Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 1 of 41

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

Case No.12-CV-61872-SCOLA/SNOW

FEDERAL TRADE COMMISSION,

Plaintiff,

PRIME LEGAL PLANS LLC, et aL,

Defendants,

and

THE 2007 SAN LAZARO IRREVOCABLE

LIFE INSURANCE TRUST, et al.,

Relief Defendants.

STIPULATED FINAL JUDGMENT AND ORDER FOR PERMANENT

INJUNCTION AND MONETARY RELIEF AS TO DEFENDANT KIM E. LANDOLFI

Plaintiff Federal Trade Commission ("FTC") commenced this civil action on September

24, 2012, pursuant to Sections l3(b) and 19 of the Federal Trade Commission Act ("FTC Act"),

15 U .S.C. §§ 53(b) and 57b, the Telemarketing and Consumer Fraud and Abuse Prevention Act

("Telemarketing Act"), 15 U.S.C. § 6101 et seq., and the 2009 Omnibus Appropriations Act,

Public Law 111 -8, Section 626, 123 Stat. 524, 678 (Mar. I 1, 2009) (" Omnibus Act"), as clarified

by the Credit Card Accountability Responsibility and Disclosure Act of2009, Public Law 11124, Section 511 , 123 Stat. 1734, 1763-64 (May 22, 2009) (" Credit Card Act"), and amended by

the Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111-203, Section

1097, 124 Stat. 1376, 2102-03 (July 21, 2010) ("Dodd-Frank Act"), 12 U.S.C. § 5538, to obtain

preliminary and permanent injunctive and other equitable relief for Defendants' violations of

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Section 5(a) ofthe FTC Act, 15 U.S.C. § 45(a), the FTC' s Telemarketing Sales Rule ("TSR"), 16

C.F.R. Part 310, and the Mortgage Assistance Relief Services Rule ("MARS Rule"), 16 C.F.R.

Part 322, recodified as Mortgage Assistance ReliefServices (Regulation 0), 12 C.F.R. Part 1015

("Regulation 0 "), in connection with the marketing and sale of mortgage assistance relief

services. The FTC and defendant Kim E. Landolfi hereby stipulate to entry of this Final

Judgment and Order for Permanent Injunction and Monetary Relief as to Defendant Kim E.

Landolfi.

FINDINGS

By stipulation of the parties and being advised of the premises, the Court finds:

This is an action by the FTC instituted under Sections 5, 13(b), and 19 of the FTC Act, 15

U.S.C. §§ 45, 53(b) and 57b, the Telemarketing Act, 15 U.S.C. § 6101 et seq., and the

Omnibus Act as clari tied by Section 5 I 1 of the Credit Card Act. The Complaint seeks

both permanent injunctive relief and equitable monetary relief for Defendants' alleged

deceptive acts or practices as alleged therein.

The FTC has the authority under Sections I 3(b) and 19 of the FTC Act to seek the relief

it has requested, and the Complaint states a claim upon which relief can be granted

against Settling Defendant.

This Court has jurisdiction over the subject matter of this case and has jurisdiction over

Settling Defendant. Venue in the Southern District of Florida is proper.

The activities of Settling Defendant, as alleged in the Complaint, are in or affecting

commerce, as defined in Section 4 of the FTC Act, 15 U.S.C. § 44.

The FTC and Settling Defendant stipulate and agree to entry of this Order, without trial

or final adjudication of any issue of fact or law, to settle and resolve all matters in dispute

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arising from the conduct alleged in the Complaint to the date of entry of this Order. This

settlement does not settle and resolve any matters not alleged in the Complaint. Settling

Defendant neither admits nor denies any of the allegations in the Complaint, except as

specifically stated in this Order. Only for purposes of this action, Settling Defendant

admits the facts necessary to establish jurisdiction.

Settling Defendant waives all rights to seek judicial review or otherwise challenge or

contest the validity of this Order. Settling Defendant also waives any claim that she may

have held under the Equal Access to Justice Act, 28 U.S.C. § 2412, concerning the

prosecution of this action to the date of this Order. Each settling party shall bear its own

costs and attorneys' fees.

This action and the relief awarded herein are in addition to, and not in lieu of, other

remedies as may be provided by law, including both civil and criminal remedies.

Entry of this Order is in the public interest.

DEFINITIONS

For the purposes of this Order, the following definitions shall apply:

"Assisting others" includes, but is not limited to:

performing customer service functions, including, but not limited to, receiving or

responding to consumer complaints;

formulating or providing, or arranging for the formulation or provision of, any

advertising or marketing material, including, but not limited to, any telephone

sales script, direct mail solicitation, or the design, text, or use of images of any

Internet website, email, or other electronic communication;

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formulating or providing, or arranging for the formulation or provision of, any

marketing support material or service, including but not limited to, web or

Internet Protocol addresses or domain name registration for any Internet websites,

affiliate marketing services, or media placement services;

providing names of, or assisting in the generation of, potential customers;

performing marketing, billing, or payment services of any kind; and

acting or serving as an owner, officer, director, manager, or principal of any

entity.

"Competent and reliable evidence" means tests, analyses, research, studies, or other

evidence based on the expertise of professionals in the relevant area, that has been

conducted and evaluated in an objective manner by persons qualified to do so, using

procedures generally accepted in the profession to yield accurate and reliable results.

"Corporate Defendants" means Prime Legal Plans LLC; Consumer Legal Plans LLC

(Nevada); Consumer Legal Plans, LLC (Wyoming), also d/b/a CLP Associates; Freedom

Legal Plans LLC; Frontier Legal Plans LLC; Reaching U Network, Inc., also d/b/a Legal

Billing Services, Legal Servicing Partners, Forensic Auditor Services, 123 Save Our

Home, Save Our Home Plan, Home Savers, Legal Network Association, and

Homeowners Rescue Mission; 123 Save a Home, Inc.; American Hardship LLC; Back

Office Support Systems LLC; and Consumer Acquisition Network, LLC, also d/b/a

Consumer Legal Network, Legal Servicing & Billing Partners, Forensic Auditor

Services, Telefunding Services, Mortgagesavers.org, First Capital Land Trust, and

Florida Land Trust Consultants; Legal Servicing and Billing Partners LLC and their

successors and assigns.

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"Customer" means any person who has paid, or may be required to pay, for products,

services, plans, or programs offered for sale or sold by any other person.

" Debt relief product or service" means any product, service, plan, or program

represented, expressly or by implication, to renegotiate, settle, or in any way alter the

terms of payment or other terms of the debt or obligation, including but not limited to a

tax debt or obl igation, between a person and one or more unsecured creditors or debt

collectors, including but not limited to, a reduction in the balance, interest rate, or fees

owed by a person to an unsecured creditor or debt collector.

" Defendants" means all of the [ndividual Defendants and the Corporate Defendants,

individually, collectively, or in any combination.

"Established business relationship" means a relationship between the seller and a

person based on: (a) the person ' s purchase, rental, or lease of the seller's goods or

services or a financial transaction between the person and seller, within the eighteen ( 18)

months immediately preceding the date of the telemarketing call; or (b) the person's

inquiry or application regarding a product or service offered by the seller, within the three

(3) months immediately preceding the date of a telemarketing call.

"Federal homeowner relief or financial stability program" means any program

(including its sponsoring agencies, telephone numbers, and internet websites) operated or

endorsed by the United States government to provide relief to homeowners or stabilize

the economy, including but not limited to:

the Making Home Affordable Program;

the Financial Stability Plan;

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the Troubled Asset Relief Program and any other program sponsored or operated

by the United States Department of the Treasury;

the HOPE for Homeowners program, any program operated or created pursuant to

the Helping Families Save Their Homes Act, and any other program sponsored or

operated by the Federal Housing Administration; or

any program sponsored or operated by the United States Department of Housing

and Urban Development ("HUD"), the HOPE NOW Alliance, the

Homeownership Preservation Foundation, or any other HUD-approved housing

counseling agency.

"Financial-related product or service" means any product, service, plan, or program

represented, expressly or by implication, to:

provide any consumer, arrange for any consumer to receive, or assist any

consumer in receiving, credit, debit, or stored value cards;

improve, or arrange to improve, any consumer's credit record, credit history, or

credit rating;

provide advice or assistance to any consumer with regard to any activity or

service the purpose of which is to improve a consumer's credit record, credit

history, or credit rating;

provide any consumer, arrange for any consumer to receive, or assist any

consumer in receiving a loan or other extension of credit; or

provide any consumer, arrange for any consumer to receive, or assist any

consumer in receiving any service represented, expressly or by implication, to

renegotiate, settle, or in any way alter the terms of payment or other terms of any

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debt or obligation (other than a debt or obligation secured by a mortgage on a

consumer's dwelling), including but not limited to a tax debt or obligation,

between a consumer and one or more secured creditors, servicers, or debt

collectors.

10.

"Individual Defendants" means Lazaro Dinh, a/k/a Mario Lazaro Sopena a!kla Lazaro

Sopena; Kim E. Landolfi; Derek B. Radzikowski; Andrew Primavera; Christopher N.

Edwards; and Jason C. Desmond.

11.

"Material fact" means any fact likely to affect a person's choice of, or conduct

regarding, goods or services.

12.

"Mortgage assistance relief product or service" means any product, service, plan, or

program, offered or provided to a consumer in exchange for consideration, that is

represented, expressly or by implication, to assist or attempt to assist the consumer with

any of the following:

stopping, preventing, or postponing any mortgage or deed of trust foreclosure sale

for the consumer's dwelling, any repossession of the consumer's dwelling, or

otherwise saving the consumer's dwelling from foreclosure or repossession;

negotiating, obtaining, or arranging a modification of any term of a dwelling loan,

including a reduction in the amount of interest, principal balance, monthly

payments, or fees;

obtaining any forbearance or modification in the timing of payments from any

dwelling loan holder or servicer on any dwelling loan;

negotiating, obtaining, or arranging any extension of the period of time within

which the consumer may (i) cure his or her default on a dwelling loan, (ii)

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reinstate his or her dwelling Joan, (iii) redeem a dwelling, or (iv) exercise any

right to reinstate a dwelling loan or redeem a dwelling;

obtaining any waiver of an acceleration clause or balloon payment contained in

any promissory note or contract secured by any dwelling; or

negotiating, obtaining, or arranging (i) a short sale of a dwelling, (ii) a deed-inlieu of foreclosure, (iii) or any other disposition of a dwelling other than a sale to

a third party that is not the dwelling loan holder.

The foregoing shall include any manner of claimed assistance, including, but not limited

to, auditing or examining a consumer's mortgage or home loan application and offering

to provide or providing legal services, or offering to sell a consumer a plan or

subscription to a service that provides such assistance.

13.

"Na tiona I Do Not Call Registry" means the National Do Not Call Registry, which is the

"do-not-call" registry maintained by the Commission pursuant to 16 C.F .R. §

31 0.4(b)( 1)(i ii)(B).

14.

"Outbound telephone call" means a telephone call initiated by a telemarketer to induce

the purchase of goods or services or to solicit a charitable contribution.

15.

"Person" means any natural person, organization, or other legal entity, including a

corporation, partnership, proprietorship, association, cooperative, or any other group or

combination acting as an entity.

16.

"Seller" means any person who, in connection with a telemarketing transaction,

provides, offers to provide, or arranges for others to provide goods or services to the

customer in exchange for consideration whether or not such person is under the

jurisdiction of the Commission.

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17.

"Settling Defendant" shall mean Kim E. Landolfi.

18.

"Telemarketer" means any person who, in connection with telemarketing, initiates or

receives telephone calls to or from a customer or donor.

19.

"Telemarketing" means a plan, program, or campaign which is conducted to induce the

purchase of goods or services or a charitable contribution, by use of one or more

telephones and which involves more than one interstate telephone call. The term does

not include the solicitation of sales through the mailing of a catalog which: contains a

written description or illustration of the goods or services offered for sale; includes the

business address ofthe seller; includes multiple pages of written material or illustrations;

and has been issued not less frequently than once a year, when the person making the

solicitation does not solicit customers by telephone but only receives calls initiated by

customers in response to the catalog and during those calls takes orders only without

further solicitation. For purposes of the previous sentence, the term "further solicitation"

does not include providing the customer with information about, or attempting to sell,

any other item included in the same catalog which prompted the customer's call or in a

substantially similar catalog.

20.

"Telemarketing Sales Rule" means the FTC Rule entitled "Telemarketing Sales Rule,"

16 C.F .R. Part 310, attached hereto as Appendix A or as may be hereafter amended.

ORDER

BAN ON MORTGAGE ASSISTANCE RELIEF PRODUCTS OR SERVICES

IT IS THEREFORE ORDERED that Settling Defendant, whether acting directly or

through any other person, is permanently restrained and enjoined from:

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Advertising, marketing, promoting, offering for sale, or selling any mortgage

assistance relief product or service; and

Assisting others engaged in advertising, marketing, promotion, offering for sale,

or selling any mortgage assistance relief product or service.

BAN ON DEBT RELIEF PRODUCTS AND SERVICES

II.

IT IS FURTHER ORDERED that Settling Defendant, whether acting directly or

through any other person, is permanently restrained and enjoined from:

Advertising, marketing, promoting, offering for sale, or selling any debt relief

product or service; and

Assisting others engaged in advertising, marketing, promoting, offering for sale,

or selling any debt relief product or service.

PROHIBITED MISREPRESENTATIONS RELATING TO FINANCIAL RELATED

PRODUCTS OR SERVICES

III.

IT IS FURTHER ORDERED that Settling Defendant and her officers, agents, servants,

employees, and attorneys, and those persons or entities in active concert or participation with any

of them who receive actual notice of this Order by personal service, facsimile transmission,

email, or otherwise, whether acting directly or through any corporation, subsidiary, division, or

other device, in connection with the advertising, marketing, promotion, offering for sale, or sale

of any financial related product or service, are hereby permanently restrained and enjoined from:

Misrepresenting or assisting others in misrepresenting, expressly or by

implication, any material fact, including but not limited to:

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The terms or rates that are available for any loan or other extension of

credit, including but not limited to:

closing costs or other fees;

the payment schedule, the monthly payment amount(s), or other

payment terms, or whether there is a balloon payment; interest

rate(s), annual percentage rate(s), or finance charge; the loan

amount, the amount of credit, the draw amount, or outstanding

balance; the loan term, the draw period, or maturity; or any other

term of credit;

the savings associated with the credit;

the amount of cash to be disbursed to the borrower out of the

proceeds, or the amount of cash to be disbursed on behalf of the

borrower to any third parties;

whether the payment of the minimum amount specified each

month covers both interest and principal, and whether the credit

has or can result in negative amortization;

that the credit does not have a prepayment penalty or that no

prepayment penalty and/or other fees or costs will be incurred if

the consumer subsequently refinances; and

that the interest rate(s) or annual percentage rate(s) are fixed rather

than adjustable or adjustable rather than fixed;

Any person's ability to improve or otherwise affect a consumer's credit

record, credit history, credit rating, or ability to obtain credit;

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That any person can improve any consumer's credit record, credit history,

or credit rating by permanently removing negative information from the

consumer' s credit record, credit history, or credit rating, even where such

information is accurate and not obsolete;

That any person can obtain a reduction of any secured tax debt by

renegotiating, settling, or in any other way altering the terms of a debt

owed to any taxing entity; or

That a consumer will receive legal representation.

Advertising or assisting others in advertising credit terms other than those terms

that actually are or will be arranged or offered by a creditor or lender.

PROHIBITED MISREPRESENTATIONS

RELATING TO ANY PRODUCTS OR SERVICES

IV.

IT IS FURTHER ORDERED that Settling Defendant and her officers, agents, servants,

employees, and attorneys, and those persons or entities in active concert or participation with any

of them who receive actual notice ofthis Order by personal service, facsimile transmission,

email, or otherwise, whether acting directly or through any corporation, subsidiary, division, or

other device, in connection with the advertising, marketing, promotion, offering for sale, or sale

of any product, service, plan, or program are hereby permanently restrained and enjoined from

misrepresenting or assisting others in misrepresenting, expressly or by implication, any material

fact, including but not limited to:

Any material aspect of the nature or terms of any refund, cancellation, exchange,

or repurchase policy, including, but not limited to, the likelihood of a consumer

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obtaining a full or partial refund, or the circumstances in which a fu ll or partial

refund will be granted to the consumer;

That any person is affiliated with, endorsed or approved by, or otherwise

connected to any other person; government entity; any federa l homeowner relief

or financial stability program; public, non-profit, or other non-commercial

program; or any other program;

That they themselves provide the product, service, plan, or program;

That any person providing a testimonial has purchased, received, or used the

product, service, plan, or program;

That the experience represented in a testimonial of the product, service, plan, or

program represents the person's actual experience resulting from the use of the

product, service, plan, or program under the circumstances depicted in the

advertisement;

The total costs to purchase, receive, or use, or the quantity of, the product, service,

plan, or program;

Any material restriction, limitation, or condition on purchasing, receiving, or

using the product, service, plan, or program; or

Any material aspect of the performance, efficacy, nature, or characteristics of the

product, service, plan, or program.

SUBSTANTIATION FOR BENEFIT,

PERFORMANCE, AND EFFICACY CLAIMS

IT IS FURTHER ORDERED that Settling Defendant and her officers, agents, servants,

employees, and attorneys, and those persons or entities in active concert or participation with any

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of them who receive actual notice of this Order by personal service, facsimile transmission,

email, or otherwise, whether acting directly or through any corporation, subsidiary, division, or

other device, in connection with the advertising, marketing, promotion, offering for sale, or sale

of any financial related product or service are hereby permanently restrained and enjoined from

making any representation or assisting others in making any representation, expressly or by

implication, about the benefits, performance, or efficacy of any financial related product or

service, unless at the time such representation is made, Settling Defendant possesses and relies

upon competent and reliable evidence that substantiates that the representation is true.

PROHIBITION AGAINST ABUSIVE TELEMARKETING PRACTICES

VI.

IT IS ORDERED that, in connection with telemarketing, Settling Defendant and her

officers, agents, servants, employees, and attorneys, and those persons or entities in active

concert or participation with any of them who receive actual notice of this Order by personal

service, facsimile transmission, email, or otherwise, whether acting directly or through any

corporation, subsidiary, division, or other device, are hereby permanently restrained and enjoined

from engaging in, causing other persons to engage in, and assisting other persons to engage in,

violations of the Telemarketing Sales Rule, including, but not limited to:

Initiating any outbound telephone call to any person at a telephone number on the

National Do Not Call Registry unless the seller proves that:

the seller has obtained the express agreement, in writing, of such person to

place calls to that person. Such written agreement shall clearly evidence

such person's authorization that calls made by or on behalf of a specific

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party may be placed to that person, and shall include the telephone number

to which the calls may be placed and the signature of that person; or

the seller has an established business relationship with such person and

that person has not previously stated that he or she does not wish to

receive outbound telephone calls made by or on behalf of the seller;

Initiating any outbound telephone call to a telephone number within a given area

code when the annual fee for access to the telephone numbers within that area

code that are on the National Do Not Call Registry has not been paid by or on

behalf of the seller on whose behalf the telephone call is made, unless the

telephone call is:

a solicitation to induce charitable contributions;

to a business; or

on behalf of a seller who initiates, or causes others to initiate, telephone

calls solely to (i) persons who have given the seller their express

agreement, in writing and signed, to receive calls from that seller, or (ii)

persons who have an established business relationship with that seller

pursuant to 16 C.F.R. § 31 0.2(o);

Provided, however, that if the Commission promulgates rules that modify or supersede the

Telemarketing Sales Rule, in whole or part, Defendants shall comply fully and completely with

all applicable requirements thereof, on and after the effective date of any such rules.

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PROIDBITION AGAINST DISCLOSING CONSUMER INFORMATION

VII.

IT IS FURTHER ORDERED that Settling Defendant and her officers, agents, servants,

employees, and attorneys, and those persons or entities in active concert or participation with her

who receive actual notice of this Order by personal service or otherwise, whether acting directly

or through any corporation, subsidiary, division, or other device, are hereby permanently

restrained and enjoined from:

Disclosing, using, or benefitting from consumer information, including the name,

address, telephone number, email address, social security number, other

identifying information, or any data that enables access to a consumer' s account

(including a credit card, bank account, or other fmancial account) of any person

that Settling Defendant obtained prior to entry of this Order in connection with

the advertising, marketing, promotion, offering for sale, sale, or provision of any

financial-related product or service, and

Failing to dispose of such consumer information in all forms in Settling

Defendant' s possession, custody, or control within thirty (30) days after the Court

has entered a final order as to all Defendants, or within fifteen (15) days after a

written request made to Settling Defendant by the FTC, whichever is sooner.

Disposal shall be by means that protect against unauthorized access to the

consumer information, such as by burning, pulverizing, or shredding any papers,

and by erasing or destroying any electronic media, to ensure that the consumer

information cannot practicably be read or reconstructed.

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Provided, however, that consumer information need not be disposed of, and may be disclosed, to

the extent requested by a government agency or required by a law, regulation, or court order.

MONETARY RELIEF

VIII.

IT IS FURTHER ORDERED that:

A. Judgment is hereby entered in favor of the Commission and against Settling

Defendant Kim E. Landolfi in the amount of ONE HUNDRED TWO THOUSAND

FOUR HUNDRED SEVENTEEN DOLLARS ($1 02,417) as equitable monetary

relief, provided, however, that, subject to the provisions of Section IX ("Right to

Reopen") of this Order, this judgment shall be suspended, upon completion of the

following:

I. Bank of America shall transfer to the FTC or its designated agent within

ten ( l 0) business days of the date of receipt of this Order all funds held in

account number ending in 3604 in the name of Kim Landolfi.

2. Bank of America shall transfer to the FTC or its designated agent within

ten ( 10) business days of the date of receipt of this Order all funds held in

account number ending in 6243 in the name of Kimmycorp, LLC.

3. Bank of America shall transfer to the FTC or its designated agent within

ten (1 0) business days of the date of receipt of this Order all funds held in

account number ending in 6744 in the name of Kimmycorp, LLC.

4. Bank of America shall transfer to the FTC or its designated agent within

ten ( 10) business days of the date of receipt of this Order all funds held in

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account number ending in 60 ll in the name of Strong Investment Group,

LLC.

5. Suntrust Bank shall transfer to the FTC or its designated agent within ten

(1 0) business days of the date of receipt of this Order all funds held in

account number ending in 5273 in the name of Kim Landolfi.

6. Laidlaw & Company shall liquidate the assets held in account number

2315 in the name of Kim Landolfi and transfer to the FTC or its

designated agent within ten (1 0) business days of the date of receipt of this

Order the net proceeds of that account, which shall mean all funds after

payment of the margin loan on the account.

Any funds received by the FTC pursuant to this Section shall be deposited into a

fund administered by the FTC or its agent to be used for equitable relief,

including but not limited to consumer redress and any attendant expenses for the

administration of any redress funds. In the event that direct redress to consumers

is wholly or partially impracticable or funds remain after redress is completed, the

FTC may apply any remaining funds for such other equitable relief, including but

not limited to consumer information remedies, as the FTC determines to be

reasonably related to the practices alleged in the Complaint. Any funds not used

for such equitable relief shall be deposited to the U.S. Treasury as equitable

disgorgement. Settling Defendant shall have no right to challenge the FTC ' s

choice of remedies or the manner of distribution.

Settling Defendant relinquishes all dominion, control, and title to the funds paid to

the fullest extent permitted by law. Settling Defendant shall make no claim to or

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demand for return of the funds, directly or indirectly, through counsel or

otherwise.

Settling Defendant agrees that the facts as alleged in the Complaint filed in this

action shall be taken as true without further proof in any bankruptcy case or

subsequent civil litigation pursued by the FTC to enforce its rights to any payment

or money judgment pursuant to this Order, including but not limited to a

nondischargeability complaint in any bankruptcy case. Settling Defendant further

stipulates and agrees that the facts alleged in the Complaint establish all elements

necessary to sustain an action by the FTC pursuant to Section 523(a)(2)(A) of the

Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and that this Order shall have

collateral estoppel effect for such purposes.

The judgment entered pursuant to this Section is equitable monetary relief, solely

remedial in nature, and not a fine, penalty, punitive assessment or forfeiture.

Upon request, Settling Defendant is hereby required, in accordance with 31

U.S.C. § 7701, to furnish to the FTC her tax identification numbers, which shall

be used for purposes of collecting and reporting on any delinquent amount arising

out of this Order.

Pursuant to Section 604(1) of the Fair Credit Reporting Act, 15 U.S.C. §

1681 b( 1), any consumer reporting agency may furnish a consumer report

concerning Settling Defendant to the FTC, which shall be used for purposes of

collecting and reporting on any delinquent amount arising out of this Order.

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RIGHT TO REOPEN

IX.

IT IS FURTHER ORDERED that the FTC' s agreement to, and the Court' s approval of,

this Order is expressly premised on the truthfulness, accuracy and completeness of Settling

Defendant's financial statements previously submitted to the FTC. If, upon motion by the FTC,

the Court finds that the financial statement of Settling Defendant contains any material

misrepresentation or omission, the judgment entered in Section VIII of this Order shall be

reinstated and become immediately due and payable as to such Settling Defendant; provided,

however, that in all other respects this Order shall remain in full force and effect unless otherwise

ordered by the Court; and, provided further, that proceedings instituted under this provision

would be in addition to, and not in lieu of, any other civil or criminal remedies as may be

provided by law, including any other proceedings that the FTC may initiate to enforce this Order.

For purposes of this Section, Settling Defendant waives any right to contest any of the

allegations in the Complaint.

ASSET FREEZE

IT IS FURTHER ORDERED that, upon entry of this Order and the satisfaction of all

payments identified in Section VIII above, the freeze of the Settling Defendant's personal assets

shall be dissolved.

COOPERATION WITH FTC

XI.

IT IS FURTHER ORDERED that Settling Defendant shall, in connection with this

action or any subsequent investigation or litigation related to or associated with the transactions

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Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 21 of 41

or the occurrences that are the subject of the FTC ' s Complaint as it may be amended, cooperate

in good faith with the FTC and appear at such places and times as the FTC shall reasonably

request, after written notice, for interviews, conferences, pretrial discovery, review of

documents, and for such other matters as may be reasonably requested by the FTC. If requested

in writing by the FTC, Settling Defendant shall appear and provide truthful testimony in any

trial , deposition, or other proceeding related to or associated with the transactions or the

occurrences that are the subject of the Complaint as it may be amended, without the service of a

subpoena, provided, however, that Settling Defendant sha ll be entitled to receive any witness

fees and expenses allowable pursuant to Federal Rule of Civi l Procedure 45.

ORDER ACKNOWLEDGMENTS

XII.

IT IS FURTHER ORDERED that Settling Defendant obtain acknowledgments of

receipt of this Order:

Settling Defendant, within 7 days of entry of this Order, must submit to the FTC an

acknowledgment of receipt ofthjs Order sworn under penalty of perjury.

For 5 years after entry of this Order, Settling Defendant for any business that

Settling Defendant, indiv idually or collectively with any other Defendant, is the majority

owner or directly or indirectly controls, must deliver a copy of this O rder to: (1) all

principals, officers, directors, and managers; (2) all employees, agents, and

representatives who participate in conduct related to the subject matter of the Order; and

(3) any business entity resulting from any change in structure as set forth in the Section

titled Compliance Reporting. Delivery must occur within 7 days of entry of this Order

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Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 22 of 41

for current personnel. To all others, delivery must occur before they assume their

responsibilities.

From each individual or entity to which Settling Defendant delivered a copy of this

Order, Settling Defendant must obtain, within 30 days, a signed and dated

acknowledgment of receipt of this Order.

COMPLIANCE REPORTING

XIII.

IT IS FURTHER ORDERED that Settling Defendant make timely submissions to the

FTC:

One year after entry of this Order, Settling Defendant must submit a compliance report,

sworn under penalty of perjury.

The Settling Defendant must: (a) designate at least one telephone number and an

email, physical, and postal address as points of contact, which representatives of

the FTC may use to communicate with the Settling Defendant; (b) identify all of

the Settling Defendant's businesses by all of their names, telephone numbers, and

physical, postal, email, and Internet addresses; (c) describe the activities of each

business, including the products and services offered, the means of advertising,

marketing, and sales, and the involvement of any other Defendant (which the

Settling Defendant must describe if he knows or should know due to his own

involvement); (d) describe in detail whether and how the Settling Defendant is in

compliance with each Section of this Order; and (e) provide a copy of each Order

Acknowledgment obtained pursuant to this Order, unless previously submitted to

the FTC;

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Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 23 of 41

Additionally, the Settling Defendant must: (a) identify all telephone numbers and

all email, Internet, physical, and postal addresses, including all residences; (b)

identify all titles and roles in all business activities, including any business for

which the Settling Defendant performs services whether as an employee or

otherwise and any entity in which the Settling Defendant has any ownership

interest; and (c) describe in detail the Settling Defendant's involvement in each

such business, including title, role, responsibilities, participation, authority,

control, and any ownership.

For 10 years following entry of this Order, the Settling Defendant must submit a

compliance notice, sworn under penalty of perjury, within 14 days of any change in the

following:

The Settling Defendant must report any change in: (a) any designated point of

contact; or (b) the structure of any entity that the Settling Defendant has any

ownership interest in or directly or indirectly controls that may affect compliance

obligations arising under this Order, including: creation, merger, sale, or

dissolution of the entity or any subsidiary, parent, or affiliate that engages in any

acts or practices subject to this Order.

Additionally, the Settling Defendant must report any change in: (a) name,

including aliases or fictitious name, or residence address; or (b) title or role in any

business activity, including any business for which the Settling Defendant

performs services whether as an employee or otherwise and any entity in which

the Settling Defendant has any ownership interest, and identify its name, physical

address, and Internet address, if any.

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Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 24 of 41

The Settling Defendant must submit to the FTC notice of the filing of any bankruptcy

petition, insolvency proceeding, or any similar proceeding by or against the Settling

Defendant within 14 days of its filing.

Any submission to the FTC required by this Order to be sworn under penalty of perjury

must be true and accurate and comply with 28 U.S.C. § 1746, such as by concluding: "I

declare under penalty of perjury under the laws of the United States of America that the

foregoing is true and correct. Executed on: _ _ " and supplying the date, signatory's

full name, title (if applicable), and signature.

Unless otherwise directed by a FTC representative in writing, all submissions to the FTC

pursuant to this Order must be emailed to Debrief@ftc.gov or sent by overnight courier

(not the U.S. Postal Service) to: Associate Director for Enforcement, Bureau of

Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW,

Washington, DC 20580. The subject line must begin: FTC v. Prime Legal Plans, LLC,

et al., X120056.

RECORD KEEPING

XIV.

IT IS FURTHER ORDERED that Settling Defendant must create certain records for 10

years after entry of the Order, and retain each such record for 5 years. Specifically, for any

business in which the Settling Defendant, individually or collectively with any other Defendants,

is a majority owner or directly or indirectly controls, must maintain the following records:

Accounting records showing the revenues from all goods or services sold, all costs

incurred in generating those revenues, and the resulting net profit or loss;

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Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 25 of 41

Personnel records showing, for each person providing services, whether as an employee

or otherwise, that person's: name, addresses, and telephone numbers; job title or

position; dates of service; and, if applicable, the reason for termination;

Complaints and refund requests, whether received directly or indirectly, such as through a

third party, and any response; and

All records necessary to demonstrate full compliance with each provision of this Order,

including all submissions to the FTC.

COMPLIANCE MONITORING

XV.

IT IS FURTHER ORDERED that, for the purpose of monitoring Settling Defendant's

compliance with this Order, including the financial representations upon which part of the

judgment was suspended and any failure to transfer any assets as required by this Order:

Within 14 days of receipt of a written request from a representative of the FTC, Settling

Defendant must: submit additional compliance reports or other requested information,

which must be sworn under penalty of perjury; appear for depositions; and produce

documents, for inspection and copying. The FTC is also authorized to obtain discovery,

without further leave of court, using any of the procedures prescribed by Federal Rules of

Civil Procedure 29, 30 (including telephonic depositions), 31, 33, 34, 36, 45, and 69.

For matters concerning this Order, the FTC is authorized to communicate directly with

Settling Defendant. Settling Defendant must permit representatives of the FTC to

interview any employee or other person affiliated with any Settling Defendant who has

agreed to such an interview. The person interviewed may have counsel present.

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Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 26 of 41

The FTC may use all other lawful means. including posing. through its representatives. as

consumers. suppliers. or other individuals or entities. to Settling Defendantor any

individual or entit~ :-tftiliated v.· ith Settling Defendant. without the necessity of

identification or prior notice. Nothing in this Order limits the FTC's lawful use of

compulsory process. pursuant to Sections 9 and 20 ofthe FTC Act.

15 u.s.c. §§ 49. 57b-l.

RETENTION OF JURISDICTION

XVI.

IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for

purposes ofconstmction. modification. and enforcement ofthis Order.

Date:

Le h Frazier

Federal Trade Commission

600 Pennsylvania Ave., N.W .. Room 1\J 3158

Washington, D.C. 20580

_5-lf-~---' 20 13

(202) 326 2187

Date:~·

Page 26 of27

2013

Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 27 of 41

IT IS SO ORDERED, this

2.tay of

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Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 28 of 41

APPENDIX A

Telemarketing Sales Rule

pt, 3 10

16 CFR Ch. I (1-1-11 Edition)

Fee for access to the National Do Not

Call Registry .

Severabili ty.

PART 31G-TELEMARKETING SALES

RULE 16 CFR PART 310

310.8

310.9

A UTHORITY: 15 U.S.C. 6101- 6108.

Sec.

310.1 Scope of regulations in this part.

310.2 Definitions.

310.3 Deceptive telemarketing acts or prac-

tices.

Abusive telemarketing acts or practices.

310.5 RecordkeepJng requirements.

310.6 Exemptions.

310.7 Actions by states and private persons.

FR 48516. Aug. 10, 2010. unless

otherwise noted .

S OURCE: 75

§ 310.1

Scope of regulations in this

part.

310.4

This part implements the Telemarketing and Consumer Fraud and

Abuse Prevention Act, 15 U.S.C. 61016108, as amended.

362

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Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 29 of 41

APPENDIX A

Telemarketing Sales Rule

Federal Trade Commission

§310.2

§310.2 Definitions.

(a) Acquirer means a business organi-

zation, financial institution, or an

agent of a business organization or fi nancial institution that has authority

from an organization that operates or

licenses a credit card system to authorIze merchants to accept, transmit, or

process payment by credit card

through the ct·ed!t card system for

money, goods or services, or anything

else of value.

(b) Attorney General means the chief

legal officer of a state.

t hat enables any person to access a

customer 's or donor's account, such as

a credit card, checking. savings. share

or similar account, utility bill. mortgage loan account, or debit card.

(d) Caller identification service means a

service that allows a telephone subscriber to have the telephone number.

and, where available. name of the calling party transmitted contemporaneously with t he telephone call, and

displayed on a device in or connected

to the subscriber's telephone.

(e) Cardholder means a person to

whom a credit card is issued or who is

authorized to use a credit card on behalf of or in add! t!on to the person to

whom the credi t card is issued.

(f) Charitable contribution means any

donation or gift of money or any other

thi ng of value.

(g) Commission means the l''ederal

Trade Commission.

(h) Credit means the right granted by

a creditor to a debtor to defer payment

of debt or to incur debt and defer its

payment.

(i) Credit card means any card, plate,

coupon book, or other credit device existing for the purpose of obtaining

money, proper ty. labor. or services on

credit.

(j) Credit card sales draft means any

record or evidence of a credit card

transaction.

(k) Credit card system means any

method or procedure used to process

credit card transactions involving credit cards issued or licensed by the operator of that system.

0) Customer means any person who is

or may be required to pay for goods or

services

offered

through

telemarketing.

(m) Debt relief service means any program or service represented. directly or

by implication. to renegotiate, settle.

or in any way alter the terms of payment or other terms of the debt between a person and one or more unsecured creditors or debt collectors, including. but not limited to, a reduction

in the balance, interest rate, or fees

owed by a person to an unsecured creditor or debt collector.

(n) Donor means any person solicited

to make a charitable contribution.

(o)

Established

business relationship

means a relationship between a seller

and a consumer based on:

(1) the consumer 's purchase, rental.

or lease of the seller's goods or services

or a financial transaction between the

consumer and seller, within t.he eighteen (18) months immediately preceding

the date of a telemarketing call: or

(2) the consumer's inquiry or application regarding a product or service offered by the seller . within the three (3)

months immediately preceding the

date of a telemarketing call.

(p) Free-to-pay conversion means. in

an offer or agreement to sell or provide

any goods or services, a provision

under which a customer receives a

product or service for free for an ini tial

period and will incur an obligation to

pay for the product or service if he or

she does not, take affirmative action to

cancel before Lhe end of that period.

(q) Investment opportunity means anything, tangible or intangible, that is offered, offered for sale. sold, or traded

based wholly or in part on r epresentations. either express or implied, about

past, present, or future income, profit,

or appreciation.

(r) Material means likely to affect a

person's choice of, or conduct regarding, goods or services or a charitable

contribution.

(s) Merchant means a person who is

authorized under a written contract

with an acquirer to honor or accept

credit cards. or to transmit or process

for payment credit card payments. for

the purchase of goods or services or a

charitable contribution.

(t) Merchant agreement means a written contract between a merchant and

an acquirer to honor or accept credit

cards, or to transmit or process for

payment credit card payments, for the

363

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Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 30 of 41

APPENDIX A

Telemarketing Sales Rule

§310.2

16 CFR Ch. I (1-1-11 Edition)

purchase of goods or services Ol' a charitable contribution.

(u) Negative option feature means, in

an offer or agreement to sell or provide

any goods or services, a provision

under which the customer's silence or

failure to take an affirmative action to

reject goods or services or to cancel the

agreement is interpreted by the seller

as acceptance of the offer.

(v) Outbound telephone call means a

telephone call in! tiated by a telamarketer to induce the purchase of

goods or services or to solicit a charitable contribution.

(w) Person means any Individual,

group, unincorporated association, limited or general partnership, coi·poration, or other business entity.

(x)

?reacquired account information

means any information that enables a

seller or telemarketer to cause a

charge to be placed against a customer's or donor's account without obtaining the account number directly

from the customer or donor during the

telema-rketing transaction pursuant to

which the account will be charged.

(y) Prize means anything offered, or

purportedly offered. and given. or purportedly given, to a person by chance.

For purposes of this definition, chance

exists If a person is guaranteed to receive an item and. at the time of the

offer or purported offer. the telamarketer does not identify the specific

item that the person will receive.

(i) Prize promotion means:

<1) A sweepstakes or other game of

chance: or

(2) An oral or written express or implied represent-ation that a person has

won. has been selected to receive, or

may be eligible to receive a prize or

purported prize.

(aa) Seller means any person who, in

connection with a telemarketing transaction, provides, offers to provide, or

arranges for others to provide goods or

services Lo t he customer in exchange

for consideration.

(bb) State means any state of the

United States, the District of Columbia, Puerto Rico. the Northern Mariana

Islands, and any territory or possession

of the United States.

(cc) Telemarketer means any person

who, in connection with telemarketing,

initiates or receives telephone calls to

or from a customer or donor.

(dd) Telemarketing means a plan. program , or campaign which is conducted

to induce the purchase of goods or services or a charitable contribution. by

use of one or more telephones and

which involves more than one interstate telephone call. The term does not

include the solicitation of sales

through the mailing of a catalog

which: contai ns a written description

or Illustration of the goods or services

offered for sale; includes the business

address of the seller: includes multiple

pages of written material or illustrations; and has been Issued not less frequently than once a year. when the

person making the solicitation does

not solicit customers by telephone but

only receives calls initiated by customers in response to the catalog and

during those calls takes orders only

without further solicitation. For purposes of the previous sentence, the

term "further solicitation" does not include providing the customer with information about. or attempting to sell .

any other item included in the same

catalog which prompted the customer's

call or in a substantially similar catalog.

(ee) Upselling means soliciting the

purchase of goods or services following

an initial transaction during a single

telephone call. The upsell is a separate

telemarketing transaction, not a continuation of the initial transaction. An

"external upsell" is a solicitation made

by or on behalf of a seller different

from the seller in the initial transaction, regardless of whether the initial transaction and the subsequent solicitation are made by the same talemarketer. An "internal upsell" is a solicitation made by or on behalf of the

same seller as in the initial transaction, regardless of whether the initial t ransaction and subsequent solicitation are made by the same telamarketer.

364

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Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 31 of 41

APPENDIX A

Telemarketing Sales Rule

Federal Trade Commission

§310.3

§ 310.3

Deceptive telemarketing acts or

practices.

(a) Prohibited deceptive telemarketing

acts or practices. It is a deceptive tele-

marketing act or practice and a violation of this Rule for any seller or talemarketer to engage in the following

conduct:

(1) Before a customer consents to

pay6S9f~ for goods or services offered,

failing to disclose truthfully, in a clear

and conspicuous manner. the following

material information:

ti) The total costs to purchase. receive. or use, and the quantity of. any

goods or services that are the subject

of the sales offer; 660f~

(ii) All material restrictions, limitations, or conditions to purchase. receive. or use the goods or services that

are the subject of the sales offer;

(iii) If the seller has a policy of not

making refunds. cancellations, exchanges, or repurchases. a statement

informing the customer that this is the

seller's policy: or, if the seller or telamarketer makes a representation

about a refund, cancellation. exchange,

or repurchase policy, a statement of all

matet·ial terms and conditions of such

policy;

(i v) In any prize promotion. the odds

of being able to receive the prize. and.

if the odds are not calculable in advance, the factors used in calculating

the odds: that no purchase or payment

is required to win a prize ot• to participate in a prize promotion and that any

purchase or payment will not increase

the person's chances of winning; and

the no-purchase/no-payment method of

6>9 When a seller or telemarketer uses. or

directs a cust.omer to use . a courier to transport payment. the seller or telemarketer

must make the disclosul·es required by

§310.3(a){l) before sending a courier to pick

up payment or author!llation for payment. ot·

directing a cust.omer to have a courier pick

up payment or authorization for payment. In

the case of debt relief services. the seller or

teiemarketer must make t he disclosures required by §310.3(a)(l) before the consumer enrolls in an offered program.

G<lo For offers of consumer credit products

subject to the Trnth in Lending Act, 15

U.S.C. 1601 et seq., and Regulation Z. 12 CFR

226, compliance wi th the disclosure requirements under the Truth in Lending Act and

Regulation Z shall constitute compliance

with §310.3(a)(l)(!) of this Rule.

participating in the prize promotion

with either instructions on how to participate or an address or local or tollfree telephone number to which customers may write or call for information on how to participate;

(v) All material costs or conditions

to receive or redeem a prize that is the

subject of the prize promotion;

(vi) In the sale of any goods or services represented to protect, insure, or

otherwise limit a customer's liability

in the event of unauthorized use of the

customer's credit card, the limits on a

cardholder's liability for unauthorized

use of a credit card pursuant to 15

u.s.c. 1643;

(vii) If the offer includes a negative

option feature. all material terms and

conditions of the negative option feature, including, but not limited to, the

fact that the customer's account w111

be charged unless the customer takes

an affirmative action to avoid the

charge(s), the date(s) the charge(s) will

be submitted for payment, and t he specific steps the customer must take to

avoid the charge(s): and

(viii) In the sale of any debt relief

service:

(A) the amount of time necessary to

achieve the represented resul ts, and to

the extent that t he service may include

a settlement offer to any of the customer's creditors or debt collectors.

the time by which the debt relief service provider will make a bona fide settlement offer to each of them;

(B) to the extent that the service

may include a settlement offer to any

of the customer's creditors or debt collectors, the amount of money or the

percentage of each outstanding debt

tha.t. the customer must accumulate before the debt relief service provider

will make a bona fide settlement offer

to each of them;

the debt relief service t'elies upon or results in the customer's failure to make

timely payments to creditors or debt

collectors. that the use of the debt relief service will likely adversely affect

the customer's creditworthiness, may

result in the customer being subject to

collections or sued by creditors or debt

collectors. and may increase the

amount of money the customer owes

365

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Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 32 of 41

APPENDIX A

Telemarketing Sales Rule

§310.3

16 CFR Ch. I (1- 1- 11 Edition)

due to the accrual of fees and interest;

and

(D) to the extent that the debt relief

service requests or requires the customer to place funds in an account at

an insured financial !nsti t ution, t hat

the customer owns the funds held in

the account. the customer may withdraw from the debt rellef service at any

time without penalty, and, if the customer withdraws, the customer must

receive all funds in the account, other

than funds earned by the debt relief

service

compliance

with

§ 310.4(a)(5)(1)(A) through (C).

(2) Misrepresenting, directly or by

implica tion. in the sale of goods or

services any of the following material

information:

(i) The total costs to purchase, receive. or use. and the quantity of. any

goods or services that are the subject

of a sales offer;

(ii) Any material restriction. limitation, or condition to purchase, receive.

or use goods or services that are the

subject of a sales offer;

(iii) Any material aspect of the performance . efficacy, nature. or central

characteristics of goods or services

that are the subject of a sales offer;

{iv) Any material aspect of the nature or terms of the seller's refund,

cancellation, exchange, or repurchase

policies;

(v) Any material aspect of a prize

promotion including, but not limited

to, the odds of being able to receive a

prize. the nature or value of a prize. or

that a purchase or payment is required

to win a prize or to participate in a

prize promotion;

(vi) Any material aspect of an investment opportunity including. but not

limited to. risk, liquidity, earnings poten tial, or profitability;

(vii) A seller's or telemarketer's a.ffiliation with, or endorsement or sponsorship by, any person or government

entity;

(viii) That any customer needs offered goods or services to provide protections a customer already has pursuant to 15 U.S.C. 1613;

(ix) Any material aspect of a negative option fea t ure including. but not.

limited to, the fact that the customer's

account will be charged unless t he customer takes an affirmative action to

avoid t he charge(s), the date(s) the

charge(s) will be submitted for payment, and the specific steps the customer must take to avoid the

charge(s); or

(x) Any material aspect of any debt

relief service, including. but not limited to. the amount of money or the

percentage of the debt amount that a

customer may save by using such service; the amoun t of time necessary to

achieve the represented results; the

amount of money or the percentage of

each outstanding debt that the customer must accumulate before t he provider of the debt relief service will initiate attempts with the customer's

creditors or debt collectors or make a

bona fide offer to negotiate. settle, or

modify t he terms of the customer's

debt; the effect of the service on a customer's creditworthiness; the effect of

the service on collection efforts of the

customer's creditors or debt collectors;

the percentage or number of customers

who attain the represented results: and

whe ther a debt relief service is offered

or provided by a non-profi t entity.

(3) Causing billing informat ion to be

submitted for payment, or collecting or

attempting to collect payment for

goods or services or a charitable contribution, directly or indirectly. without the customer's or donor's express

verifiable authorization, except when

the method of payment used is a credit

card subject to protections of the

Truth in Lending Act and Regulation

Z,661f:S or a debit card subject to the

protections of the Electronic Fund

Transfer Act and Regulation E.662f:S

Such authorization shall be deemed

verifiable if any of the following means

is employed:

(i) Express written authorization by

the customer or donor, which includes

the c ustomer's or donor's signature;sas;

::;

••1

Truth in Lending Act, 15 U.S.C. 1601 et

seq .. and Regulation Z. 12 CFR part 226.

""" Electronic Fund Transfer Act. 15 U.S.C.

1693 et seq .. and Regulation E. 12 CFR part

205.

"'" For ptlrposes of this Rule. the term

"signature" shall Include an electronic or digItal form of slgnatw·e. to the extent that

such form of signature is recognized as a

valid signature under applicable federal Jaw

or st-ate contra ct law.

366

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Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 33 of 41

APPENDIX A

Telemarketing Sales Rule

Federal Trade Commission

§310.3

(ii) Express oral authorization which

is audio-recorded and made available

upon request to the customer or donor,

and the customer's or donor's bank or

other billing entity, and which evidences clearly both the customer's or

donor's authorization of payment for

the goods or services or charitable contribution that are the subject of the

telemarketing transaction and the customer's or donor's receipt of all of the

following information:

(A) The number of debits, charges. or

payments (if more than one);

the

debit(s).

(B) The date(s)

charge(s). or payment(s) will be submitted for payment;

charge(s), or payment(s);

(Dl The customer's or donor's name:

(E) The c ustomer's ot· donor's billing

information, identified with sufficient

specificity such that the customer or

donor understands what account will

be used to collect payment for the

goods or services Ot' charitable contribution that are the subject of the

telemarketing transaction;

(I<') A telephone number for customer

or donor inquiry that is answered during normal business hours; and

(G) The date of the customer's or donor's oral authorization; or

(iii) Written confirmation of the

transaction. identified in a clear and

conspicuous manner as such on the

outside of the envelope, sent to the

customer or donor via first class mail

prior to the submission for payment of

the customer's or donor's billing information, and that includes all of the information

contained

§§310.3(a)(3)(ii)(A)-(G) and a clear and

conspicuous statement of the procedures by which the customer or donor

can obtain a refund from the seller or

telemarketer or charitable organization in the event the confirmation is

inaccurate; provided, however, that

this means of authorization shall not

be deemed verifiable in instances in

which goods or services are offered in a

transaction involving a free-to-pay

conversion and preacquired account information.

(4) Making a false or misleading

statement to induce any person to pay

for goods or services or to induce a

chari table contribution.

(b) Assisting and facilitating. It is a deceptive telemarketing act or practice

and a violation of this Rule for a person to provide substantial assistance or

support to any seller or telemarketer

when that person knows or consciously

avoids knowing that the seller or talemarketer is e ngaged i n a ny act or practice that violates §§ 310.3(a), (c) or (d).

or §310.4 of this Rule.

expressly permitted by t he applicable

credit card system, It is a deceptive

telemarketing act or practice a nd a

violation of this Rule for:

(1) A merchant to present to or deposi t into, or cause another to present

to or deposit into. the credit card system for payment. a credit card sales

draft. generated by a telemarketing

transaction t hat is not the result of a

telemar keting credi t card transaction

between the cardholder and the merchant;

(2) Any person to employ, solicit. or

otherwise cause a merchant. or an employee. representative, or agent of the

merchant. to present to or deposit Into

the credit card system for payment, a

credit card sales draft generated by a

telemarketing transaction that is not

the resul t of a telemarketing credit

card transaction between the cardholder and the merchant; or

(3) Any person to obtain access to the

crecli t card system through the use of a

business relationship or an affiliation

with a m erchant, when such access is

not a uthorized by the merchant agreement or the applicable credit card system.

(d) Prohibited deceptive acts or practices in the solicitation of charitable contributions. It is a fraudulent charitable

solicitation, a deceptive telemarketing

act or practice. and a violation of this

Rule for any telemarketer soliciting

charitable contributions to m isrepresent, directly or by implication, any of

the following m aterial information:

(1) The nature, purpose, or mission of

any entity on behalf of which a cha r itable contribution is being requested;

(2) That any charitable contribution

Is tax deductible in whole or in part;

(3) The purpose for which any charitable contribution will be used;

(4) The percentage or amount of any

charitable contribution that will go to

367

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Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 34 of 41

APPENDIX A

Telemarketing Sales Rule

§310.4

16 CFR Ch. I (1-1-11 Edition)

a charitable organization or to any

particular charitable program;

(5) Any material aspect of a prize

promotion including, but not limited

to: the odds of being able to receive a

prize; the nature or value of a prize: or

that a charitable contribution is required to win a prize or to participate

in a prize promot ion; or

t6) A charitable organization's or

telemarketer's affiliation wi t h, or endorsement or sponsorship by, any person or government entity.

§ 310.4 Abusive telemarketing acts or

practices.

(a) Abusive conduct generally. It is an

abusive telemarketing act or practice

and a violation of this Rule for any

seller or telemarketer to engage in the

following conduct:

(1) Threats, intimidation, or the use

of profane or obscene language:

(2) Requesting or receiving payment

of any fee or consideration for goods or

services represented to t•emove derogatory information from. or improve. a

person's credit history, credit. record,

or credit rating until:

(i) The time frame in which the seller

has represented all of the goods or

services will be provided to that person

has expired; and

(ii) The seller has provided the person

with documentation in the form of a

consumer report from a consumer reporting agency demonstrating that the

promised results have been achieved.

such report having been issued more

than six months after the results were

achieved. Nothing in this Rule should

be construed to affect the requirement

in the Fair Credit Reporting Act, 15

U.S.C. 1681, that a consumer report

may only be obtained for a specified

permissible purpose:

(3) Requesting or receiving payment

of any fee or consideration from a person for goods or services represented to

recover or otherwise assist in the return of money or any other item of

value paid for by, or promised to, that.

person in a previous telemarketing

transaction. until seven (7) business

days after such money or other item is

delivered to that person. This provision

shall not apply to goods or services

provided to a person by a licensed attorney;

(4) Requesting or receiving payment

of any fee or consid.eration in advance

of obtaining a loan or other extension

of credit when t he seller or talemarketer has guaranteed or represented a high likelihood of success in

obtaining or arranging a loan or other

extension of credit for a person:

(5) (i) Requesting or receiving payment of any fee or consideration for

any debt relief service until and unless:

(A) The seller or telemarketer has renegotiated, settled, reduced, or otherwise altered the terms of at least one

debt pursuant to a settlement agreement, debt management plan, or other

such valid contractual agreement executed by the customer;

(B) The customer has made at least

one payment pursuant to that settlement agreement, debt management

plan, or other valid contractual agreement between the customer and the

creditor or debt collector: and

in a service are renegotiated, set.tled.

!'educed, or otherwise altered individually, the fee or consideration either:

(I) Bears the same proportional relationship to the total fee for renegotiating, settling, reducing. or altering

the terms of the entire debt balance as

the individual debt amount bears to

the entire debt amount. The individual

debt amount and the entire debt

amount are t hose owed at the time the

deb t was enrolled in tile service; or

(2) Is a percentage of the amount

saved as a result of the renegotiation.

settlement. reduc tion, or alteration.

The percentage charged cannot change

from one individual debt to another.

The amount saved is the difference between the amount owed at the time t he

debt was enrolled in the service and the

amount actually paid to satisfy the

debt.

(11) Nothing in §310.4(a)(5)(i) prohibits

requesting or requiring the customer

to place funds in an account to be used

for the debt relief provider's fees and

for payments to creditors or debt collectors in connection with the renegotiation, settlement. reduction. or other

alteration of the terms of payment or

other terms of a debt, provided that:

(A) The funds are held in an account

at an insured financial institution;

368

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Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 35 of 41

APPENDIX A

Telemarketing Sales Rule

Federal Trade Commission

§310.4

<B) The customer owns the funds held

in the account and is paid accrued interest on the account, If any:

in any way affiliated with, the debt relief service:

lD) The entity administering the account does not give or accept any

money or other compensation in exchange for referrals of business involving the debt relief service: and

tE) The customer may withdraw from

the debt relief service at a ny time

without penalty, and must receive all

funds in the account, ot-her than funds

earned by t he debt relief service in

compliance

with

§310.4ta)(5)(i)(A)

through lC), within seven t7) business

days of the customer's request.

(6) Disclosing or receiving, fot• consideration. unencrypted consumer account numbers for use in telemarketing: provided, however. that

this paragraph shall not apply to the

disclosure or receipt of a customer's or

donor's billing information t.o process a

payment for goods or services or a

charitable contribution pursuant to a

tt·ansaction:

(7) Causing billing information to be

submit-ted for payment, directly or indirectly, without the express informed

consent of the customer or donor. In

any tele marketing transaction, the

seller or telemarketer must obtain the

express informed consent of the c ustomer or donor to be charged for the

goods or services or charitable cont ribution and to be charged using the

identified account. In any telemarke ting

transaction

involving

preacquired account information. the

requirements in paragraphs (a)(6)(1)

through (ii) of this section must be met

to evidence express informed consent.

(I) In any telemark eting transaction

involving preacquired account information and a free-to -pay conversion feature, the seller or telemarketer must:

(A) Obtain from the customer, at a

minimum, the last four (4) digits of the

account number to be charged:

(B) Obtain from the customer his or

her express agreement, to be charged

for the goods or services and to be

charged using the account number pursuant to paragraph (a)(6)(iJ(A) of this

section: and,

transaction.

(11) In any other telemarke ting tran saction involving preacquired account

information not described in paragraph

(a)(6)(i) of this section, the seller or

telemarketer must:

(A) At a minimum, identify t he account to be charged wit-h sufficient

specifici ty for the customer or donor to

understand what account will be

charged: and

(B) Obtain from the c ustomer or

donor his or her express agreement to

be charged for the goods or services

and to be charged using the account

number identified pursuant to para graph (a)(6)(ii)(A) of this section: or

(8) Failing to t r ansm! t or cause to be

transmitted the telephone number.

and. when made avail able by the talemarketer's canier, the name of the

telemarketer, to any caller identification service in use by a recipient of a

telemark eting call; provided that It

shall not be a violation to substi tute

(for the name and phone number used

in. or billed for, making the call) t he

name of the seller or charitabl e organization on behalf of which a telemarketing call is placed, and the seller's or charitable organization's customer or donor service telephone number, which is answered during regular

business hours.

(b) Pattern of calls. (1) It is an abusive

telem at·keting act Ol' practice and a

violation of this Rule for a telemarketer to engage in. or for a seller

to cause a telemarketer to engage in.

the following conduct:

(i) Causing any telephone to ring, or

engaging any person in telephone conversation, repeatedly or continu ously

wi th int ent to annoy, abuse. or harass

any person at the called number;

(ii) Denying or interfering in a n y

way, directly or indirectly, with a person's righ t to be placed on any r egistry

of names and/or telephone numbers of

persons who do n ot wish to receive outbound telephone calls establlshed to

comply with § 310.4(b)(l)(iii);

(iii) Initiating any outboun<l. telephone call Lo a person when:

(A) That person previously has stated

t-hat he or she does not wish to receive

an outbound tel ephone call made by or

369

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Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 36 of 41

APPENDIX A

Telemarketing Sales Rule

§3 10.4

16 C FR Ch. I (1-1-11 Edition)

on behalf of the seller whose goods or

services are being offered or made on

behalf of the charitable organizat.ion

for which a charitable contribution Is

being sollclt.ed: or

(B) That. person's telephone number

is on the "do-not-call" regist1·y, maintained by the Commission. of persons

who do not wish to receive outbound

telephone calls to induce the pu1·cha.se

of goods or services unless the seller:

(!) Has obtained the express agreement. In writing, of such person to

place calls to that person. Such written

agreement shall clearly evidence such

person's authorization that calls made

by or on behalf of a specific pa1·ty may

be placed to that person, and shall Include t.he telephone number to which

the calls may be placed and the s1gnatureGI>4tS of t.hat. person: or

(U) Has an established business relationship with such person. and that

person has not stated that he or sbe

does not wish to receive out.bound telephone

calls

under

paragraph

(b)(l)(IU)(A) of this section: or

tiv) Abandoning any outbound telephone call. An outbound telephone call

is "abandoned" under this section lf a.

person answers it and the telemarketer

does not. connect the call to a sales representative within two ( 2) seconds of

t.he person's completed greeting.

(v) Inltia.t.ing any outbound telephone

call that delivers a prerecorded message. ot.heJ' t.han a prerecorded message

permit.t.ed for compliance with the call

abandonment.

safe

harbor

§310.4(b)(4)(iil), unless:

(A) In any such call to induce the

purchase of any good or service, the

seller has obtained from the recipient

of the call an express agreement, In

writing, t.ha.t:

ti) The seller obtained only after a

clear and conspicuous disclosure that

the purpose of the agreement. ill to authorize the seller to place prerecorded

calls to such person:

(II) The seller obt.alned without. requJring, directly o1· indirectly. that t.he

agreement be executed as a condition

of purchasing any good or service:

(IIi) Evidences the w!lllngness of the

l'ec!pient of the call to receive calls

tbA.C deliver prerecorded messages by

or on behalf of a specific seller: and

(iv) Includes such person's telephone

number and signature;llllSfS and

(B) In any such call to Induce the

purchase of any good or service, or to

Induce a charitable contribution from a

member of, or previous donor to, a nonprofit charitable organization on whose

behalf the call is made, the seller or

t.elemarketer:

U) Allows the telephone to ring for at

least. fifteen (15) seconds or four (4)

rings before disconnecting an unanswered call: and

(ii) Within two (2} seconds after the

completed greeting of the person

called. plays a prerecorded message

that promptly provides the disclosu1·es

required by §3l0.4(dl or (e), followed

Immediately by a disclosure of one or

both of the following:

(A) In the case of a call that could be

answered in pei'Son by a consumer. that

the pei'SOn called can use an automated

int.eractive voice and/or keypress-activated opt-out mechanism to assert a

Do Not Call request pursuant to

§ 310.4(b)(l )(iii)(A) at any Lime during

t-he message. The mechanism must.:

(1) Automatically add t.he number

called to the seller's entity-specific Do

Not Call list:

(2) Once invoked. Immediately disconnect the call: and

(3) Be available for use at any time

during the message: and

(B) ln the case of a call that could be

answered by an answering machine or

voicemail service, t.haL the person

called can use a toll-fr-ee telephone

number r.o assert a Do Not Call request.

pursuant to §310.4(b)(l )(!i!}(A). The

number provided must connect. cth·ectly

to an automated interactive voice or

keypress-activalted opL-out. mechanism

t.hat:

ooo Fo1· purposes of this Rule . t.he t.lll'm

"s1gna.tllre" shall Include an electronic ot· digItal form of signature. to the exLen~ t.hM

such form or signature is recognized as a

valid signature under applicable federal law

or state cont.ract.la.w.

6M For p\lrposes of ~bls Rule. lhe term

"signature· shall include a.n electronic or diglt.al !orm or signature. Lo Lhe extent that

such form of signature is recognized lUi a

valid signature under applicable feder'B.l law

or state contract law.

370

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Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 37 of 41

APPENDIX A

Telemarketing Sales Rule

Federal Trade Commission

§310.4

(1) Automatically adds the number

called to the seller's entity-specific Do

Not Call list;

(2) Immediately thereafter disconnects the call; and

(3) Is accessible at any time throughout the duration of the telemarketing

campaign: and

(iii) Complies with all other requirements of this part and other applicable

federal and state laws.

applicable requirements of this paragraph (v) shall not be deemed to violate

§ 310.4(b)(l)(iv) of this part.

(D) This paragraph (v) shall not. apply

to any outbound telephone call that delivers a prerecorded healthcare message made by, or on behalf of. a covered

entity or its business associate, as

those terms are defined in the HIPAA

Privacy Rule, 45 CFR 160.103.

(2) It is an abusive telemarketing act

or pract.ice and a violation of this Rule

for any person to sell. rent. lease. purchase, or use any list established to

comply with §310.4(b)(l)(iii)(A), or

maint.ained by the Commission pursuant to §310.4(b)(l)(iiiJ(B). for any purpose except compliance with the provisions of this Rule or otherwise to prevent telephone calls to telephone numbers on such lists.

(3) A seller or telemarketer will not

be liable for violating §310.4(b)(l)(ii)

and (iii) if it can demonstrate that, as

part of the seller's or telemarketer's

routine business practice:

(i) It has established and implemented written procedures to comply

with § 310.4(b)(l)(ii) and (iii);

(ii) It has trained its personnel, and

any entity assisting in its compliance,

in the procedures established pursuant

to §310.4(b)(3)(i);

(iii) The seller, or a telemarketer or

another person acting on behalf of the

seller or charitable organization, has

maintained and recorded a list of telephone numbers the seller or charitable

organization may not contact. in compliance with §310.4(b)(1)(iii)(A);

(ivl The seller or a telemarketer uses

a process to prevent telemarketing to

any telephone number on any list established pursuant to §310.4(b)(3)(iii) or

310.4(b)(l)(iii)(B), employing a version

of the "do-not-call" registry obtained

from the Commission no more than

thirty-one (31) days prior to the date

any call is made. and maintains

records documenting this process;

(v) The seller or a telemarketer or

another person acting on behalf of the

seller or charitable organization, monitors and enforces compliance with the

procedures established pursuant to

§ 310.4(b)(3)(i); and

(vi) Any subsequent call otherwise

violating §310.4(b)(l)(ii) or (iii) is the

result of error.

(4) A seller or telemarketer will not

be liable for violating §310.4(b)(1)(iv) if:

(i} The seller or telemarketer employs technology that ensures abandonment of no more than three (3) percent of all calls answered by a person.

measured over the duration of a single

calling campaign. if less than 30 days,

or separately over each successive 30day period or portion t hereof that the

campaign continues.

(ii) The seller or telemarketer, for

each telemarketing call placed. allows

the telephone to ring for at least fifteen (15) seconds or four (4) rings before

disconnecting an unanswered call:

(iii) Whenever a sales representative

is not available to speak with the person answering the call within two (2)

seconds after the person's completed

greeting, the seller or telemarketer

promptly plays a recorded message

that states the name and telephone

number of the seller on whose behalf

the call was placed666/$: and

(iv) The seller or telemarketer, in accordance with §310.5(b)-(d), retains

records est.ablishing compliance with

§310. 4( b)( 4)(i)-(iii ).

the prior consent of a person, it is an

abusive telemarketing act or practice

and a violation of this Rule for a talemarketer to engage in outbound telephone calls to a person's residence at

any time other than between 8:00 a.m.

and 9:00 p.m. local time at the called

person's location.

(d) Required oral disclosures in the sale

of goods or services. It is an abusive tele-

marketing act or practice and a violation of this Rule for a telemarketer in

666 This provision does not affect any sell·

er's or telemarketer's obligation to comply

with relevant state and federal laws. including but not limited to the TCPA. 47 U.S.C.

227. and 47 CFR part 64.1200.

371

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Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 38 of 41

APPENDIX A

Telemarketing Sales Rule

§310.5

16 CFR Ch. I (1-1-11 Edition)

an outbound telephone call or internal

or external upsell to induce the purchase of goods or services to fail to disclose truthfully, promptly. and in a

clear and conspicuous manner to the

person receiving the call, the following

information:

(1) The identity of the seller;

(2) That the purpose of the call is to

sell goods or services;

(3) The nature of the goods or services; and

(4 ) That no purchase or payment is

necessary to be able to win a prize or

participate in a prize promotion if a

prize promotion is offered and tha t any

pur chase or payment wlll no t increase

the person's chances of winning. This

disclosure must be made before or in

conjunction with the description of the

prize to the person called. If requested

by that person, the telemarketer must

disclose the no-purchase/no-payment

entry method for the prize promotion;

provided. however, that, in any internal upsell for the sale of goods or services, the seller or telemarketer must

provide the disclosures listed in Lhls

sect ion onJy to the extent that the information in the upsell differs from t he

disclosures provided in Lhe initial telemarke ting transaction.

(e) Required oral disclosures in charitable solicitations. It ls an abusive tele-

marketing act or practice and a violation of this Rule for a telemarketer. ln

an outbound telephone call to induce a

charitable contribution, to fail to disclose t ruthfully. promptly, and in a

clear and conspicuous manner to the

person receiving the call, the following

information:

(1) The identity of the charitable organization on behalf of which the request is being made; and

(2) That the purpose of the call is to

solicit a charitable contribution.

§ 310.5

Recordkeeping requirements.

(a) Any seller or telemarketer shall

keep. for a period of 2<1 months from

the date the record is produced, the following records relating t o its telemarketing activities:

(1) All substantially different advertising,

brochures,

telemarketing

scripts. and promotional materials;

(2) The name and last known address

of each prize recipient and the prize

awarded for prizes that are represented. directly or by implication. to

have a value of S25.00 or more;

(3) The name and last known address

of each customer. the goods or services

purchased. the date such goods or services were shipped or provided. and the

amount paid by the customer for the

goods or services;6(17t:>

(4) The name, any fictitious name

used. the last known home address and

telephone number, and the job title(s)

for all current and former employees

directly involved in telephone sales or

solicitations; provided. however, that if

the seller or telemarketer permits fictitious names to be used by employees,

each fictitious name must be traceable

to only one specific employee; and

(5) All verifiable authorizations or

records of express informed consent or

express agreement required to be provided or received under this Rule.

(b) A seller or tel emarketer may

keep the records required by § 310.5(a)

in any form. and in the same manner.

format. or place as they keep such

records in the ordinary course of business. Failure t o keep a ll records required by § 310.5(a) shall be a violation

of this Rule.

calling on behalf of the seller may, by

wrl iten ag reement. allocate responsibility between themselves for the recordkeeping required by this Section.

When a seller and telemarketer have

entered into such an agreement, t he

terms of that agreement shall govern,

and the seller or ielemarketer, as the

case may be, need not keep records

that duplicate those of the other. If the

agreement is unclear as to who must

maintain any required record(s), or if

no such agreement exists, the seller

shall be responsible for complying with

§§310.5(a)(l)-(3) and (5); the talemarketer shall be responsible for complying with §310.5(a)(<l).

(d) In the event of any dissolution or

termination of the seller's or telamarketer's business, the principal of

G6'7 For offers of consumet· credit products

subject to the Truth in Lending Act. 15

U.S.C. 1601 et seq .. and Regulation z. 12 CFR

226. compliance with the recordkeeping requirements under the Truth in Lending Act.

and Regulation z. shall constitute compl i·

ance with §310.5(a)(3) of this Rule.

372

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Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 39 of 41

APPENDIX A

Telemarketing Sales Rule

Federal Trade Commission

§31 0.7

&hat seller or telemarketer shall maintain all records as required under this

section. In Lhe event of any sale, assignment,, or other change In ownership

of the seller's or telemar ke ter's business. the successor business shall mai ntain all records t·equ!red under this section.

Exemptions.

(a) Solicitations to Induce charitable

contributions via outbound telephone

calls

are

not

covered

§310.4(b)(l)(iii)(B) of this Rule.

(b) The following acts or practices

are exempt from this Rule:

(1) The sale of pay-per-call services

subject. to t.he Commission's Rule entitled ''Tt•ade Regulation Rule Pursuant

to the Telephone Disclosure and Dispute Resolution Act of 1992," 16 CFR

Part 308, provided. however, that thls

exemption does not apply to the requirements of §§ Sl0.4(a)(l), (al{7), (b),

and (c):

(2) The sale of franchises subject to

the Commission's Rule entitled "Disclosure Requirements and Prohibitions

Concerning Franchising,» ("Franchise

Rule") 16 CFR Part 436, a nd the sale of

business opportunities subject t,o the

Commission's Rule entitled "Disclosure

Require ments and Prohibitions Concerning

Business

Opportunl Lies."

("Business Qpportunit,y Rule") 16 CFR

Part. 437. provided, however. t ha t this

exemption does not apply to the t·equll•ements of §§Sl0.4(a)tl}, (a)(7), (b),

and (C):

(3) Telephone calls in which the sale

of goods or services or charitable solicitation Is not completed. and payment

or authorization of payment is not required. untll after a face-to-face sales

or donation presentation by the seller

or charl table organization, provided,

however, that t his exemption does not

apply

th e

requirements

§§ 310.4(a)(l). (a)(7), (b ) . and (c):

(4) Telephone calls initiated by a customer Ol' donor that are not the result

of any solicitation by a seller, charttable organization. or telemarketer,

provided , however. tha t this exemption

does not a pply to any instances of

upselllng Included in such telephone

calls:

{5) Telephone calls initiated by a customer or donor In response to an adver§ 310.6

tisement through any medium, other

than direct mail solicitation, provided,

however, that this exemption does not

apply to calls initiated by a customer

or donor in response to an advertisement relating to investment opportunities, debt relief services. business opportunities other than business arrangements covered by the Franchise

Rule or Business Opportuni&y Rule, or

advertisements involvi ng goods or

services described in §§310.S(a)(l)(vl) or

310.4(a)(2)-(4}: or to any instances of

upselllng included in such telephone

cal ls;

(6) Telephone calls inlt.lated by a customer or donor in response to a direct

mall solicitation . Including solicitations via the u.s. Postal Service, facsimile t ransmission, electronic mail.

and other similar methods of delivery

In which a solicit:.ation is directed to

specific address(es) or person(s). that

clearly. conspicuously. and tru l,h!ully

discloses all material information listed in §310.3(a)(l) of this Rule. for any

goods or services offered In the direct

mail solicitation, and that contains no

material misrepresentation regarding

any Item contained In §310.3(d) of this

Rule for any requested c hari table contribution; provided, however. that. this

exemption does not apply t.o calls initiated by a cus tomer In response t,o a dit·ect mail solicitation relaLing Lo prize

promotions, investment. opportunities.

debt relief services. business opportunities other than businel:ls arrangements

covered by the Franchise Rule or Business Opportunity Rule, or goods or

services described in §§310.3(a)(l)(vi) or

310.4{a )(2)-(4); or to any instances of

upselling included in such telephone

calls; and

(7) Telephone calls between a telamarketer and any business. except

calls to induce the r etail sale of nondurable office or cleaning supplies; provided, however, that §310.4(b)(l)(ii!}(B}

and §310.5 of this Rule shall not a pply

to sellers or telemarketers of nondurable office or cleaning supplies.

§310.7 Actions by states a nd private

persons.

(al Any at.torney general or other offleer of a state authorized by the state

to bring an action under the Telemarketing and Consumet· Fraud and

373

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Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 40 of 41

APPENDIX A

Telemarketing Sales Rule

§310.8

16 CFR Ch. I (1-1-11 Edition)

Abuse Prevention Act.. and any privat,e

person who brings a.n action under that

Act, shall serve wr! tten notice of its

action on the Commission. if fea.aible,

prior to its init.iating an action under

Lhls Rule. The notice shall be sent to

the Office of the Director. Bureau of

Consumer Prot.eot!on, Federal Trade

Commission. Washington, DC 20580. a.nd

shall Include a copy of the state's or

Pl'lvate person's complaint and any

other pleadings to be filed with the

court. If prior notice Is not feasible.

the sLate or private person shall serve

the Commission wlt.h the required notice immediately upon instituting its

action.

(b) Nothing contained in t.hls Section

shall prohibit any attorney general or

ot.her authorized state official from

proceeding in stat.e court on the basis

of a.n alleged violation of any civil or

criminal statute of such state.

§310.8 Fee tor access to the National

Do Not CaJI Registry.

(a) It is a violation of this Rule for

any seller to inlt.!ate. or cause any

telemarketer Lo Initiate. an outbound

t.elephone call to any person whose

t.elephone number is within a given

area code unless such seller. either directly or through another person. first

has paid the a.n nual fee. required by

§310.8(c), for access to telephone numbers within that area code that are included in the National Do Not Call

Registry maintained by the Commission under §310.4(b)(l )(lii)(B): provided.

however. that such payment is not. necessary if the seller initiates. or causes

a telemarketer t.o initiate, calls solely

persons

pursuant

§§310.4(b)(l)(iiiHB)( I l o1· ( U ). and the

seller does not access the National Do

Not Call Registry for any other purpose.

(b) It. is a violation of this Rule for

any telemarketer. on behalf of any sellel'. t.o initiate an outbound telephone

call t.o any person whose telephone

number is within a given area code unless t.hat seller. either directly or

through another person. first has paid

the annual fee, required by § 310.8<c),

for access to the telephone numbers

w!t.h!n that area code that are included

in the National Do Not Call Registry;

provided. howevet·. that such payment

is not necessary If the seller Initiates.

or causes a telemarket.er to Initiate.

calls solely to persons pursuant to

§§310.4(b)(l)(ill)(B)( I ) or < ii ). and the

seller does not. access the National Do

Not Call Registry for any other purpose.

paid by any person prior to obtaining

access Lo the National Do Not Call

Registry. is S55 for each area code of

dat,a accessed, up to a maximum of

$15,058: provided, however, that there

shall be no charge to any person for accessing t.he first five area codes of data.

and provided further·. that there shall

be no charge to any person engaging In

or causing others to engage in outbound telephone calls to consumers

a.nd who Is accessing area codes of data

in the National Do Not Call Registry if

the person is permitted t.o access, but

Is not required to access. the Nat.ional

Do Not. Call Registry under this Rule.

47 CJ:o~ R 64.1200. or any other Federal

regulat.lon or Jaw. Any person accessing the National Do Not Call Reg!st.ry

may not participate ln any arrangement Lo share t.he cost of accessing t.he

reglsLry. including any arrangement

w! th any telemarketer or service provider to divide the costs to access the

registry among various clients of that

telema1·keter or service provider.

(d) Each person who pays, either directly or through another person. t.he

annual fee set forth in §310.8(c), each

person excepted under §310.8(c) from

paying t.he annual Cee, and each person

excepted from paying a.n annua.l fee

under §310.4<b)tl )(lii)(B). will be provided a unique account number ~hat

will allow that person to access t.he

registry data for the selected area

codes at any time for the twelve month

period beginning on the first day of the

month in which the person paid the fee

("the annual period"). To obt;ain access

to additional area codes of data during

the first six months of the annual period, each person requh·ed to pay t.he

fee under §310.8(c) must first pay $55

for each additional area code of data

not initially selected. To obtain access

to a.ddit.ional area codes of data during

the second six months of the annual period. each person l'equired to pay t.he

fee under §310.8(c) must first pay $27

Cot· each addHional area code of daLa

374

Page 13 of 14

Case 0:12-cv-61872-RNS Document 187 Entered on FLSD Docket 05/23/2013 Page 41 of 41

APPENDIX A

Telemarketing Sales Rule

Federal Trade Commission

§311.3

not Initially selected. The payment of

the additional fee will permit the person to access the addi tiona! area codes

of dat.a for the remainder of the annual

period.

(e) Access to the National Do Not

Call Registry is limited to t.elemarketers, sellers, others engaged in or

causing others t.o engage in telephone

calls to consumes·s. service providers

acting on behalf of such persons, and

any government agency that has law

enforcement authority. Prior to accessing t.he Nat-Ional Do Not Call Registry.

a person must. provide the Identifying

information required by tbe operator of

the registry t.o collect the fee, and

must certify. under penalty of law.

that t.he person Is accessing the registry solely to comply with the provisions of t.his Rule or to otherwise prevent. telephone calls to telephone numbers on the registry. If the person Is accessing t.he registry on behalf of sellers, that. person also must Identify

each of tbe sellers on whose behalf It is

accessing the registry. must provide

each seller's unique account number

fo1· access t.o the national registry. and

must certify, under penalty of law.

that the sellers will be using the Information gat.hered from the registry

solely to comply with the provisions of

this Rule or otherwise to prevent telephone calls t.o telephone n umbers on

the registry.

[75 FR 48516. Aug. 10. 2010: 75 FR 51934. Aug.

24. 2010]

§310.9 Severability.

The provisions of this Rule are separate and severable from one another. If

any PI'Ov1slon Is stayed or determined

to be invalid. II. Is the Commission's Intention tbal. t.he remaining provisions

shall continue In effect.

375

Page 14 of 14

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.