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FTC files first suit over do-not-call violation

Federal regulators have sued a consumer debt service for violating the National Do Not Call Registry's list of telephone numbers, the first time the feds have taken legal action to enforce the popular list.
/ Source: Reuters

U.S. regulators said on Wednesday they had sued a consumer debt service for violating the government's do-not-call list of telephone numbers, the first time they have taken legal action to enforce the popular list.

The Federal Trade Commission accused the National Consumer Council of violating consumer protection laws and masquerading as a nonprofit organization to call people on the list.

"These defendants lied about their nonprofit status and intentionally put consumers in harm's way financially," FTC consumer protection chief Howard Beales said in a statement.

Americans have placed nearly 60 million home and mobile telephone numbers on the do-not-call list since it was launched last year.

While businesses are banned from calling phone numbers on the list, charitable and political callers are free to call as long as they respect consumer requests not to be called back.

At the agency's request, a U.S. District Court judge issued a temporary restraining order barring the National Consumer Council's "illegal activities," the FTC said.

The National Consumer Council had no immediate comment. Its Web site describes the council as a nonprofit organization that helps consumers in credit card trouble.

But The FTC said it took hundreds of dollars in fees from consumers' monthly debt payments, although it claimed to be a nonprofit, which would exempt it from the do-not-call list restrictions.

Violators of the do-not-call list can be fined thousands of dollars for every number they call, but enforcement rules vary as jurisdiction is split between the FTC and the Federal Communications Commission. State prosecutors can also access the complaint database to launch investigations of their own.

FTC officials said the National Consumer Council left prerecorded messages on consumers' home answering machines claiming it was a nonprofit organization that could "stop creditors' collection efforts and significantly reduce consumers' debt."

However, the FTC said the council had, in many cases, failed to help people and "inflicted severe harm" in some cases, pushing some to the point of bankruptcy.