Russell
Smith. All rights reserved.
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