Dish To Pay Federal Government And States For Illegal Robocalls

Dish Network Corp. has been ordered to pay a fine of $280 million to four states and the federal government over a telemarketing violation. The order was issued on Monday by Sue Myerscough, a U.S. District Judge.

The lion’s share of the fine, $168 million, will go to the federal government while the rest, $84 million, will be paid to the states of Ohio, North Carolina, Illinois and California for violating federal law by making telemarketing calls to consumers who were on do-not-call lists. Dish Network will also pay an extra $28 million to Ohio, North Carolina and California for violating state law.

Compliance strategy

The company was also prohibited by the U.S. District Judge from violating the laws in the future. Dish Network’s telemarketing operations will also be under supervision for 20 years. According to the judge, though the plaintiffs had sought to have Dish Network banned from telemarketing, she decided a compliance plan was the best option.

“The evidence supports the conclusion that the pressure needs to be maintained to keep Dish’s marketing personnel from reverting to their practice of trying to get around the rules,” the U.S. District Judge wrote in her ruling.

Telemarketing Sales Rule

The company was sued by the four states and the federal government in 2009 over allegations that 2 consumer telemarketing laws had been violated when over 55 million illegal calls were made. In the suit accusing Dish Network of violating the Telemarketing Sales Rule and the Telephone Consumer Protection Act, the federal government was demanding for fines totaling $900 million while the four states were seeking over $110 million.

Initially the states had asked for over $23 billion though they lowered the amount after the first phase of the trial last year. A spokesperson for the Department of Justice, Nicole Navas Oxman, admitted that the fines were the biggest-ever in a case involving robocalls.

Subcontractors and contractors

Dish Network laid the blame on subcontractors and contractors for over 90% of the illegal calls. The company said that the rest of the calls were made inadvertently. When Dish discovered the illegal activity it fired the contractors responsible for the illegalities. Bob Toevs, a spokesperson for Dish claimed that the penalties were unfair in comparison with the action taken against other offenders such as Caribbean Cruise Lines, Comcast Corp and DirecTV. Toevs also defended the company saying that it always ensured it complied with telemarketing laws and will continue to do so.