NEW YORK (CNN/Money) -
The Federal Trade Commission has filed a complaint against the National Consumer Council (NCC), alleging the debt negotiation firm violated telemarketing rules by calling consumers on the national do-not-call registry, the agency said Wednesday.
The FTC also alleged that NCC's business practices violate the FTC Act of 1915, which bars deceptive business practices. According to the agency, the defendant failed to disclose its fee structure to program participants and often withheld making payments to creditors until after the fees were paid.
"NCC was calling people they shouldn't have been calling, and claiming things they shouldn't have been claiming," Howard Beales, director of the FTC's Bureau of Consumer Protection, said during a press conference.
A federal judge has issued a temporary restraining order that shut down the company, the FTC said.
Beales said during the conference that many telemarketing firms have been complying with the new rules.
Complaint figures for 2003, released in February, indicate that fewer than 45 companies received more than 100 consumer complaints and that the FTC received only 150,000 reports of possible violations. Fifty-five million telephone numbers were added to the do-not-call list in 2003.
A Harris poll taken during the same month found that 53 percent of all adults who signed up for the list had received fewer sales calls while another 25 percent stopped receiving calls. Five percent noted no change in telemarketing calls and 1 percent said they were receiving more calls.
The FTC had received a minor setback in September when the U.S. District Court of Colorado ruled the "do-not-call list" was unconstitutional in a suit brought by the Direct Marketing Association and the American Teleservices Association, two industry trade groups.
An appeals court in February, however, overturned the decision.
Political organizations, charities,and research firms conducting surveys are not covered by the do-not-call list's provisions. Additionally, businesses may call consumers who have purchased a product or service in the prior 18 months.