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California sues mortgage company

January 13, 2004

Attorney general files second complaint over national Do-Not-Call violations

Inman News

California's attorney general on Monday filed a lawsuit against a Florida-based mortgage company, alleging the company violated the Federal Trade Commission's Do-Not-Call law. The suit is the second the state has filed since federal no-call laws went into effect in October.

More than 250 Californians have lodged complaints about L.M.A. Marketing Inc., doing business as Mortgage Concepts, according to the attorney general's office.

California consumers received automated calls from the company under the guise that it was conducting a survey. A pre-recorded message would ask consumers whether they had interest in refinancing. A company representative then would call the consumer to pitch Mortgage Concepts' refinancing service, the eight-page complaint alleges.

Company representatives told consumers who complained that the firm is exempt from the federal Do-Not-Call law because it was conducting a survey.

"Federal law makes it clear that commercial calls are off limits to consumers who have placed their names on the national Do-Not-Call Registry," Attorney General Bill Lockyer said in a statement. "This lawsuit should serve as a warning to telemarketers who think they can evade this important consumer protection law by pretending to conduct a ‘survey' while harassing Californians in the privacy of their homes."

The lawsuit is the second Lockyer's office has filed since the federal no-call laws went into effect. The first suit, filed in November against Hayward, Calif.-based American Home Craft, alleges the home improvement company made illegal telemarketing calls to Californians whose numbers are listed on the Do-Not-Call registry.

The real estate sector is the first to be hit with allegations of no-call violations. In a separate incident, the Federal Communications Commission last month issued its first citation against home loan company California Pacific Mortgage for allegedly violating the federal no-call rule.

The Mortgage Concepts complaint, filed in U.S. District Court in Sacramento, alleges the company violated the federal Telephone Consumer Protection Act and the Telemarketing and Consumer Fraud and Abuse Prevention Act by placing telemarketing calls to phone numbers listed on the Federal Trade Commission's Do-Not-Call Registry.

Under the TCPA, the attorney general can obtain $500 in damages per violation, and $1,500 if the violations are willful or knowing. Under the Telemarketing Act, the attorney general can obtain actual damages, restitution and other compensation on behalf of California consumers illegally contacted by the company.

The complaint further alleges the company engaged in unfair business practices. Under that statute, the attorney general can obtain civil penalties of up to $2,500 for each violation of the telemarketing laws.

The defendants also violated federal rules that prohibit solicitors from making telemarketing calls or using pre-recorded, automated messages without providing the consumer the firm's name and phone number, according to the complaint. The rules require that information so the consumer can ask the company to stop making the calls, a request with which the company must comply, by law.

The complaint seeks that the company cease the alleged unlawful practices, $100,000 for violations of the TCPA, $100,000 in civil penalties and unspecified damages for violations of the Telemarketing Act.

California has its own no-call law effective January 1. The state law prohibits commercial phone calls to residential numbers registered on the FTC's no-call list and provides civil penalties of $11,000 per violation.

Lockyer warned that several other companies do business as Mortgage Concepts, but the Florida-based firm is the only accused in the complaint.

Copyright: Inman News Features

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