Estimated read time: 3-4 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
SALT LAKE CITY — Three Utah-based companies that promote family films have come under federal scrutiny for allegedly deceptive telemarketing campaigns, including 16 million calls to numbers on the National Do Not Call Registry.
The Department of Justice filed a complaint Monday in U.S. District Court in Florida against Feature Films for Families Inc., Corporations for Character L.C., and Family Films of Utah.
In the meantime, Corporations for Character, a telemarketing firm known as C4C, filed a lawsuit last Friday in U.S. District Court in Utah against the Federal Trade Commission, which initiated the DOJ complaint.
Both lawsuits are the culmination of a two-year dispute between the agency and the companies.
"The FTC has demonstrated an institutional hostility toward companies and charities that use the phone," according to a statement attorney Matthew Cooper released for Feature Film for Families and C4C.
According to the DOJ complaint, the companies conducted a nationwide telephone campaign under the name Kids First, in which they offered to send two complimentary DVDs and requested feedback on whether the movies should be included on a list of recommended films. However, the telemarketers did not disclose that those who agreed to participate would later receive calls pitching DVDs produced by the companies.
Moreover, the defendants’ telemarketers allegedly told consumers that “all of the proceeds of this fundraiser will help us finish up creating this recommended viewing list to help parents and grandparents, like us, with a list we can trust," the DOJ alleges.
In fact, the organization responsible for the Kids First recommended viewing list — the Coalition for Quality Children’s Media — did not receive all the proceeds. The complaint alleges that the three companies received at least 93 percent of the DVD sales.
Furthermore, the DOJ contends the companies have made more than 16 million calls to numbers on the National Do Not Call Registry since 2007.
In its lawsuit against the FTC, C4C argues the calls were exempt from the registry because they were issue advocacy and solicitations for charitable contributions. The suit claims that the FTC fails to disclose that charities are not subject to the do-not-call law.
"This misinformation campaign by the FTC has a chilling effect on charitable donations because it fosters a belief in consumers that charities are dishonest and breaking the law when they attempt to fundraise using the telephone, even though telephone calls seeking charitable donations are perfectly legal," the lawsuit states.
Feature Films for Families produces and distributes movies that don't contain violence, nudity, or profanity and promote traditional family values.
Like many of C4C’s nonprofit clients, Feature Films feels strongly about getting its message to the public.
"They rely on the telephone to do that," according to Cooper. "They believe the First Amendment protects their right to do so."
The Utah companies say they're confident they can show their compliance with the law in court.
The DOJ seeks a court order to permanently bar them from soliciting, civil penalties, which could be $16,000 per phone call, and repayment of their "ill-gotten gains."
Email:dromboy@ksl.com
