To be honest I really had not thought about how much the fines per violation were going to be for companies that were found to be not in compliance with the new Federal Trade Commission telemarketing sales rules covering debt relief organizations. I mean how much could they really be?
Well, thanks to the FTC for clarifying the fines for me it looks like the penalty is a whopping $16,000 “per violation” and that’s not chump change.
Debt settlement companies might want to hustle to comply with the rules that become effective on September 27, 2010 to avoid a $16,000 fine per violation. Those marketing and good faith fines will be easy to nail you on if you are not in compliance. All the FTC needs to do is grab a cup of coffee and pull up a web browser to catch companies not in compliance.
Too bad they didn’t outsource that stuff, with fines that large the FTC could create a cottage industry of violation hunters. Imagine if the FTC paid a bounty of 10% of the fine to the first person to report a particular violation? The industry would get cleaned up in a big hurry.
And unless debt settlement companies don’t jump to comply with the new rules it will be like shooting fish in a barrel, an analogy I need to look up the history for. Maybe in the future that will change from a description meaning something really easy to accomplish to, “Like catching debt settlement companies violating the FTC TSR.”
The Telemarketing Act says that “Any violation of any rule prescribed under subsection (a) of this section shall be treated as a violation of a rule under section 57a of this title regarding unfair or deceptive acts or practices.” 15 U.S.C. 6102(c). The schedule for civil penalties under section 57a is found at 16 CFR 1.98 and copied below.
§ 1.98 Adjustment of civil monetary penalty amounts.
This section makes inflation adjustments in the dollar amounts of civil monetary penalties provided by law within the Commission’s jurisdiction. The following civil penalty amounts apply to violations occurring after February 9, 2009.
(a) Section 7A(g)(1) of the Clayton Act, 15 U.S.C. 18a(g)(1)–$ 16,000;
(b) Section 11(l) of the Clayton Act, 15 U.S.C. 21(l)–$ 7,500;
(c) Section 5(l) of the FTC Act, 15 U.S.C. 45(l)–$ 16,000;
(d) Section 5(m)(1)(A) of the FTC Act, 15 U.S.C. 45(m)(1)(A)–$ 16,000;
(e) Section 5(m)(1)(B) of the FTC Act, 15 U.S.C. 45(m)(1)(B)–$ 16,000;
(f) Section 10 of the FTC Act, 15 U.S.C. 50 — $ 110;
(g) Section 5 of the Webb-Pomerene (Export Trade) Act, 15 U.S.C. 65 — $ 110;
(h) Section 6(b) of the Wool Products Labeling Act, 15 U.S.C. 68d(b) — $ 110;
(i) Section 3(e) of the Fur Products Labeling Act, 15 U.S.C. 69a(e) — $ 110;
(j) Section 8(d)(2) of the Fur Products Labeling Act, 15 U.S.C. 69f(d)(2) — $ 110;
(k) Section 333(a) of the Energy Policy and Conservation Act, 42 U.S.C. 6303(a) — $ 110;
(l) Sections 525(a) and (b) of the Energy Policy and Conservation Act, 42 U.S.C. 6395(a) and (b), respectively–$ 7,500 and $ 16,000, respectively;
(m) Section 621(a)(2) of the Fair Credit Reporting Act, 15 U.S.C. 1681s(a)(2)–$ 3,500; and
(n) Civil monetary penalties authorized by reference to the Federal Trade Commission Act under any other provision of law within the jurisdiction of the Commission–refer to the amounts set forth in paragraphs (c), (d), (e) and (f) of this section, as applicable.
[65 FR 60857, 60858, Oct. 13, 2000; 65 FR 69665, 69666, Nov. 20, 2000, as corrected at 65 FR 70761, Nov. 27, 2000; 69 FR 76611, 76612, Dec. 22, 2004; 74 FR 857, 858, Jan. 9, 2009]
AUTHORITY NOTE APPLICABLE TO ENTIRE SUBPART:
28 U.S.C. 2461 note.
[EFFECTIVE DATE NOTE: 74 FR 857, 858, Jan. 9, 2009, amended this section, effective Feb. 9, 2009.]
You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.