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Federal Communications Commission
Washington, D.C. 20554
In the Matter of
Presidential Who's Who, Inc.
Presidential Who's Who
File No.: EB-TCD-12-00000217
NAL/Acct. Nos.: 201132170023, 201032170005
Adopted: March 27, 2014 Released: March 28, 2014
By the Commission:
We impose a penalty of $640,000 against Presidential Who's Who, Inc., for faxing more than 100 advertisements to consumers who did not request them, did not want them, and had no established business relationship with the company. Presidential Who's Who persisted in this conduct after Commission staff issued the company a formal citation, explained that its actions were unlawful, and warned that additional junk faxing could result in monetary forfeitures. Given that Presidential Who's Who failed to heed this warning, the Commission proposed $640,000 in penalties through two prior Notices of Apparent Liability for Forfeiture of $345,000 and $295,000. Since that time, Presidential Who's Who has not offered a satisfactory defense for its actions, or satisfactory support for its claim that it cannot pay the proposed penalties. Due to the large number of violations at issue, the company's apparently intentional misconduct, and its failure to provide full and updated support for its inability to pay, we impose the total forfeiture of $640,000.
Congress enacted the Telephone Consumer Protection Act of 1991 (TCPA) to address problems of abusive telemarketing, including junk faxes. Unsolicited faxes often impose unwanted burdens on the called party, including costs of paper and ink, and make fax machines unavailable for legitimate business messages. Section 227(b)(1)(C) of the Act makes it "unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States . . . to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement."
Pursuant to Section 503(b)(5) of the Act, the Enforcement Bureau (Bureau) issued a citation to Presidential Who's Who on June 18, 2008, in response to one or more consumer complaints alleging that Presidential Who's Who had faxed unsolicited advertisements. The Bureau cited Presidential Who's Who for using a telephone facsimile machine, computer, or other device, to send an unsolicited advertisement for entry in and sale of the publication "Presidential Who's Who" to a telephone facsimile machine, in violation of Section 227(b)(1)(C) of the Act and Section 64.1200(a)(4) of the Commission's rules. Mr. Frank Ciaccio, on behalf of Presidential Who's Who, requested an interview and claimed that the fax on which the citation was based was not an advertisement. During the interview, staff informed Mr. Ciaccio that the fax in question was, in fact, an advertisement.
Subsequently, the Commission received numerous complaints alleging that Presidential Who's Who continued to engage in the same conduct, and thus continued to violate Section 227(b)(1)(C) of the Act and Section 64.1200(a)(4) of the Commission's rules. These violations, which occurred after the citation, led the Commission to issue two NALs against Presidential Who's Who pursuant to Section 503(b)(4) of the Act.
In the September 2010 NAL, the Commission proposed a forfeiture of $345,000 based on 69 consumer complaints alleging 73 violations of our junk fax rules. The NAL gave Presidential Who's Who an opportunity to file a written response seeking to reduce or cancel the proposed forfeiture. In early January, Mr. Ciaccio requested an extension of time to respond to the NAL. On January 26, 2011, Mr. Ciaccio submitted a response identifying the websites from which Presidential Who's Who claims it obtained the fax numbers associated with the consumers who filed complaints against the company. Mr. Ciaccio stated that, "[a]s we understand the law, these numbers were obtained legally and not a single one of the fax numbers in question had a do not solicit notification attached to it." Although Bureau staff asked Mr. Ciaccio to submit further information to show how the numbers were obtained "legally," he declined to do so.
In the June 2011 NAL, the Commission proposed a forfeiture of $295,000. In response to the June 2011 NAL, on August 12, 2011, Mr. Ciaccio requested a meeting via teleconference with Commission staff. On August 17, 2011, staff conducted the meeting during which Mr. Ciaccio admitted sending the faxes, but argued that the faxes were legal because, in his view, the Commission had not warned him that the faxes violated the Act and/or the Commission's rules. Additionally, Mr. Ciaccio indicated that the company was unable to pay the proposed forfeiture amounts, and subsequently submitted some tax documentation in support.
Section 503(b)(2)(D) authorizes the Commission to assess a maximum forfeiture of $16,000 per violation against an entity such as Presidential Who's Who. In exercising such authority, the Commission must consider "the nature, circumstances, extent, and gravity of the violation and, with respect to the violator, the degree of culpability, any history of prior offenses, ability to pay, and such other matters as justice may require." As discussed above, the Commission issued two separate NALs to Presidential Who's Who and proposed a total forfeiture of $640,000.
In its responses to the two NALs, Presidential Who's Who raises three arguments. First, Presidential Who's Who claims that it did not have sufficient notice that the faxes it sent qualified as unsolicited facsimile advertisements. Second, the company contends it "legally" obtained the numbers to which it directed the faxes from websites, such that it was authorized to send the faxes to the fax recipients. Finally, the company asserts that it cannot afford to pay the forfeitures proposed against the company in both the September 2010 NAL and June 2011 NAL.
Legal Status of Faxes and Notice. As the Bureau did in its citation and the Commission did in both of its NALs, we conclude that the facsimiles that Presidential Who's Who sent to consumers constitute unsolicited facsimile advertisements, and we find that Presidential Who's Who had notice of that fact. The faxes at issue offer entry in the publication "Presidential Who's Who" and advertise that publication either explicitly or in conjunction with follow-up telephone calls from Presidential Who's Who. At best, the faxes serve as part of an "overall marketing campaign to sell property, goods, or services"; thus, for purposes of the junk fax rules, they are unsolicited facsimile advertisements.
Presidential Who's Who had ample notice that its faxes constituted unsolicited facsimile advertisements. For one, the citation the Bureau issued provided sufficient notice of the law and the fact that the faxes sent by Presidential Who's Who violated the junk-fax rules. For another, in the interview between Mr. Ciaccio and Bureau staff that followed the company's challenge to the Bureau's citation, staff explained the law: the faxes are "pretexts" to an advertisement and are thus prohibited under the Act and the Commission's rules. Even without such warnings, ignorance of the law "does not exonerate, excuse, or mitigate violations." Notwithstanding the notice and warnings, Presidential Who's Who continued to fax unsolicited advertisements at least seventy-three more times over the next several months, which resulted in the September 2010 NAL. Although Presidential Who's Who was again notified of its unlawful conduct with that NAL, the company continued to engage in unlawful conduct by sending at least thirty-one additional unsolicited advertisements, which resulted in the June 2011 NAL. Accordingly, we conclude that the company had notice that its activities were unlawful.
"Legally" Obtained Fax Numbers. Pursuant to both the Act and the Commission's rules, a fax sender must have an EBR with the recipient to send an unsolicited advertisement via facsimile. Presidential Who's Who maintains that it obtained the fax numbers from public websites. Yet, "[t]he fact that a facsimile number was made available in a directory, advertisement or website does not alone entitle a person to send a facsimile advertisement to that number." Presidential Who's Who never claimed to have an EBR with the fax recipients who filed complaints, nor did it ever demonstrate that these recipients gave their permission to receive fax transmissions. Accordingly, we find that Presidential Who's Who's claim that it obtained the fax numbers legally is irrelevant to the question of whether it violated the TCPA.
Inability to Pay. We decline to reduce the forfeiture proposed against Presidential Who's Who based on its claimed inability to pay the full amount of the forfeiture. The Commission generally considers a company's gross revenues to be the best indicator of a company's ability to pay a forfeiture. Parties must support a claim of inability to pay with federal tax returns for the most recent three-year period and/or some other reliable and objective documentation that accurately reflects the party's current financial status.
Presidential Who's Who originally produced tax returns to try to support its claim, but it has failed to provide more current and updated information, notwithstanding the Bureau's request that it do so. In November 2011, Presidential Who's Who produced its 2008, 2009, and 2010 tax returns. A year later, in November 2012, Bureau staff communicated with Mr. Ciaccio about potential settlement, and at that time he claimed that Presidential Who's Who had gone out of business shortly after submitting its tax returns to the Bureau in 2011. Staff asked Mr. Ciaccio to provide evidence of the change in the operating status of Presidential Who's Who, as well as updated financial information. Mr. Ciaccio appeared poised to provide these materials, asking for (and receiving) an extension of the staff's original deadline for submission, but that date came and went without Mr. Ciaccio submitting any of the requested materials. Staff has since attempted to communicate with him about his failure to provide the information needed to assess his claims and the current financial wherewithal of the company, but these efforts have been unsuccessful. Moreover, New York State records indicate that "Presidential Who's Who Inc." is an active corporation, and other information suggests an upswing in the financial situation of Presidential Who's Who in 2012.
Even if Presidential Who's Who had provided updated financial information to support its claimed inability to pay, such evidence must be weighed against the nature of its misconduct. As indicated, "ability to pay" is but one factor the Commission must consider in determining the amount of any forfeiture penalty; the Commission must also consider "the nature, circumstances, extent, and gravity of the violation and, with respect to the violator, the degree of culpability, any history of prior offenses, . . . and such other matters as justice may require." Our forfeiture guidelines indicate that we may adjust forfeitures upward when certain aggravating factors are present, such as when egregious misconduct or substantial harm is involved, or when the violator has intentionally, continuously, or repeatedly violated the law. Applying these factors here, the evidence shows that Presidential Who's Who continuously and repeatedly violated the junk fax prohibition, as indicated by approximately 100 complaints. The evidence also shows that the company appears to have done so intentionally, given its repeated violations after receiving warning that its conduct was unlawful.
Weighing the factors enumerated in the Act and our forfeiture guidelines, we find that Presidential Who's Who has not produced sufficient current financial information to support its claimed inability to pay the forfeiture proposed against it, and that its conduct appears to have been continuous, repeated, and intentional. Accordingly, we decline to reduce the forfeiture proposed against Presidential Who's Who.
We affirm our findings in the previous NALs against Presidential Who's Who, and we find no reason to adjust the forfeitures proposed in those NALs. We therefore impose a forfeiture of $640,000 against Presidential Who's Who for willful and repeated violations of Section 227(b)(1)(C) of the Act and Section 64.1200(a)(4) of the Commission's rules.
Accordingly, IT IS ORDERED that, pursuant to Section 503(b) of the Communications Act of 1934, as amended, 47 U.S.C. § 503(b), and Section 1.80(f)(4) of the Commission's rules, 47 C.F.R. § 1.80(f)(4), Presidential Who's Who IS LIABLE FOR A MONETARY FORFEITURE to the United States Government in the sum of $640,000 for willfully and repeatedly violating Section 227(b)(1)(C) of the Communications Act, 47 U.S.C. § 227(b)(1)(C), and Section 64.1200(a)(4) of the Commission's rules, 47 C.F.R. § 64.1200(a)(4).
Payment of the forfeiture shall be made in the manner provided for in Section 1.80 of the Rules within thirty (30) calendar days after the release date of this Forfeiture Order. If the forfeiture is not paid within the period specified, the case may be referred to the U.S. Department of Justice for enforcement of the forfeiture pursuant to Section 504(a) of the Act. Presidential Who's Who shall send electronic notification of payment to Johnny Drake at Johnny.Drake@fcc.gov, Rosemary Cabral at Rosemary.Cabral@fcc.gov, and Phillip Priesman at Phillip.Priesman@fcc.gov on the date said payment is made.
The payment must be made by check or similar instrument, wire transfer, or credit card, and must include the NAL/Account number and FRN referenced above. Regardless of the form of payment, a completed FCC Form 159 (Remittance Advice) must be submitted. When completing the FCC Form 159, enter the Account Number in block number 23A (call sign/other ID) and enter the letters "FORF" in block number 24A (payment type code). Below are additional instructions Presidential Who's Who should follow based on the form of payment it selects:
* Payment by check or money order must be made payable to the order of the Federal Communications Commission. Such payments (along with the completed Form 159) must be mailed to Federal Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000, or sent via overnight mail to U.S. Bank - Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO 63101.
* Payment by wire transfer must be made to ABA Number 021030004, receiving bank TREAS/NYC, and Account Number 27000001. To complete the wire transfer and ensure appropriate crediting of the wired funds, a completed Form 159 must be faxed to U.S. Bank at (314) 418-4232 on the same business day the wire transfer is initiated.
* Payment by credit card must be made by providing the required credit card information on FCC Form 159 and signing and dating the Form 159 to authorize the credit card payment. The completed Form 159 must then be mailed to Federal Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000, or sent via overnight mail to U.S. Bank - Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO 63101.
Any request for full payment under an installment plan should be sent to: Chief Financial Officer -- Financial Operations, Federal Communications Commission, 445 12th Street, S.W., Room 1-A625, Washington, D.C. 20554. If Presidential Who's Who has questions regarding payment procedures, it should contact the Financial Operations Group Help Desk by phone, 1-877-480-3201, or by e-mail, ARINQUIRIES@fcc.gov.
IT IS FURTHER ORDERED that a copy of the Forfeiture Order shall be sent by mail and certified mail return receipt requested to Presidential Who's Who, Inc., Attention: Frank Ciaccio, President and Chief Executive Officer, and Mark Anthony McGuinness, Chief Operating Officer, 134 Rockaway Avenue, Valley Stream, NY 11580.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch