Many businesses have felt the panic and frustration of getting sued for violating the Telephone Consumer Protection Act ("TCPA") in situations where they had no idea how plaintiffs received any calls or text messages from them. Sometimes, it seems, these unknown calls and text messages come from the less scrupulous in the industry and try to capitalize on an advertiser's name without permission. When faced with a similar situation recently, Marriott decided to fight back. In a case in Virginia federal court, Marriott sued ten telemarketers who allegedly tried to use the Marriott name (without permission) to sell resort packages and other promotions. Among other telemarketing law violations, Marriott claims that these telemarketers used the hotel's trademarks without permission in an effort to sell resort packages having no connection to the company. The Marriott telemarketing case may serve as a new avenue for advertisers to travel in an effort to combat unauthorized telemarketing.
What are the details of the Marriott telemarketing case?
Marriott learned that many consumers were receiving unwanted calls from telemarketers trying to sell vacation packages. These telemarketers used the Marriott name (without permission) in an attempt to fool consumers into thinking that the packages were Marriott's. To combat this potentially fraudulent behavior, Marriott conducted an investigation to find the companies placing these unauthorized calls that improperly used its trademarks.
When it discovered ten such companies, Marriott took its claims to federal court, seeking damages and an injunction to stop behavior that it alleges violates trademark law, telemarketing fraud laws, and Federal Trade Commission regulations (including the Telemarketing Sales Rule). Should Marriott prevail in court, its claims could add up to tens or even hundreds of thousands of dollars in damages, not including any potential indemnity obligations triggered by these deceptive calls. While the case is in its early stages, it may, nevertheless, represent a bold new strategy to combat unauthorized telemarketing calls through use of trademark law.
Why does the Marriott telemarketing case matter to your business?
Like many sectors, the telemarketing industry includes a certain percentage of companies that choose to do business outside of the legal lines. Telemarketers and advertisers must be on guard for others trading on their names and goodwill. The bigger the brand, the more likely that bad actors are going to try to use that brand to either sell products or hide behind the brand to avoid liability or detection.
So the question this case presents is: how do you protect your business against a situation like the one that Marriott is facing in this proceeding? No one can completely avoid ending up like Marriott. However, you can take several actions to minimize that risk, including:
- Perform thorough due diligence on all vendors that make calls or send text messages on your behalf;
- Keep track of telemarketing complaints, and investigate suspicious activity in a timely fashion; and
- Update your contracts to include strong indemnity and liability protections so that any vendors that subcontract out their calling duties are responsible for their agents.
Hire experienced telemarketing attorneys.
Reworking contractual protections, developing investigative protocols, and performing due diligence are pivotal, but time-consuming tasks. Telemarketers must also consider how to combat liability for any calls that allegedly violate state and federal telemarketing laws. Hiring experienced telemarketing attorneys can help your business protect itself. The attorneys at Klein Moynihan Turco LLP ("KMT") have years of experience in all things telemarketing law and can help your business maintain compliance. KMT can also help you with updating your telemarketing practices to protect your business from unscrupulous behavior.
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