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Federated Payment Systems, LLC

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Released: August 25, 2009

Federal Communications Commission

FEDERAL COMMUNICATIONS COMMISSION

WASHINGTON, D.C. 20554



January 23, 2009

VIA CERTIFIED MAIL AND REGULAR MAIL
RETURN RECEIPT REQUESTED

Federated Payment Systems LLC
Attn: Evan Schweitzer
532 Broadhollow Road
Melville, NY 11747
Re: File No. EB-09-TC-014
Dear Mr. Schweitzer:
This is an official

CITATION

, issued pursuant to section 503(b)(5) of the
Communications Act of 1934, as amended (the Act), 47 U.S.C. 503(b)(5), for violations of the
Act and the Federal Communications Commission's rules that govern telephone solicitations and
unsolicited advertisements.1 As explained below, you may appeal this citation. In addition,
future violations of the Act or Commission's rules in this regard may subject you and your
company to monetary forfeitures.2
Attached are consumer complaints regarding telemarketing calls that your company, or
an entity acting on behalf of your company, made to telephone lines that are contained in the
National Do-Not-Call Registry. These complaints indicate that your company, acting under your
direction, has violated the Commission's rules regarding telephone solicitations. See 47 C.F.R.
64.1200(c)(2).
Section 64.1200(c)(2) of the Commission's rules generally prohibits the delivery of
telephone solicitations to residential telephone numbers that are contained in the National Do-
Not-Call Registry except in certain limited situations. Under the Communications Act and the
Commission's rules, a "telephone solicitation" is "the initiation of a telephone call or message


1 47 U.S.C. 227; 47 C.F.R. 64.1200. A copy of these provisions is enclosed for your convenience. Section 227
was added to the Communications Act by the Telephone Consumer Protection Act of 1991 and is most commonly
known as the TCPA. The TCPA and the Commission's parallel rules restrict a variety of practices that are
associated with telephone solicitation and use of the telephone network to deliver unsolicited advertisements,
including prerecorded messages to residential telephone lines.
2 We have attached 1 complaint at issue in this citation. Within the complaint is the telephone number 877-333-
3728 which your business utilized during the time period at issue.

Federal Communications Commission

for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or
services, which is transmitted to any person."3 Calls made by or on behalf of tax-exempt
nonprofit groups are not considered to be telephone solicitations. Similarly, calls that are made
to a person who either has provided prior express invitation or permission to call4 or has an
established business relationship5 with the caller are not considered to be telephone solicitations.
Finally, the rules permit telephone solicitations to a consumer whose number is listed on the
National Do-Not-Call Registry if that consumer has a personal relationship with the individual
making the calls.6
Accordingly, under the Commission's rules, it is unlawful to deliver a telephone
solicitation to a residential telephone line on the National Do-Not-Call Registry unless: (1) the
call is made by or on behalf of a tax-exempt nonprofit group; (2) the call is made by a person
who has a personal relationship with the called party; (3) the called party has provided signed,
written consent for the call to be made; or (4) the called party has made a purchase from, or had a
transaction with, the caller within the 18 months immediately preceding the call or has made an
inquiry or application regarding the caller's products or services within the three months
immediately preceding the call, and the called party has not specifically asked the caller to stop
all telemarketing calls.
Entities making telephone solicitations must honor do-not-call registrations starting no
later than 31 days after a number is placed on the National Do-Not-Call Registry.7 To
accomplish this, section 64.1200(c)(2)(i)(D) requires entities making telephone solicitations to


3 47 U.S.C. 227(a)(4); 47 C.F.R. 64.1200(f)(12).
4 Prior express invitation or permission to call a number contained on the National Do-Not-Call Registry must be
evidenced by a signed, written agreement between a consumer and seller. The agreement must include both the
consumer's consent to be called by the particular seller and the telephone number to which such calls may be placed.
47 C.F.R. 64.1200(c)(2)(ii).
5 An "established business relationship" means "a prior or existing relationship formed by a voluntary two-way
communication between a person or entity and a residential subscriber with or without an exchange of consideration,
on the basis of the subscriber's purchase or transaction with the entity within the eighteen (18) months immediately
preceding the date of the telephone call or on the basis of the subscriber's inquiry or application regarding products
or services offered by the entity within the three months immediately preceding the date of the call, which
relationship has not been previously terminated by either party." 47 C.F.R. 64.1200(f)(4). The established
business relationship exception does not apply when a telephone subscriber has made a company-specific do-not-
call request. A company-specific do-not-call request terminates an established business relationship for
telemarketing purposes even if the requester continues to do business with the company. 47 C.F.R.
64.1200(f)(4)(i); see also Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991,
Report and Order, 7 FCC Rcd 8752, 8766 n.47, 8770 n.63 (1992); see also H.R. Rep. 102-317, 1st Sess., 102nd Cong.
at 15 (1991); Charvat v. Dispatch Consumer Services, Inc., 95 Ohio St. 3d 505, 769 N.E.2d 829 (2002).
6 47 C.F.R. 64.1200(c)(2)(iii). A "personal relationship" exists if the recipient of the call is a "family member,
friend, or acquaintance of the telemarketer making the call." 47 C.F.R. 64.1200(f)(14).
7 The 31-day requirement applies to telephone solicitations made on or after January 1, 2005. Rules and
Regulations Implementing the Telephone Consumer Protection Act of 1991,
Order, 19 FCC Rcd 19215 (2004).
Previously, the Commission's rules provided that do-not-call registrations had to be honored within 3 months. Rules
and Regulations Implementing the Telephone Consumer Protection Act of 1991,
Report and Order, 18 FCC Rcd
14014, 14040, para. 38 (2003). The 3-month provision applied to telephone solicitations made before January 1,
2005.
2

Federal Communications Commission

use a version of the National Do-Not-Call Registry obtained no more than 31 days before any
telephone solicitation is made, and to document this process. Do-not-call registrations must be
honored indefinitely, or until either the consumer cancels the registration or the database
administrator removes the telephone number from the National Do-Not-Call Registry.8 An
entity that does not claim one of the exemptions set forth above is not liable for calling a
telephone number on the National Do-Not-Call Registry only if it is able to demonstrate that it
has fully complied with the Commission's standards governing use of the National Do-Not-Call
Registry as set out in section 64.1200(c)(2)(i)(A)-(E) of the rules, and that the particular
telephone solicitation call was the result of error.

If, after receipt of this citation, you or your company violate the Communications

Act or the Commission's rules in any manner described herein, the Commission may
impose monetary forfeitures not to exceed $11,000 for each such violation or each day of a
continuing violation occurring before September 2, 2008, and $16,000 for each such
violation or each day of a continuing violation occurring on or after September 2, 2008.9

You may respond to this citation within 30 days from the date of this letter either through
(1) a personal interview at the Commission's Field Office nearest to your place of business, or
(2) a written statement. You may use this response to appeal this citation. For example, you
may claim that you are exempt from the telephone solicitation rules,10 that you downloaded and
used the National Do-Not-Call Registry in compliance with our rules but the person's telephone
number was not on that version of the Registry, or that the calls were made in error and should
be covered by the Commission's safe harbor provisions, 47 C.F.R. 64.1200(c)(2)(i). In
addition, your response should specify the actions that you are taking to ensure that you do not
violate the Commission's rules governing telephone solicitation and unsolicited advertisements,
as described above.

You may schedule a personal interview at the nearest Commission field office. These

offices are located in: Atlanta, GA; Boston, MA; Chicago, IL; Columbia, MD; Dallas, TX;
Denver, CO; Detroit, MI; Kansas City, MO; Los Angeles, CA; New Orleans, LA; New
York, NY; Philadelphia, PA; San Diego, CA; San Francisco, CA; Seattle, WA; and Tampa,
FL. Please call Al McCloud at 202-418-2499 if you wish to schedule a personal interview.
You should schedule any interview to take place within 30 days of the date of this letter.
You should send any written statement within 30 days of the date of this letter to:

Kurt A. Schroeder
Deputy Chief


8 47 C.F.R. 64.1200(c)(2).
9 See 47 C.F.R. 1.80(b)(3); Amendment of Section 1.80 of the Commission's Rules and Adjustment of Forfeiture
Maxima to Reflect Inflation
, 15 FCC Rcd 18221 (2000) (forfeiture maximum set at $11,000 for violators who are
not common carriers or other entities specifically designated in section 503 of the Act); Amendment of Section
1.80(b) of the Commission's Rules and Adjustment of Forfeiture Maxima to Reflect Inflation
, 19 FCC Rcd 10945
(2004) (amendment of section 1.80(b) to reflect inflation left the forfeiture maximum for this type of violator at
$11,000); Amendment of Section 1.80(b) of the Commission's Rules, Adjustment of Forfeiture Maxima to Reflect
Inflation,
FCC 08-154, rel. June 13, 2008 (amendment of section 1.80(b) to reflect inflation increased the forfeiture
maximum for this type of violator to $16,000, effective September 2, 2008).
10 See 2003 Order, 18 FCC Rcd at 14042-49; 47 C.F.R. 64.1200(f)(12)(i)-(iii) (exceptions to definition of
"telephone solicitation").
3

Federal Communications Commission

Telecommunications Consumers Division
Enforcement Bureau
Federal Communications Commission
445-12th Street, S.W., Rm. 4-C222
Washington, D.C. 20554

Reference File No. EB-09-TC-014 when corresponding with the Commission.

Reasonable accommodations for people with disabilities are available upon request.
Include a description of the accommodation you will need including as much detail as you can.
Also include a way we can contact you if we need more information. Please allow at least 5 days
advance notice; last minute requests will be accepted, but may be impossible to fill. Send an e-
mail to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau:

For sign language interpreters, CART, and other reasonable accommodations:
202-418-0530 (voice), 202-418-0432 (tty);

For accessible format materials (braille, large print, electronic files, and audio
format): 202-418-0531 (voice), 202-418-7365 (tty).
Under the Privacy Act of 1974, 5 U.S.C. 552(a)(e)(3), we are informing you that the
Commission's staff will use all relevant material information before it, including information
that you disclose in your interview or written statement, to determine what, if any, enforcement
action is required to ensure your compliance with the Communications Act and the
Commission's rules.
The knowing and willful making of any false statement, or the concealment of any
material fact, in reply to this citation is punishable by fine or imprisonment under 18 U.S.C.
1001.
Thank you in advance for your anticipated cooperation.
Sincerely,
Kurt A. Schroeder
Deputy Chief, Telecommunications Consumers Division
Enforcement Bureau
Federal Communications Commission
Enclosures
4

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