Dish Networks rings up big fine for breaking telemarketing rules

Last Updated Jun 6, 2017 6:31 PM EDT

Dish Network (DISH) has been been slapped with what federal prosecutors say is the biggest ever fine for breaking laws aimed at limiting telemarketing calls. 

A court ruled that the satellite TV and broadband provider must pay $280 million for violating Federal Trade Commission rules, including calling consumers who had registered for the federal "Do Not Call" registry. Under the ruling, the federal government will collect $168 million, while California, Illinois, North Carolina and Ohio will get the rest. 

"The outcome of this case shows companies will pay a hefty price for violating consumers' privacy with unwanted calls," Acting FTC chief Maureen Ohlhausen said in a statement. 

The U.S. Department of Justice filed suit against Dish in 2009, but the case didn't go to court until January of 2016, when it was taken up by U.S. District Judge Sue Myerscough of the Central District of Illinois. After a trial lasting five weeks, she ruled on Tuesday that Dish invaded people's privacy, finding that the company knew, or should've known, that it was breaking the law.

Myerscough also found that Dish was liable for telemarketing violations committed by its call centers. "Dish's reckless decision to use anyone with a call center without any vetting or meaningful supervision demonstrates a disregard for the consuming public," she wrote in a 475-page opinion.  

Although the FTC created the Do Not Call registry in 2003 to block unwanted phone solicitations, Americans received some 29 billion calls in 2016. In 2015, the agency said Dish was liable for more than 57 million calls that violated telemarketing rules.

In May, a federal judge in North Carolina tripled the award for 50,000 state residents who were called by Dish in breach of the Do Not Call rules. They could be eligible to receive up to $1,200 each. 

Dish said it will appeal the ruling.

"The amounts awarded in this case radically and unjustly exceed, by orders of magnitude, those found in the settlements in similar actions, notably against DirecTV, Comcast and Caribbean Cruise Lines," the company said in a statement. "Dish is being held responsible for telemarketing activities conducted by independent third-parties, including in circumstances where such third-parties intentionally hid their telemarketing efforts from Dish."

Dish shares slid on news of the financial penalty, falling $1.61, or 2.4 percent, to $64.58.

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