Proposed Order Would Bar Lead Generator From Assisting Calls to DNC Registry Numbers
Lead generator Response Tree and president Derek Doherty would be banned from making or assisting in making robocalls or calls to numbers on the national do not call registry under a proposed DOJ order for permanent injunction filed Tuesday (docket 8:24-cv-00001) in U.S. District Court for Central California in Santa Ana. DOJ's complaint was filed Tuesday in the same court.
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The order settles FTC charges that the defendants operated more than 50 websites designed to “trick consumers” into providing personal information for purported mortgage refinancing loans and other services, the FTC said Tuesday in a news release.
The defendants operate as lead generators collecting, aggregating and selling consumer information, or leads, for profit, alleged the complaint. They sold the personal information of “hundreds of thousands of consumers” without consent to telemarketers who used it to make "millions of illegal telemarketing calls,” pitching solar panels, hearing aids, Social Security disability services and car warranties, it said.
Response Tree, based in Irvine, California, has owned and operated internet domains including PatriotRefi.com, AgedPeopleMeet.com, ClickToWinAChance.com, AbodeDefense.com and TheRetailRewards.com since 2019, said the complaint. The websites were “consent farms” that used deceptive and manipulative “dark patterns” to induce consumers to provide their personal information, “obscuring hard-to-find and inadequate disclosures about how the information would be used,” said the complaint.
The defendants claimed that when consumers provided their personal information, they consented to receive telemarketing calls, the complaint said. Third parties, including intermediaries, sellers and telemarketers who bought the defendants’ leads, “relied on this purported consent” when calling consumers, it said. But purported consent that fails to meet the requirements of the Telemarketing Sales Rule (TSR) is “invalid consent,” it said. Outbound telemarketing calls for which consent is required, including robocalls and calls on the DNR that are placed based on invalid consent, "are illegal under the TSR,” it said.
Defendants sold the data they gathered to “numerous partners or clients,” said the complaint. Their clients typically have been “intermediaries that resell the data” to sellers of goods and services who “inundate consumers with outbound telephone calls,” it said.
Prices for data defendants sell range from less than 1 cent to more than $100 per lead, the complaint said. Defendants sold “aged” leads based on past consumer activity and “real-time” leads available “contemporaneously with the consumer’s activity,” with prices for real-time leads “significantly higher” than older leads, it said. At their peak, defendants had on average 10,000 real-time leads to sell each day; on “exceptional days,” they had up to 50,000 available to sell, it said.
From January 2018 to May 2021, more than 85,000 outbound calls were made to consumers based on the leads and purported consents obtained through defendants' PatriotRefi.com website, nearly all robocalls, the complaint said. More than 55,000 of the calls were made to phone numbers on the DNR, it said.
Defendants also sold leads they misrepresented as having been procured through their consent farm websites, the complaint said. They took consumer data obtained from other sources and “falsified metadata to make it look like the consumer data was obtained through their websites,” it said. “Hundreds of thousands of calls” were made to phone numbers on the DNR based on defendants’ falsified leads, it said.