Suing Telemarketers for Fun and Profit
by Sai Emrys (2600@saizai.com)
I would like to share with you some information and suggestions about how you can cash in on the illegal actions of your telemarketers.
Why? If enough people sue (or make credible enough threats that they decide to settle), then they'll go out of business and hopefully switch to doing something with a bit less scumbaggery. As is, their risk of having to pay out is low enough to be a viable part of their operating costs.
How it Started...
In October 2008, I began receiving repeated calls from telemarketers, primarily in the form of an automated telemarketing message saying that it was the 2nd (or 3rd, but always final) notice that my car insurance was about to expire. (I haven't had a car in two years, incidentally; I get around by Ninja.)
These started to annoy me, especially as I know that they are illegal. Specifically what is illegal about these calls (see appendix below) is that:
- They're automated, recorded messages to a home or cell phone.
- They don't include the name of the calling party at the beginning of the message.
- They don't include the phone number or address of the caller.
- They called a number on the "Do Not Call" list.
- They failed to provide a written copy of their "Do Not Call" list maintenance policy.
Rather than just yell at them or make useless complaints to the FCC, I decided to retaliate in a way that would have some real teeth. Here's how you can do it, too.
Note: The information below is actual information that I used to get an actual settlement check. However, there are multiple companies involved (see Step 3), and the information about the telemarketing outfit is no longer valid (they're a fly-by-night operation).
Step 0: Mindstate
Although it is highly likely that you will settle out of court, you must act as if you are actually going to sue these people.
It will involve some paperwork and out of pocket costs, up to ~$150, as well as actual negotiation with your adversary. Be prepared to be blown off, lied to about the legality of their operations, etc. If any of that would dissuade you from proceeding, don't bother starting.
Ensure that you have evidence that you can legally show in court to a judge that is sufficient to demonstrate that:
- Calls were made to you illegally.
- The party you're suing is responsible for those calls.
It needs to be convincing, clear, specific, and trustworthy. If possible, try to obtain third-party records (e.g. from your phone company) that support your own notes.
Step 1: Keep a Log
You need to keep a log of every single time they call you. Write down the time, Caller ID number, the entire message you heard (if any), whether the message mentioned the caller's corporate name at the start, whether it was an automated call, and whether it included their phone number or mailing address.
If it is legal in your state (en.wikipedia.org/wiki/Telephone_recording_laws), record all your calls with telemarketers; you may need special equipment to do so, since these will be incoming calls. If it is not legal for you to do so (e.g. in a "two-party consent" state), make sure that one way or another you make as detailed and accurate a transcript as possible; I'm sure you can think of ways to do so that don't involve having to mention in court that you recorded the call.
Go to donotcall.gov and make certain that all of your phone numbers are on the "Do Not Call" list. Be sure to click the link in their response email, and save a copy (for bringing to court) of the email confirmation they send you.
Step 2a: Finding Out Who is Calling You - Initial Information
First off: whatever it says on your Caller ID, it's probably a lie (en.wikipedia.org/wiki/Caller_ID_spoofing). Unless you're very lucky, it's just someone innocent whose number the telemarketers have spoofed. Don't bother them. However, if you Google the number, you'll likely find out a whole lot of information about them from others who have gotten the same call. This is worth doing. Be aware that 99% of the posters will not know any more than you, though; more likely, less.
If you try to ask them anything about their company, how to contact them, how they got your number, or how they even know that you have a car, they will hang up on you immediately. This is illegal, but they will do it anyway.
What you can do is called "social engineering" (en.wikipedia.org/wiki/Social_engineering_(security)).
Telemarketers are calling you for a reason: they want to sell you something. To do so, they need to actually talk to the 0.5% of people who respond, sell them on the product, and get them to pay. If they get even a hint that you are not in that bottom 0.5%, they'll hang up on you. You can exploit this single vulnerability.
What you do is simple: play dumb and play along. Be interested in what they're selling. Make up a name, car, license number, phone number,and whatever else you need. Try to make it sound natural. Write it down, so that you can repeat it if they ask again. Your goal is to get them to tell you a website, address, business name, and DIRECT phone number. They will give you a fake 800 number first. Ask if there's some direct line where you could call them back after you've thought about it, because you're really interested but just need to think it over / ask your spouse / etc. and would really like to finish the deal once you get their approval.
They will try to avoid this. They will lie to you. They will transfer you several times while they "verify" things and "contact their agent." They will make up "discounts" they're giving you, say that you need to close the deal now, ask you to say that you decline it and that they won't be able to offer it again, say that you need to have trust, etc. It is all complete bullshit, but you must play along. Act hooked, interested, and just wanting to get back in touch with them.
Do not be angry with them, do not ask anything implying that you know what they're doing is illegal (until the very end when the game is up and you might as well get them on a couple more violations), and try to make your requests for information seems as much as possible a natural part of their script.
Step 2b: Turning Initial Information into Extensive Information
What you should have now is a name, website, address, and real phone number (call it back, see if they answer). For me, I had four leads leaving the call:
- "Consumer Direct, 25910 Acero, Suite 200, Mission Viejo, CA 92691, Orange County"
- "consumerdirectwarranty.com"
- "877-539-8557" (can't be reached)
- "949-309-3751 / 3753" (the telemarketers' actual phone number)
That's not enough to sue someone, but it's enough to get enough. ;-)
Now you need to turn that into actionable information. Specifically, what you need are the formal business name of the people who called you, their legal address for service of process, and (if possible) their direct phone number. These steps are only partially in order. You will need to do multiple passes as you get more information, to spider through the results:
1.) Go to onsamehost.com and look up websites they mentioned.
That is, search for consumerdirectwarranty.com showed that the same IP (204.9.77.216), hosts contractpipeline.com, insigniasd.com, thatkitchenplaceredding.com, and warrantyadminservices.com. Most will be irrelevant (it's probably a cheap shared host).
2.) Enter all of those websites into whois.net and record all contacts that are for real people.
This should get you phone, name, and address of one of the real people behind the scenes. If you're lucky, this will get you the real contact info for both their tech guy and their CEO. E.g. there was no useful WHOIS information for consumerdirectwarranty.com, but warrantyadminservices.com gave me the CEO:
And website guy: "Insignia Web" (note the resemblance to insigniasd.com).
3.) Check to see if there's a different response with interesting information if you go to the base IP address.
For example, 204.9.77.216 is a Plesk control panel, showing the admin's email assrkinyon@yahoo.com. Some Googling reveals that to be the email of:
4.) Search Google and switchboard.com for any phone numbers or corporate names you have found.
For example, switchboard.com gives the home phone and address of a couple "Sletners" living in Redding, California. A couple calls later to eliminate random cousins yields the answer:
5.) Look up any corporate names at your Secretary of State website.
In California, this is kepler.sos.ca.gov. If you're lucky, you'll just have found their CEO. Be aware that you may need to try a few variants before you find the right ones. I found:
These public records all contain names and addresses, and are necessary if you want to sue the business. Specifically, you want to make sure you record the agent for service of process, that is the person to whom you will send legal papers (including your "pay me or I sue" letter).
6.) If you know what county they live or operate in, do a Fictitious Business Name (FBN) search.
For example, for Orange County, this is cr.ocgov.com/fbn/index.asp; searching for national dealers or %warranty% [% is the MySQL wildcard] gave me "NATIONAL DEALERS WARRANTY SERVICE," and the names of the people using that FBN:
7.) Google their addresses, names, and phone numbers.
See if you can find other businesses in the same building. Call up those businesses and (very, very politely) ask for the landlord's information (name and phone number). Call the landlord and ask who the tenant of suite X is, and what their direct phone number is.
For example, I found out that their landlord is Dolphin Partners and the cellphone number of one of the partners; from there I was able to find out the actual address of the telemarketing outfit.
8.) Call the phone numbers a few times.
Try numbers that are a few off higher and lower than then number you got; they will probably be on a multi-line system and own many sequential numbers. Try it both during their hours of operation (so you get a live operator) and after (so you get their voicemail messages).
For example, the direct number I got was 949-309-3751 / 3753. Their main number is 949-309-3750, and they own numbers up through at least 3780. The direct line for Kamisha Daniel, one of the co-owners, is 949-309-3773. This is the person to call if you have a lawsuit ready to go and you want to settle. (See Step 3 below first.)
If you dial 949-309-3750 extension 0, you would be routed directly to their call center, as if they had called you. They can't tell the difference. This can make for great fun, and a good way to practice your modifications of their script, so you don't have to wait for them to call you.
949-309-3750 is answered as "United Fidelity Funding Corporation." Several of the reps from 949-309-3751 onwards answer as "National Dealers Warranty Service" or "Warranty Services."
Discovering the name "National Dealers Warranty Service" (the true company name of the actual telemarketers, rather than the warranty sellers) was the decisive point in my case. This plus the FBN search gave me all the information I needed to make a very credible legal threat against both of them.
9.) Find out their phone service provider.
Call up a few providers that operate in the area and ask for their legal compliance center's phone number. Then ask them to check whether they are the provider for the phone numbers you know to be used by the telemarketers. You'll need this later for subpoenas. (See Appendix for info.)
10.) Blog about it. Include all the details (e.g. their contact information).
They really really don't like it when you do this. Why? Because it allows other people, like you, reading this article, to find out who they are and sue them, and it makes them look bad. They are in business because very few people successfully find out who they are, and fewer still actually go through to the point of suing or settling. At a cost of $2500-$7500+ per suit in small claims (plus their legal fees), this would add up. If it's a small number, it can be written off as the cost of business.
It also helps you because you may make some contacts with people who know more about them and can offer advice that will be helpful to your case.
Step 3: Understand the Structure
It took a while for me to uncover enough information to do this, and most people don't. There are at least three layers of companies involved in this operation:
Actual Telemarketers
In my case, this was "National Dealers Warranty Service" (not Inc., just an FBN). These companies constantly change; you may be getting calls from many different telemarketers on behalf of the same people, with more or less the same script, so it can be confusing.
Typically, the telemarketers are not very legally savvy, and rely more on not getting caught - and dissolving, moving, and starting over again if they do - than actually being able to win any cases that are brought to court.
Product Shell Companies
In my case, this was "Consumer Direct Warranty Services, Inc." It's not a real company per se (though it's listed as one); it's more like one of several faces of the real company. (The Nevada face is "Warranty Administration Services, Inc.")
They are the ones whose name is going to be on actual product contracts, whose name the telemarketers cite and claim to be, etc. They do not, however, make any calls to you directly; if you try to sue them, they'll claim that they're not liable, only the telemarketers are. (This is false; see below.)
Parent Product Company
In my case, this was "SafeData Management Services, Inc." They are too big an operation to easily just dissolve and reform every few months, which means they're also a much better target for prosecution - but also one that's a bit more able to defend themselves. They do not place any calls directly; they just handle the product being sold by the telemarketers.
In legal terms, the telemarketers are the "agent" of the parent company, which is the "principal" (see Appendix, "principle of agency"). Because of this, both are liable to you, and you can sue and collect from either or both - but they will try to tell you otherwise. The parent company will probably be perfectly happy to drop the telemarketers just as soon as they appear to be a liability; as far as they're concerned, telemarketers are a replaceable commodity.
Step 4: Profit
Now that you've done your homework, review it and make sure it's in order.
Specifically, you'll need:
- A full, detailed log of every call they made to you, and what about that call was illegal (see the list at the top).
- The full formal name of the company, their address, their phone number(s), and their agent for service of process.
- The will to follow through with this despite a bit of runaround.
1.) Get papers ready.
If you're filing in California civil court, go get form SC-100 (www.courtinfo.ca.gov/forms/fillable/sc100.pdf) and fill it out. It's very straightforward.
You may want to prepare subpoenas also. Think of all the documents that the telemarketers, your phone company, their phone company, or others might have that will help you prove your case.
Unfortunately, according to my phone service provider, AT&T's legal compliance division, they do not keep subpoenable records of Call Detail Records (CDR), including Automatic Number Identification (ANI) and originating Private Branch Exchange (PBX), for incoming calls to landlines - only for outgoing calls and calls made to cellphones. I haven't tested this yet, however; it may be that their story changes when given an actual subpoena.
2.) Offer to settle.
Under California law, for small claims at least, you are required to contact the people you are about to sue to first try to settle the matter in good faith. What this means is that you call their CEO and say (from a prepared statement) that you are about to sue them for violation of the TCPA, TSR, and CA CLRA (or insert applicable laws here, see below), and would like to know whether they are interested in settling the matter out of court to avoid the hassle and expense of court.
You'll probably need to leave a callback number while the secretary you tell this to calls the CEO and their lawyer. If they don't get back to you within a few days, call again saying that unless they call you back within a reasonable, specified period of time (e.g. three business days), you will treat their response as a refusal to settle and proceed with the lawsuit.
3.) File suit.
Most likely, they'll brush you off the first time. They'll be much more eager to settle once you've had them served with your court order.
You'll have to go to court, give the clerk your documents, make sure they're entered correctly, etc.; it may take a few hours. Then hire a process server near your adversary to serve the filed court order on them; be sure to give plenty of time for this. It'll cost $70-150, depending on how hard they are to reach. Be sure you get a signed "proof of service" back from the process server and file it with the court, or your case may get thrown out.
My court claim was for $7500. I eventually settled with SafeData for half that amount, with the caveat that I had to take down my blogged information about them, and that I can continue my suit for the rest of it against National Dealers Warranty Service. Their initial settlement offer was $1500; deciding on the final value and terms is just like bartering for a car, really.
On receiving the notarized settlement from SafeData and cashing their cashier's check, I filed a dismissal with prejudice with the court, preventing me from suing them again for the same charges (but see below).
I went through this process with National Dealers Warranty Service as well, but:
- They flaked out when I insisted that they have their contract notarized.
- They wanted to include a gag clause to prevent me from discussing it.
As a result, I'm continuing my suit in court; we'll see how that turns out. One advantage in this case is that, because they are only an FBN and not a corporation, I can sue (and collect against) them as individuals, "severally and collectively"; if they had incorporated, I'd only be able to sue the corporation, which at this point would probably not have any assets to collect.
Step 5: Taking it Even Further
I've only discussed the procedure for financial recourse. Small claims courts do not have jurisdiction to issue injunctions; however, injunctions are provided for as one of your recourses under the TCPA and CLRA. To obtain one (and thus put them out of business or face arrest), you will need to go to full-scale civil court. This involves lawyers and higher court costs (filing fees alone are $200-300). However, under California law at least, lawyer's fees are recoverable as part of your damages.
Ironically, one day after I settled with SafeData, I got another call with the same pitch - from a different telemarketer, but with the same parent company behind it. This means that, a) I immediately get to put my blog posts back up (because they are now based on the new incident) and b) I will be suing them in superior civil court for an injunction and significantly higher costs.
At that point, we wander out of the territory that I can cover in this article and that is easy to do on your own; I hired a lawyer for this case, on contingency. I recommend that you refer to the excellent Nolo Press book, Everybody's Guide to Small Claims Court. A substantial portion of it is available through Google Books search.
If you'd like to know more about my cases, check out saizai.livejournal.com/tag/tcpa or email me.
Happy hunting!
Appendix: Know Thy Law
Google and Wikipedia are your friends.
In California, I also highly recommend that you read through the California Courts Self-Help Center (www.courtinfo.ca.gov/selfhelp/smallclaims); it has a lot of useful information about the process and requirements.
If you don't live in California, you should find out whether your state has laws similar to the CA CLRA (see below). If it does, you will want to include them in your calculation of damages and in your demand letter.
Please note that I am not a lawyer, and I'm definitely not your lawyer. I am, however, someone who used Google and my brain to resolve a matter like this to my satisfaction, and this information was critical to that. You should do your own research also, using this as a starting point.
Principal of Agency
See The Elements of Business Law by Ernest Wilson Huffcut, §126, "Liability of principal to third party" for details, as well as 3, 10 F.C.C.R. 12391, 12397 (1995) and FCC 00-378, October 23, 2000, footnote 24 for official policy.
What it means: you can sue both the telemarketers (who are acting as the agent de facto of the warranty sellers) and the warranty sellers themselves (who are called the principal). The principal is legally liable for the actions of their agent. If the agent is behaving in a way that violates their contract with the principal, then that is a matter for the two of them to resolve between themselves using a suit for indemnification, and not your problem.
You can collect judgment against both, but you can only collect once. That is, they are both responsible for paying you off, but you only get to have the single amount, not twice as much.
Telephone Consumer Protection Act (TCPA)
47 U.S.C. §227(b)(1)(A)(iii) - Making automated calls to cellular phones.
47 U.S.C. §227(b)(1)(B) - Making automated calls to residential line w/out prior express consent.
47 U.S.C. §227(c)(3)(F) - Making a 'telephone solicitation' to anyone on the Do Not Call list.
47 U.S.C. §227(d)(A)(1) - All recorded messages must state identity of caller at beginning of message.
47 U.S.C. §227(d)(A)(2) - .. and at some point give their phone or address.
Private Right of Action
47 U.S.C. §227(b)(3)(A) - Sue in state court for injunction.
47 U.S.C. §227(b)(3)(B) - Ditto, to recover actual monetary loss or $500 in damages for each violation, whichever is greater.
47 U.S.C. §227(b)(3) - Court may increase fine to up to $1500 per violation if it finds the defendant ‘willfully and knowingly violated this section (easily established by sending them a C&D letter by certified mail)
47 U.S.C. §227(c)(5) - Same as (b)(3)(A&B) above including tripling clause, if received more than one call in any 12 month period on behalf of the same entity. Note that (c)(5) is a separate action, and thus a single call to you may constitute two violations - one under (b)(1), and one under (c)(3), at $500-$1500 per violation.
Public Right of Action
47 U.S.C. §227(f)(1&2) - State AG may sue in federal district civil courts.
Statute of limitations: 4 years per 28 U.S.C. Section 1658, see Sznyter v. Malone
Note: 1 call = up to 1 violation of TCPA - Blockburger v. United States, 284 U.S. 299 (1932). Therefore the total amount per call under TCPA alone is $500-1500. However, that is only for the TCPA violation; it doesn't include damages under the TSR or CLRA. Also, the Blockburger interpretation is not held everywhere, so it won't hurt you to try to claim one violation per infringing section (-4 per call) and see how your local court interprets it.
Federal Trade Commission's Telemarketing Sales Rule (TSR)
47 C.F.R. §64.1601 (4)(e) - Telemarketers must transmit Caller ID (CPN or ANI) & name of telemarketer or their client; must be a number to which one can make a do not call request; must not block Caller ID. See also FTC v. Venkataraman (FTC won by settlement).
California Consumers Legal Remedies Act
CA Civil Code §1770 (a)(22)(A) - Unsolicited prerecorded message without real human first giving caller name & address or phone number.
CA Civil Code §1780 (a) - Sue for actual damages, injunction, restitution, punitive damages, & whatever else the court thinks is appropriate.
CA Civil Code §1780 (d) - Winner gets attorney fees & court costs.
CA Civil Code of Procedure §1021.5 - Ditto.
CA Business & Professions Code §17200 - Injunctions Statute of Limitations: 1 yr.
CA Business & Professions Code §17538.43 - Unsolicited faxes ($1500/fax if from outside CA, $3000/fax if from inside).
Note: California Civil Code §1780 (a) means that you get to sue for any amount up to the cap of the type of court you filed in. It is purely at the judge's discretion. Make a convincing case that the opposing party is scum who are knowingly and flagrantly calling tens of thousands of people illegally and flouting the law, and that will be a high amount.
California Small Claims Court Limitations
California small claims court limits for claims are $7500 twice a year, $2500 afterwards, per plaintiff. If you want to sue for more than that, then you should either:
- Sue separately for separate incidents.
- Sue in superior civil court (i.e. the normal, non-small-claims variant).
- Get them to settle for a reasonable amount by credibly threatening to do 1. and/or 2.
Telco Subpoena Resources
- AT&T Landlines: 800-291-4952 x9
- AT&T Wireless: 800-635-6840
- Alltel / Windstream Landline: 888-558-6700 x1
- Alltel Wireless: 866-820-0430
- Versign / Focal Comm. / Level 3: 918-547-9618
- Socal Comm.: 312-895-8978
Many of these will tell you the service provider of a number if you ask nicely. For example, "Could you please check whether you're the right people to subpoena for this number?" will often give you an answer like "No, that's Focal-Verisign:7058", and then you know whom to call next.
Be sure to ask what records they can provide, how to word the subpoena, whom to address it to, how much it'll cost, etc.
