by “Furious in Washington State”
- Who Am I?
- Telemarketing Sales Rule
- The Law Allows You to Sue, but Should You?
- Alternatives to Lawsuits
- I’m Mad and I Want to Sue!
- I’m Ready! What Are the Hurdles?
- First Hurdle – the Address
- Second Hurdle – Getting Your Case Filed
- Third Hurdle – Serving the Notice
- Fourth Hurdle – Make Your Case to the Judge
- Fifth Hurdle – Collect if You Win
- Settlement
- What Did This Cost Me?
- Was This Worth It?
- And Now the Bad News
- Worry About Taxes Later, Celebrate Now!
Who Am I?
I am a federal government retiree who does occasional substitute teaching just for fun. Basically, I don’t work during the summer. Also, I hate telemarketers and feel that companies who buy and sell individuals’ personal information in order to solicit are despicable. So, what did I do on my summer vacation? I sued a telemarketer!
Telemarketing Sales Rule
The Telemarketing Sales Rule (TSR) of the Telephone Consumer Protection Act (TCPA) gives telephone customers the right to sue telemarketers and get money if the telemarketers ignore the federal Do Not Call list. What a good law! Finally, consumers can take monetary revenge on companies who intrude on our lives by using the telephone to creatively trap us into giving them money for goods and services we don’t need or want.
The Law Allows You to Sue, but Should You?
Sounds easy, but the process has hurdles and hoops to jump over and through, as well as potential ramifications. Think very carefully about any decision to take legal action against a telemarketer. It’s bad enough that the telemarketer ignored the federally mandated Do Not Call list. If you choose to sue them, you will be required to provide your address to them! Do you really want to do this? Further, the proceeds you collect may be taxable (this is covered in IRS Publication 525). If you collect a substantial amount of money (more than $600), the telemarketer may need to obtain your Social Security number for purposes of issuing a Form 1099 if they agree to pay damages.
Alternatives to Lawsuits
There are low cost alternatives to filing the lawsuit. You can purchase a Telezapper (made by Privacy Technologies) or a Phone Butler. You can also download a sound file of the three note “Special Information Tone” (known as SIT), which alerts callers that a phone number is “not in service.” Both the Telezapper and the SIT sound file will leave your friends somewhat dumbfounded when they call you, as they will hear the “disconnect” tone and get confused. However, both options, once installed, require no action by the user. The Phone Butler, on the other hand, requires a minor action by the user upon receiving a telemarketing call.
(1) Telezapper
The Telezapper works by emulating the SIT you hear when you call a number that is disconnected. It does work with answering machines (which actually “answer” the phone), but does not work well with voice mail systems (because voice mail re-routes the call and doesn’t actually “answer” the call). From my personal experience, the Telezapper (which can be purchased online from Amazon.com) will get the best results if you answer your telephone within two rings, or set your answering machine/voice mail to two rings. Although 47 CFR 64.1200 (a) (5) prohibits telemarketers from disconnecting a call before 15 seconds or four rings, setting your answering machine/voice mail to three or four rings may or may not “zap” the call.
(2) Phone Butler
Another device, called a Phone Butler, requires some user effort. When a call is received from a telemarketer, the user presses the “star” key ( * ) on the phone. The Butler then sends a pre-recorded message back to the caller requesting to remove your number from their phone list. At this time, I am unable to find statistics as to whether or not a telemarketer will consider a recorded message to be serious enough to take action to remove your number from their list.
(3) Download a Sound File of the SIT
Alternatively, you can download a sound file of the SIT, and simply record the SIT at the beginning of your answering machine, just before your greeting. Telemarketers who detect this recording will conclude that the phone number is no longer operable, and they will remove it from their calling list.
I’m Mad and I Want to Sue!
If you are still reading, then you are irritated, annoyed, and generally furious, and want the telemarketers to pay for the interruption to your life. This article will outline the process I followed, and the damages I collected. This article is based on both federal laws and Washington state laws existing as of this writing (late 2007), and is not intended as legal advice.
I’m on the “Do Not Call” List. Why Are You Calling Me?
My phone number had been on the federal Do Not Call list for at least a year when I started receiving calls from a well-known specialty coffee company (the one that sends you the free coffee maker if you purchase their products). I don’t drink coffee, so I had no reason to have any association with this company.
I Asked Them Not to Call Me
Between the dates of June 8 and July 28, 2007, I received 14 calls from this company. On the fourth call (June 20, 2007), I informed the company that my phone number was on the federal Do Not Call list and this company was violating the law. The caller stated that in order to stop the calls, I was required to provide my name and address. I again stated that I was on the federal Do Not Call list, and they were violating the law by calling me. My understanding was that nothing in the law obligated me to provide my name and address to them. The telephone salesperson told me that if I did not provide my name and address, there was no guarantee that the calls would stop.
But They Ignored My Request
The calls continued, 10 more times. The calls stopped when I purchased and installed a Telezapper. Because I was called 10 more times after notifying them I did not want to be called, the last 10 of the 14 calls can be counted as double violations for each call.
Let’s Do the Math!
I was furious! According to [my understanding of] the federal law, the 14 calls can be counted as 24 violations; and each violation is worth $500. Let’s do the math:
14
Violations calling me X $500
$ 7,000
10
Violations calling me after I asked not to be called X $500
$ 5,000
24
TOTAL VIOLATIONS in 14 phone calls
$12,000
However, in Washington state, the current limit for Small Claims Court (which is the best avenue to file these lawsuits) is $4,000 without an attorney as of this writing. The decision of whether or not to use an attorney is your choice, but remember, attorneys charge a lot of money! (Note: In some states, individuals in Small Claims Court cannot use an attorney.)
Plan/Prepare to Educate the Judge
If you decide to assert your rights under the law and sue a telemarketer, do not make the assumption that judges know the entire law, especially the Telephone Consumer Protection Act and the Telemarketing Sales Rule. It’s up to you (and an attorney if you choose to use one) to research and educate the judge, and present your case. Keep reminding yourself of the memorable phrase Denzel Washington used repeatedly in the movie “Philadelphia:”
“Explain it to [the judge] as if [he/she] were a six year old.”
A Good Guide to Follow from Someone Who Has Done This
Fortunately for me, I found, on the Internet, a wonderful step-by-step guide prepared by a small business owner from Seattle, Washington, who had extensive experience (and collected damages!) in letting telemarketers know that he did not appreciate junk faxes. I thank this person from the bottom of my heart! The information saved me hours of research time and effort.
Good Advice to Take to Heart Before You Sue
The most valuable advice given in the Small Claim guide I found is to approach the suing of telemarketers with an attitude of selflessness and altruism. In other words, your mindset is “for the benefit of your family, friends, and neighbors.” Any money you gain is merely a stipend for your effort. Do not be motivated by greed!
But You Still Need to Do Additional Research
On the other hand, much of the information in the guide was prior to the enactment of the Telemarketing Sales Rule. Thus, I had to do a minor amount of additional research on the Telemarketing Sales Rule and applicable Washington state laws.
I’m Ready! What Are the Hurdles?
When you have made a firm decision to go to court with altruism and selflessness, the best place to address this kind of lawsuit is Small Claims Court (or your state’s equivalent).
- The first hurdle will be to find an address for the telemarketer. Good luck, as you may end up spending a few hours tracking this down.
- The second hurdle will be to get your local court to accept the case.
- The third hurdle will be serving notice.
- The fourth hurdle will be to make your case to the judge in court.
- The fifth hurdle will be collecting if you win. Just because you win doesn’t mean they will pay.
First Hurdle – the Address
The address is important, because it must go on the lawsuit document. If you are smart, when you answer the call, you will have this handy “script” next to your phone so you can follow it to obtain the address:
Keep in mind, telemarketers are getting wise to “the script,” and they may decide to hang up on you if they think you are “feigning interest“ with the intent to sue them. On the other hand, if, like me, you didn’t use the script, you will have to hunt down the address yourself. If you do not have Caller ID, then you need to make sure you get the phone number!
If your Caller ID does not show a business name or you have difficulty obtaining the specific business name of the telemarketer, a good place to start the search is. In my case, I knew the name of the company and I knew they had a web site. The address I found and used initially was a place located in Dover, Delaware.
Second Hurdle – Getting Your Case Filed
If the telemarketer is from another state, the Court Clerk will give a “programmed response” indicating that your state cannot take “jurisdiction.” Fortunately for me, Washington state has a law that allows me to bring this kind of case in a Washington court. (And again, thank you to the business owner from Seattle who provided that piece of wisdom in his guide!) The clerk will further tell you that they cannot give legal advice. The appropriate response to this is to remind the clerk that if he/she refuses to put your case on the court docket, that they are, indeed, “giving legal advice.”
On July 30, 2007, I took my information to the District Small Claims court of my county. And, as expected, I was told, “no jurisdiction.” I pointed out the applicable Washington state law, RCW 3.66.040(5), and reminded the clerk about giving “legal advice.” My case was filed and I got a court date two months in the future. The bad part was …. Washington state limits small claims cases to $4,000 unless an attorney is used. Well, I’d love to win the $12,000 I calculated, but $4,000 is better than nothing, and I decided to keep going on my own.
Third Hurdle – Serving the Notice
This is where the address information is critical. The judge will throw your case out of court if you do not prove that you made a reasonable attempt to serve notice to the correct entity and the correct address. Depending on your state laws, you may or may not have to do the legwork to serve notice. In Washington state Small Claims Court, it’s the plaintiff’s responsibility to serve notice. If you are “going it alone” and not using an attorney, the notice can be served in any of the following ways:
- Send a certified letter.
- Hire a process server.
- Contact the sheriff of the county where the telemarketer is located.
Brick-and-Mortar Address
If you use the last two options, you will need to make sure you have a brick-and-mortar address. Process servers and sheriffs cannot “serve” to a Postal Box or a CMRA (Commercial Mail Receiving Agency, such as Mail Boxes Etc.). The best way to assure yourself of a brick-and-mortar address is to Google the address to see how many, and what kinds of, other businesses share this address. From doing this, you may be able to ascertain whether it’s a CMRA or an actual location.
Oops!
I served notice (only the court document) with a certified letter to the first Delaware location I found. The letter was delivered, but I discovered that this address was an agent and not the actual company. Depending on the laws of your state, you may be able to get by using the agent, but other states may be stringent about this.
Prove to the Judge that You Made a Reasonable Effort
To make sure I covered all bases, I hunted down another address. Upon further Googling, I discovered that a well known, well respected clothing company located in Maine had previously sued this same coffee company. By reading the lawsuit, I discovered the coffee company was registered in Pennsylvania! By visiting the web site of the Secretary of State of Pennsylvania, I obtained an address in Pennsylvania (and did the research necessary to assure myself that it was a brick-and-mortar address and not a CMRA). I made another trip to the court to amend the original notice so that I could serve to the Pennsylvania address. I used two different methods to serve at this address:
- Certified letter
- $50 payment to the sheriff of the respective county in Pennsylvania
The certified letter was never accepted, and was subsequently returned to me. The sheriff of the respective county indicated that I could pay the $50 with a personal check. (Other states/counties may have different policies.) Further, the sheriff of that county required a “seal” on the notice.
More Cluelessness
In order to obtain the seal requested by the sheriff in Pennsylvania, I went back to the courthouse, where I discovered further cluelessness. The court clerk had no idea what the seal was. After going through three levels of supervisors, we finally found someone who knew what was required. I got my seal, and I sent my request to the sheriff. (I want to emphasize that the county sheriff that I used was very nice and didn’t require me to jump through hoops, other than the seal issue.) The sheriff attempted to serve the notice, but discovered that the current occupant of that business address was an auction company. No, I couldn’t get my $50 back. But I haven’t lost yet! See Fifth Hurdle.
Fourth Hurdle – Make Your Case to the Judge
Again, do not assume that the judge knows the law. It is up to you (or your attorney if you choose to use one) to “explain it to the judge like they are a six year old” and to bring all supporting documentation. Further, if you are making a court appearance (or meeting with the defendant’s attorney to settle), dress in a “businesslike” manner (whatever that may mean). Present yourself as an informed consumer, not a greedy scoundrel.
In my case, I settled out of court. See Fifth Hurdle. If you do settle out of court, it is important that you provide the settlement documentation to the court and withdraw/cancel the lawsuit prior to the court date (or request a continuance if necessary). Court personnel get very upset if you don’t “close their loop.” Do not, under any circumstances, agree to withdraw the lawsuit until you have cleared the Fifth Hurdle and have the damage award in your hands (and hope the check doesn’t bounce).
Fifth Hurdle – Collect if You Win
Assuming that you have either: (1) cleared the Fourth Hurdle by convincing the judge that you deserve compensation for the intrusion on your life; or (2) decided to settle out of court, the last hurdle is to collect the damage award. If you are lucky, this goes smoothly.
About four weeks before the court date, I received a call from an attorney located in Chicago, IL, representing the coffee company and the parent company owner. (Apparently my initial notice that was served to the agent got some action!) The attorney stated that the company “just didn’t know how this could have happened, and they are trying to investigate…..” and that they like to “resolve these kinds of cases” without going to court.
I explained to the attorney that I had Caller ID and my phone prints out the calls. The attorney indicated that they were not disputing whether or not I received the calls. Further, I informed the attorney that [my understanding of the] federal law allowed me to collect $12,000; but Washington state law limits the amount to $4,000. The attorney tried to tell me that the statute didn’t say what I thought it said. I replied, “Then you come to MY state and tell it to the judge. I have a court date and if you don’t show up, I win.” The attorney said he would get back with me later.
Existing Business Relationship: “We Didn’t Know”
About two weeks before the court date, I received a call from an attorney located in Seattle, WA. This attorney told me that the person who had my phone number prior to me (and I was told the person’s name) had an “existing business relationship” with the company because he/she had placed an order for coffee in March 2006, three months before the phone number was assigned to me. Under the 18-months rule, the company could continue to call that number, even though the number was on the Do Not Call list. The company was unaware and had no way of knowing that the phone number now belonged to someone else.
The attorney confirmed that I had legitimately provided my “no call” request. The attorney also confirmed my assertion that under the TCPA and TSR, I was not legally obligated to provide my name and address as part of a no-call request. (You can provide your name and address, but you are not legally obligated to do so.)
30 Days?
The attorney further explained that the federal law allows a company 30 days to remove a number from their calling list after a no-call request, and that the 30 days had been exceeded by the last three phone calls to my number. Therefore, the company was willing to pay me $1,500 ($500 X 3 calls). After twenty minutes of arguing back and forth about what the law does and doesn’t say (especially about the 30-day rule), and a final “threat” by the attorney that under Washington state law, I could be required to pay court costs even if I collect zero (I think the attorney was blowing smoke!), I decided to settle for the $1,500.
I Have to Provide My SSN?
Because the amount was over $600, I had to provide my Taxpayer ID number. The attorney stated that the settlement offer would include a provision that my Taxpayer ID number, telephone number, home address, and email address could not be used for any kind of marketing effort (covering all the bases…), and that neither the company nor I would seek attorney fees. I told the attorney that I wanted the check mailed to their local office and I would drive there and pick it up myself. I arranged it this way so that if there was anything I didn’t agree with, I could say so right then and there. At this point, it was about one week to the court date.
A Vaguely Written Section about “30 Days” Subject to Interpretation
Incidentally, I have observed conflicting information on the “30 days to remove” rule cited by the attorney. In Federal law, 47 CFR, paragraph 64.1200 covers this. Section (d) under that paragraph requires telemarketers to have procedures to maintain a list of persons who request not to receive telemarketing calls. Section (d) (3) requires telemarketers to honor a “do not call” request within a “reasonable” time from the date of request, and suggests that the period “may not exceed 30 days.” It can be argued that the 30 days in Section (d) (3) is merely a “recommendation” as to what is “reasonable” and is not cast in stone. If you push that issue, I recommend using an attorney!
Although Section (c) (2) of the same paragraph prohibits telemarketing calls to phone numbers registered on the Do Not Call list, the company in this case had an “out” in that Section (c) (2) (i) relieves any liability if the calls are the result of an error and the company can demonstrate that specific standards outlined in this section were been followed. Let’s just say, I was lucky to get $1,500.
Settlement
A week before the court date, the attorney faxed me a draft settlement letter. We did go back and forth a few times on wording issues. Also, the attorney attempted to draw me into a “lifetime relationship” with a clause of “if you move and don’t inform us of your new address, you can’t sue us” line. I said NO WAY! The line was removed. Do not allow that kind of clause in your settlement. I collected the settlement on the actual court date. The attorney took care of “closing the loop” by preparing the necessary paperwork to the court. But technically, it is the plaintiff’s responsibility to do this.
What Did This Cost Me?
I received the 14 calls between June 8, 2007, and July 28, 2007. The only call I actually answered was the fourth call, so the 14 calls themselves did not significantly “disrupt” my life. However, between July 30, 2007, (date I filed the claim) and September 25, 2007, (the end of it all), I estimate that I spent 25 hours in research, filing the claim, serving the notice, talking to attorneys, and collecting the damage award check. Even though I believe my time to be valuable, methods for placing a dollar amount on one’s personal time are currently inconsistent. However, I documented my “hard” costs, which amounted to $238 as follows:
Postage (to include 2 certified letters): $20 Court fees: $29 Telephone calls: $6 Sheriff: $50 Parking at attorney’s office in Seattle: $5 Mileage (@ 48.5 cents, IRS rate for 2007) $128
TOTAL $238
Of the $238 that I spent, $60 (costs for the certified letter that was subsequently returned and the sheriff’s fee for the failed attempt to serve notice) was a wasted effort. Further, when my hard costs are subtracted from the award, with the result divided by the 25 hours of my time, I got $50 an hour. Not bad!
Was This Worth It?
Yes. I got the small moral victory of “interrupting” the company’s time to make them deal with a lawsuit. And between the Chicago and Seattle attorneys, I’m sure the company’s legal bill for this case will be slightly more than the $1,500 I received. Will the company care? Probably not. But I got $1,500!
And Now the Bad News...
If the damages that you collect are possibly taxable, are the expenses deductible? On September 19, 2007, an agent with the Internal Revenue Service told me that only the “legal” expenses would be deductible, and only if you itemize on Schedule A. The expenses are deductible to the extent that the costs exceed 2% of a magical number known as “Adjusted Gross Income” (the last line on the front page of the Form 1040). In my case, I could deduct court fees, sheriff or process server fees, and attorney fees if I had used an attorney; but only if those expenses exceeded 2% of the “magic number.”
Worry about Taxes Later. Celebrate Now!
So, what did I do with the $1,500? I kept $238 for my costs, and gave the rest to some charities I like. (And the contributions will be tax deductible if I itemize on Schedule A.) But even under the spirit of altruism and selflessness, it is ok to keep the money!
