Settlement reached in local suit over do-not-call violations

Kevin Rademacher

Thursday, Feb. 17, 2005 | 10:39 a.m.

A Las Vegas telemarketing company sued last summer for violating the rules of the federal do-not-call registry has reached a settlement that promises to silence the phones.

Braglia Marketing Group LLC and its owners, Frank and Kate Braglia, were the first in the nation to be sued solely for violating rules of the registry. The settlement, announced on Wednesday, bars the defendants from owning more than 5 percent of a telemarketing company or directing a telemarketing operation.

The settlement also required a civil penalty of $526,000, but the amount was reduced to $3,500 "based upon their demonstrated inability to pay," a statement from the Federal Trade Commission said.

Jen Schwartzman, a spokeswoman for the FTC, said that if evidence is later found indicating that the Braglias misrepresented their financial situation the FTC could reinstate the entire judgement.

Las Vegas business license records for Braglia Marketing lists its address as 4495 W. Hacienda Ave., Suite 7. The phone number listed for the company was out of service.

"We believe that they are out of the telemarketing business," Schwartzman said.

The original lawsuit claimed the company made more than 300,000 calls to consumers who were on the registry. Under the rules of the do-not-call registry, each violation carries a possible $11,000 penalty, which could have led to $3.3 billion in fines for BMG.

The lawsuit also claimed that BMG has made more than 10,000 calls to consumers without first paying a required annual fee to access the registry of numbers. The FTC also alleged that the company abandoned calls by failing to connect consumers with a representative within two seconds of answering the phone.

Schwartzman said the FTC has pursued other legal action regarding the do-not-call registry, but those cases also involved misrepresentations to consumers. In those cases the FTC sought to recover fraudulently obtained funds on behalf of those consumers.

The Braglia case, she said, is still the first in which a company is being pursued solely for violating the rules of the do-not-call registry.

Wednesday's settlement includes two timeshare sales companies -- Flagship Resort Development Corp. and Atlantic Palace LLP -- which were contracting with BMG to market their properties. The New Jersey companies will pay a combined $500,000 in penalties and were ordered to comply with registry rules.

"My clients have always made a good faith effort to comply with the national do-not-call list," said Frank Gorman, an attorney representing Flagship Resort and Atlantic Palace. "Nonetheless they have now redoubled their efforts."