Happy New Year on this first official working Monday of 2024. I don’t know about you, but I am ready to carry the momentum of 2023 into 2024, let’s go! With that, we are jumping into the recent DOJ filing at the direction of the FTC against lead generator Response Tree LLC and Derek Doherty, the company president. New Year, New FTC Enforcement!

The 24-page complaint seeking a permanent injunction, civil penalties, and other relief against Response Tree LLC for its alleged participation in operating a “consent farm”, falsifying leads, and using dark patterns. If you recall from the FTC Operation Stop Scam Calls conference held in July and their initiatives, “consent farms” being one of them, then the DOJ’s filing should come as no surprise. The FTC wrote a whole blog about the topic of “consent farms” and TCPAWorld brought coverage of the conference that was held with the FTC, FCC, and state AGs announcing their telemarketing enforcement sweeps and they are keeping good on their word. Once the proposed order to settle the complaint is approved, Doherty and his company are BANNED essentially from the lead gen industry with a potential 7 million dollar fine, suspended for now, so long as the company and Doherty are truly financially destitute as they claim to be. The FTC has requested bank records for review to verify the inability to pay and if it is discovered that is not the case, the 7 million will be due and payable immediately. Ouch!

A few excerpts from the FTC’s consent farm blog that may help set the stage for their action against response Tree LLC and its president:

• If you’re part of the telemarketing ecosystem and you engage in illegal activity – or lend a hand to others who violate the law – the Telemarketing Sales Rule covers your conduct. Consent farm lead generators and VoIP service providers, we’re talking to you. We’re also talking to other businesses and individuals who grease the wheels for those who place the calls and to the companies that use their services.
• The Telemarketing Sales Rule requires that robocallers themselves must get consent directly from the person they’re calling. You can’t just take the word of a vendor. What’s more, it has to be “express informed consent” – not something manufactured, fabricated, or obtained through trickery or deceit. That’s why the illegal operations of consent farms must be plowed under immediately.

The complaint outlines Response Tree LLC as having approximately 50 websites which it ran from 2019 until 2023 that operated as consent farms deceptively obtaining consumer information and selling the data for profit, anywhere from less than a penny to over one hundred dollars per lead. Orchestrated with deceptive websites, flimsy TCPA consent language, and a little bit of bait-and-switch to trick consumers out of their personal information all for the financial gain of Response Tree LLC.

In the example provided in the complaint, consumers were visiting a website claiming to provide mortgage refinance services requiring them to submit their contact information to “GET YOUR FAST FREE QUOTE”. Once consumers submitted their contact information most were never provided with a mortgage quote and their information was sold off to Response Tree LLC’s clients many of which did not provide similar services but rather used robocalls to contact consumers about solar panels, hearing aids, auto warranties, and social security disability services. The complaint states that “Defendants’ method of acquiring consent does not evidence the requisite willingness of consumers to receive calls delivering prerecorded messages “by or on behalf of a specific seller,” as required by the TSR, 16 C.F.R. § 310.4(b)(1)(v)(A)(iii) (emphasis added), and does not clearly evidence that “the seller obtained the express agreement” to place calls “by or on behalf a specific party” to consumers whose telephone numbers are registered with the National Do Not Call Registry, as required by the TSR, 16 C.F.R. § 310.4(b)(1)(iii)(B)(1)(emphases added)”

In addition to the deceptive nature that Response Tree LLC used to capture consumer information, there were also issues with the website disclosures, the size of the disclaimer language and partner list, along with linking privacy policies that expanded what the consumer was consenting to and who would be contacting them. Esh…

Response Tree LLC sold falsified data it claimed to have obtained on its owned and operated sites, however, it did not stand up those websites that it had claimed to have obtained the consumer information on until AFTER it had sold the consumer leads to clients. What the what!

Remember the FTC will file complaints when it has “reason to believe” that someone is violating or about to violate the law. You can read the complaint here.