Dish Network’s Illegal Robocalls Cost It $280 Million

[Photo credit: TechNev16]

SPRINGFIELD, Ill. (CN) — Fining Dish Network $280 million for illegal robocalls, a federal judge said the satellite TV service “sowed the wind and reaped the whirlwind when it decided to hire anybody that could get on the phone and bring in activations by whatever means possible.”

In a “Moby Dick”-size 475-page ruling, U.S. District Judge Sue Myerscough, from the Central District of Illinois, levied the fine for Dish’s making more than 54 million telemarketing robocalls to customers on the Do Not Call registry.

“Part of that whirlwind was the millions and millions of illegal calls in violation of the TSR [Telemarketing Sales Rule],” Myerscough wrote,.

Dish Network, which has more than 13 million subscribers, hired numerous contractors to make marketing calls for it from 2007 to 2010, but always retained extensive authority over the marketing services, even to the point of providing scripts to its telemarketers.

“The after-the-fact, self-serving testimony by several Dish witnesses to the contrary is not credible and does not disprove the actual control exerted by Dish,” Myerscough found.

Because the contractors were employed as agents of Dish, Dish was responsible for the marketers’ failure to exclude numbers listed on the national Do Not Call registry from its call lists. It knowingly failed to do so.

“Dish personnel knew that Dish could not call persons on the lead tracking system if the telephone number was on the registry. Dish had the burden to show that it had an inquiry-based established business relationship to avoid liability. Dish failed to meet its burden of proof,” Myerscough wrote.

Of the $280 million, $168 million will go to the federal government, the rest to California, Illinois, North Carolina, and Ohio, to settle state law violations.

Maureen Ohlhausen, acting FTC chairwoman, praised the ruling. “The outcome of this case shows companies will pay a hefty price for violating consumers’ privacy with unwanted calls,” Ohlhausen said in a statement.

The fine amounts to $5.18 for each illegal robocall.

Dish said it will appeal.

“The penalties awarded in this case radically and unjustly exceed, by orders of magnitude, those found in the settlements in similar actions,” Dish said in a statement.

Yet Myerscough substantially Dish’s liability, which under federal and state laws could have come to $727 billion.

Myerscough said a $1 billion fine would be excessive, and that a fair penalty would cost Dish about 20 percent of its 2016 after-tax profits, or $280 million.

“Dish’s plea of poverty borders on the preposterous,” Myerscough said. “Dish has made net after-tax profits of $700 million to $1.5 billion annually for the past several years. Dish cannot avoid liability because its current business plan calls for buying illiquid assets in the form of broadband spectrum.”

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