The Federal Trade Commission (FTC) recently announced a proposed order settling a Complaint against California-based lead generator Response Tree LLC and its president, Derek Doherty, banning them from making or assisting anyone in making robocalls or calls to phone numbers on the FTC’s Do Not Call (DNC) Registry. The proposed order helps settle pending FTC charges that Response Tree and its president operated more than fifty (50) websites designed to trick consumers into providing personal information for supposed mortgage refinancing and other services.
Pursuant to the Complaint, telemarketing campaigns allegedly assisted and facilitated by Response Tree’s illegal lead generation operations were used to sell a multitude of products and services, including solar panels, hearing aids, and extended auto warranties. These campaigns, which made robocalls and calls to numbers on the DNC Registry, were illegal, as the telemarketers did not have consumers’ consent to be called. The FTC alleges that Response Tree and its president utilized a system of lead generating websites as “consent farms” that used deceptive and manipulative “dark patterns” to induce consumers to provide their personal information, obscuring hard-to-find and inadequate disclosures about how the information would be used.
“Response Tree fueled millions of illegal telemarketing calls by tricking consumers into turning over their personal information and selling that information to telemarketers,” said Samuel Levine, Director of the Bureau of Consumer Protection. “The FTC will continue to target every corner of the illegal telemarketing ecosystem to protect consumers and hold wrongdoers accountable.” At their peak, Response Tree’s consent farm operations offered an average of 10,000 “real-time” leads for sale every day, and on some days had up to 50,000 illegally farmed leads for sale. In total, between 2019 and 2022, Response Tree sold millions of deceptively collected leads.
The proposed order settling the Complaint, which must be approved by the court before it can go into effect, bans Response Tree and its president from initiation or helping anyone else initiate, telemarking robocalls and bans them from calling, or assisting anyone else in calling, phone numbers on the DNC Registry and form selling, transferring, or disclosing consumer information in connection with lead generation activities.
In addition to being banned from making or facilitating this robocalls, the proposed order imposes a $7 million monetary judgement as a civil penalty against Response Tree and its president to the Treasurer of the United States, which will be suspended based on their inability to pay. In the event they are later found to have misrepresented their financial condition, the full amount will immediately become due.