A federal court in Illinois ordered Dish Network to pay a record $280 million fine after it found the satellite TV provider’s retailers ignored do-not-call registries, peppering homes with millions of illegal telemarketing calls.
The original suit was filed in 2009 and claimed that Dish and some of its contractors violated the Telephone Consumer Act and the Telemarketing Sales Rule by making more than 55 million pre-recorded automated calls, also known as “robo-calls,” to homes in California, North Carolina, Ohio and Illinois.
Under the order, Dish will pay the federal government $168 million and will pony up another $84 million to the four states. Dish also will pay another $28 million to the states for violations to their various state statutes.
The fine is a record for robo-call violations, according to reports.
The $168 million federal judgment is also the largest civil penalty ever obtained for a violation of the Federal Trade Commission Act, according to the FTC, which joined with states in the original suit.
Dish plans to appeal the ruling.
“Dish respectfully disagrees with the decision by the Court and will appeal the ruling at the appropriate time," Dish Network said in a statement.
In her order, U.S. District Court Judge Sue Myerscough also imposed a 20-year plan to monitor Dish’s compliance with telemarketing laws.
Dish said in a statement that it believes the fines are exceptionally harsh, far exceeding other awards to other telecom and television service providers for similar violations. DirecTV and Comcast settled similar cases in 2009.
“The penalties awarded in this case radically and unjustly exceed, by orders of magnitude, those found in the settlements in similar actions, notably against DirecTV, Comcast and Caribbean Cruise Lines,” Dish said in a statement. “The Court is holding Dish responsible for telemarketing activities conducted by independent third-parties, including in circumstances where such third-parties intentionally hid their telemarketing efforts from Dish.
“Dish has long taken its compliance with telemarketing laws seriously, has and will continue to maintain rigorous telemarketing compliance policies and procedures, and has topped multiple independent customer service surveys along the way,” the company continued.
But in the order Judge Myerscough wrote that Dish knew those contractors were violating Do-Not-Call laws and “did nothing,” only firing the telemarketers in question after law enforcement officials in several states turned on the heat. Prior to that, the policy was to find a way around the rules.
“These changes corresponded with mounting pressure from investigations by the FTC and state consumer protection officials,” the order stated. “Ultimately, these investigations led to this suit being filed in March 2009 and Dish settling with the remaining 46 states in July 2009 by entering into the Assurance of Voluntary Compliance with them. This evidence shows that Dish reacted to pressure from law enforcement. The evidence supports the conclusion that the pressure needs to be maintained to keep Dish’s marketing personnel from reverting to their practice of trying to get around the rules.”
The court was also concerned about how Dish handled complaints after one of those contractors – Satellite Systems – continued to make hundreds of thousands of automated calls to the DNC list.
“Dish’s response to these consumers was essentially: go away, it’s not our problem, go after Satellite Systems,” the order stated. “Dish’s denial of responsibility and lack of regard for consumers are deeply disturbing and support the inference that it is reasonably likely that Dish will allow future illegal calls absent government pressure.”
“The outcome of this case shows companies will pay a hefty price for violating consumers’ privacy with unwanted calls,” said Maureen K. Ohlhausen, Acting FTC chairman," in a statement. “This is a great result for consumers, and I am grateful to FTC staff for their years of tenacious work investigating and developing this case. We and our DOJ and state partners will continue to bring enforcement actions against Do Not Call violators.”