So a while back I wrote a blog about the extremely dire consequences of violating the TCPA and TSR.

As I reported, not only were a bunch of companies hit for millions in penalties but the individual company owners were also hit with the judgment. And when one of the owners died the FTC went after his estate and sued his daughter– which is just cold blooded AF:

DEATH IS NO ESCAPE: FTC Pursues Lead Generation Company Beyond The Grave as TSR Enforcement Push Smashes All Boundaries

Yeah…

So defendants all appealed. And for the most part they all lost. But the dead guy’s estate walked away clean so there is a lesson here– violate the TCPA/TSR and the only way out… suicide.

Here was the ruling by the Seventh Circuit Court of Appeals in FTC v. Day Pacer, 2025 WL 25217 (7th Cir. 2025):

We agree the defendants are liable and affirm the court on that front. For the companies, there is no genuine dispute of material fact that their practices are prohibited by the regulations, nor that they should have known their actions were deceptive. As for the individuals, all either knew or should have known of the companies’ illegal acts, and all had authority to prevent them.

Ouch. But the court goes on…

But we reverse and remand the decision to substitute an individual defendant’s estate upon his death and the damages award. The Commission’s suit here was a penal action, which never survives a party’s death. 

Interesting, no?

Here is how the Court described the conduct of the “bad guys”:

Day Pacer LLC, and its predecessor EduTrek L.L.C., were companies that generated sales leads. Both purchased consumers’ contact information from websites, usually job-search platforms, where the consumers had entered their information. The companies would then personally call those consumers or contract with other organizations—termed “IBT Partners”—to call them, gauging the consumers’ interest in educational opportunities. If consumers expressed interest, the companies would sell their contact information to for-profit educational institutions.

Sound familiar? This is VERY common behavior for lead generators.

So what’s the issue?

Per the lower court: The court responded that consent given to vendors from whom the companies purchased the information was not sufficient; consumers must consent to each separate caller. Additionally, consumer consent after the call was placed was too late, as callers must have written consent before placing the call.

Hmmm. And what?

Well stay with me.

On appeal the Seventh Circuit found the lead generators were liable for penalties because they could not produce the actual underlying record of consent. They were able to provide urls to the FTC– but those URLs did not actually load webpages as many of them had bee taken down. The failure to provide actual records of consumer consent resulted in the judgment standing.

So it wasn’t that the lead forms were bad– its that the callers could not produce the forms when they needed them!!!

The appellate court also found that all three of the majority owners of the calling defendants had the ability to control their activities and were, therefore, PERSONALLY liable for the amount awarded.

Couple of pieces of good news for the defendants though:

1. Although the lower court had awarded over $28MM in penalties the appellate court found this amount was arrived at in error because the defendant’s ability to pay was not considered– that might mean a big reduction in the judgment on remand;
2. The Court found the FTC penalties were penal in nature and did NOT survive death. That means when one of the guys who owned the lead generation company died the FTC could not pursue his estate. So the court erred in letting the FTC pursue the dead guy’s daughter as administrator.

Obviously a massive ruling here.

Notice– these guys were not true scumbags. They thought they were calling with consent and there was no finding of any sort of fraud. Their “crime” was not being able to produce consent records– and now they are all out of business and being chased for millions of dollars.

If you are a lead generator or call center you MUST MUST MUST take possession of consent records. Do NOT just get a data push from somebody and think you’re safe! And the new one-to-one rule has massive implications here– don’t get killed!

We will keep an eye on this case on remand and report ASAP when something else breaks.