Attorney General Lockyer Files Lawsuit Against Telemarketer for Violating "Do Not Call" Laws

Florida Firm Accused of Circumventing Federal and State Laws While Posing as "Surveyors"

Monday, January 12, 2004
Contact: (916) 210-6000,

(SACRAMENTO) – Attorney General Bill Lockyer today filed a complaint against L.M.A. Marketing, Inc., doing business as Mortgage Concepts, for violating national "Do Not Call" laws by pretending to conduct surveys in an effort to contact California consumers about refinancing their mortgages.

"Federal law makes it clear that commercial calls are off limits to consumers who have placed their names on the national Do Not Call Registry," Lockyer said. "This lawsuit should serve as a warning to telemarketers who think they can evade this important consumer protection law by pretending to conduct a ‘survey' while harassing Californians in the privacy of their homes."

Filed in U.S. District Court in Sacramento, the Attorney General's complaint alleges that since November 2003, the New Smyrna Beach, Florida-based company has placed automated calls to California consumers under the guise of conducting a "survey." In a pre-recorded message, the company asks questions relating to whether the consumer is interested in refinancing. If the consumer presses the correct buttons, a company representative calls the consumer back to pitch the company's refinancing service.

More than 250 Californians have lodged complaints about the company. These consumers said that when they told the company representative they were on the Do Not Call list, the representative said the firm is exempt from the federal law because it is conducting a survey.

The complaint alleges the company violated the federal Telephone Consumer Protection Act (TCPA) and the Telemarketing and Consumer Fraud and Abuse Prevention Act (Telemarketing Act) by placing telemarketing calls to phone numbers listed on the Federal Trade Commission's (FTC) Do Not Call Registry.

Under the TCPA, the Attorney General can obtain $500 in damages per violation, and $1,500 if the violations are willful or knowing. Under the Telemarketing Act, the Attorney General can obtain actual damages, restitution and other compensation on behalf of California consumers illegally contacted by the company.

The complaint further alleges the company violated California Business and Professions Code Section 17200 by engaging in unfair business practices. Under that statute, the Attorney General can obtain civil penalties of up to $2,500 for each violation of the telemarketing laws.

The defendants also violated federal rules that prohibit solicitors from making telemarketing calls or using pre-recorded, automated messages without providing the consumer the firm's name and phone number, the complaint alleges. The rules require that information so the consumer can ask the company to stop making the calls, a request with which the company must comply, by law.

Several companies throughout the country do business under the name Mortgage Concepts. This complaint involves only L.M.A. Marketing, Inc., doing business as Mortgage Concepts in New Smyrna Beach, Florida.

The complaint asks the court to permanently enjoin the company from continuing its unlawful activities, and to award at least $100,000 for violations of the TCPA, at least $100,000 in civil penalties for violations of the state's unfair business practices law, and unspecified damages for violations of the Telemarketing Act. Additionally, the complaint asks the court to require the defendants to reimburse the Attorney General's Office for the costs of the investigation and prosecution.

The lawsuit is the second brought by the California Attorney General's Office since the federal Do Not Call laws went into effect October 2003. Lockyer in early November 2003 filed the nation's first Do Not Call lawsuit against American Home Craft, Inc. The Hayward-based company, with offices in Sacramento, San Diego and Irvine, is charged with making illegal telemarketing calls to Californians who had placed their phone numbers on the national Do Not Call registry.

Based on additional evidence, the Attorney General has filed an amended complaint against American Home Craft alleging the company violated another provision of the Do Not Call laws by continuing to call consumers despite their requests to be placed on the company's internal Do Not Call list. Under the law, companies must honor those requests, even if they have established relationships with individual consumers.

As of January 1, California has its own Do Not Call law, which provides civil penalties of $11,000 per violation. Similar to the federal statutes, California's law prohibits commercial phone calls to residential numbers registered on the FTC's Do Not Call list. Like the federal law, the state statute provides exceptions for non-commercial calls placed by charities, political associations and survey takers.

Lockyer brought the lawsuit against L.M.A. Marketing, Inc. and Mortgage Concepts under the federal TCPA and Telemarketing Act because the violations occurred prior to the state law taking effect.

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PDF icon 04-003.pdf91.41 KB
PDF icon 04-003.pdf91.41 KB