Pennsylvania AG sues lead generators for misleading advertising | Goodwin

On November 2, 2022, the Attorney General of Pennsylvania filed a complaint in federal court alleging that a group of companies that provide lead generation services violated the Telemarketing Sales Rule (“TSR”), 16 CFR Part 310 and violate the Pennsylvania Consumer Protection Act. 73 PS §§ 201-3 and 201-4, through two improper advertising practices. First, the defendants allegedly used deceptive online advertisements to lure customers to websites where they were tricked into providing contact information and survey responses, and second, their contact information and responses were allegedly unlawfully sold to telemarketers, even for customers at the state or national level Level -Non-Call Lists.

According to the lawsuit, the defendants “operate dozens of websites designed for lead generation,” including surveysandpromotions.com, restaurantpromotionsusa.com, and mymonthlysweeps.com, that offer consumers in exchange for “gift cards to popular retailers and digital payments to mobile apps.” ‘ advertise Answer survey questions. The websites require visitors to provide their personal contact information and tick a box provided they agree to fine print stating that they will receive pre-recorded calls and text messages from marketing partners for telemarketing purposes, whose names will be hyperlinked to customers list. Likewise, the survey questions customers are asked to answer on the websites contain fine print stating that by clicking certain answers, customers are consenting to be contacted by marketing partners, even if they are on do-not-call registries. However, the complaint alleges that these disclosures are insufficient as they are “particularly obscured by [images] of the promotional offer.” The complaint further alleges that the alleged consent of these customers is unlawful because a direct agreement between the telemarketer and the telemarketer is required to waive registration on a do-not-call list and a To enable telemarketers to send messages to customer. This means that “explicit consent must be obtained directly from the seller or telemarketer from the consumer,” not from a lead generator.

The Attorney General’s Office alleges that the theory of its TSR liability complaint that consent to call persons on the Do Not Call list cannot be obtained on behalf of third parties is based on the FTC’s statement and purpose basis of the 2008 amendments to the TSR published in the Federal Register. There, the FTC issued a statement in response to comments on the rulemaking as to whether consent is transferrable. The FTC said that “a consumer’s agreement with a seller to receive calls with pre-recorded messages is non-transferrable” and “[a]Any party other than that particular seller must negotiate its own agreement with the consumer to accept calls with pre-recorded messages.” 73 Fed. Registration number. 51163, 51182 (Aug 2008). The FTC then concluded that “[p]Rerecorded calls made to a consumer on the National Do Not Call Registry by a third party who does not have their own agreement with the consumer would violate the TSR.” ID. Although the Attorney General relies on this 2008 Statement and Purpose Statement, the Statement does not really address the legal issue of whether a consumer can contractually agree to request and provide consent to communications from third parties and is a novel theory.

According to the complaint, the defendant’s websites also violate the country’s consumer protection law because they “create[] risk of confusion or misunderstanding” by “failed”.[ing] Include clear and conspicuous disclosures advising consumers that by registering their contact information with Defendants, they allegedly consent to being contacted by multiple third-party providers whose products and services are unrelated to the promotional offerings.”

The attorney general’s office is seeking, among other things, civil penalties of $1,000 per violation or $3,000 per violation involving a victim older than 60, surrender of profits, and a permanent ban from selling the infringing TSR Collected Consumer Data.

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