Security firm nailed in fed’s No-Call list

SSN Staff  - 
Thursday, January 1, 2004

COLUMBUS, Ohio - A security installation firm here was called the state’s “largest abuser” of the new federal no-call laws and slapped with a $1.3 million lawsuit by the state’s attorney general after numerous consumers complained about the company’s telemarketing, state officials said.
Attorney General Jim Petro in early December filed the case against Shelterguard Systems, accusing the security company of engaging in unlawful telemarketing practices, charges that stem mainly from calls to consumers who had placed their name on the National Do-Not-Call Registry.

According to state officials, between Oct. 17, when the federal registry officially took effect, and Dec. 4, 50 consumer complaints were logged against Shelterguard either through the Federal Trade Commission’s tracking system or directly with the consumer protection division of the Ohio Attorney General’s office.

“In six weeks, that’s a lot of violations,” said Michelle Gatchell, spokesperson for Petro’s office. “It seemed like they didn’t even pay attention to the list.”

Shelterguard President Nick Kehagis said that his company did make a mistake in its violations of the law but found the law’s requirements and its status through multiple court challenges confusing and extremely difficult to interpret.

The court challenges “made it very difficult for us to understand if the program was on or off – it was on again, off again,” Kehagis said. “In the meantime, you still have to run a business.”

Shelterguard management had “misinterpreted” the date when the no-call law became effective, believing instead there was a 90-day grace period after the Oct. 1 date. Kehagis said his company also found that there was little assistance available to telemarketing organizations with questions about the law, nor any warnings that complaints had been logged against the company’s telemarketing operations.

Shelterguard is facing up to a $1,500 fine per violation as well as other civil penalties. The state’s lawsuit also seeks a permanent injunction against Shelterguard from making telemarketing calls to people on the national registry, but the case has not yet been heard in court, Gatchell said.

As a result of the injunction, Shelterguard’s nine-person telemarketing staff, including six telemarketers and three managers, were let go. That group performed nearly 40 percent of the security company’s marketing efforts.

At press time, Kehagis and the attorney general’s office were discussing settlement possibilities, which included providing equipment and monitoring services to about 50 low-income senior citizens in the Columbus area, he said.

Despite the confusion surrounding the bill, companies need to make sure every efforts is made to comply with the law, according to national telemarketing consultant Mitchell Eaves.

“They must learn, educate themselves into complying with the law,” Eaves said. “If they don’t, they are breaking the law.”

Eaves said only about 10 percent of security companies use telemarketing as part of their marketing efforts, a method growing increasingly more difficult with the passage of the federal no call registry and as more states formulate their own no-call lists.