Federal Communications Commission FCC 07-146 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of QuoteMaster USA, Ltd. Apparent Liability for Forfeiture ) ) ) ) ) ) ) ) ) File No. EB-02-TC-193 NAL/Acct. No. 200732170069 FRN: 0016773566 NOTICE OF APPARENT LIABILITY FOR FORFEITURE Adopted: August 13, 2007 Released: August 14, 2007 By the Commission: I. INTRODUCTION 1. In this Notice of Apparent Liability for Forfeiture (“NAL”)1, we find that QuoteMaster USA, Ltd. (“QuoteMaster”)2 apparently willfully or repeatedly violated section 227 of the Communications Act of 1934, as amended (“Act”), and the Commission’s related rules and orders, by delivering at least six unsolicited advertisements to the telephone facsimile machines of at least five consumers.3 Based on the facts and circumstances surrounding these apparent violations, we find that 1 See 47 U.S.C. § 503(b)(1). The Commission has the authority under this section of the Act to assess a forfeiture against any person who has “willfully or repeatedly failed to comply with any of the provisions of this Act or of any rule, regulation, or order issued by the Commission under this Act ....” See also 47 U.S.C. § 503(b)(5) (stating that the Commission has the authority under this section of the Act to assess a forfeiture penalty against any person who is not a common carrier so long as such person (A) is first issued a citation of the violation charged; (B) is given a reasonable opportunity for a personal interview with an official of the Commission, at the field office of the Commission nearest to the person’s place of residence; and (C) subsequently engages in conduct of the type described in the citation). 2 According to publicly available information, QuoteMaster is also doing business as “David Kleinhandler & Associates,” and “The Kleinhandler Corporation.” Therefore, all references in this NAL to “QuoteMaster” encompass QuoteMaster as well as “David Kleinhandler & Associates,” and “The Kleinhandler Corporation.” QuoteMaster has offices at 420 Lexington Ave., New York, NY, 10170-0002; 171 Madison Ave., New York, NY, 10016; 180 Madison Ave., New York, NY 10016; and 36 W. 44th St., New York, NY 10036. David Kleinhandler, President and Chief Executive Officer; Robert Bland, President and Sales Executive; and Joseph Galluzzi, Owner; are listed as the contact persons for QuoteMaster. Accordingly, all references in this NAL to QuoteMaster also encompass the foregoing individuals and all other principals and officers of this entity, as well as the corporate entity itself. 3 See 47 U.S.C. § 227(b)(1)(C); 47 C.F.R. § 64.1200(a)(3); see also Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Report and Order and Third Order on Reconsideration, 21 FCC Rcd 3787 (2006). Federal Communications Commission FCC 07-146 2 QuoteMaster is apparently liable for a forfeiture in the amount of $43,500. II. BACKGROUND 2. 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.”4 The term “unsolicited advertisement” is defined in the Act and the Commission’s rules as “any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person’s prior express invitation or permission in writing or otherwise.”5 Under the Commission’s rules, an “established business relationship”6 exception permits a party to deliver a message to a consumer if the sender has an established business relationship with the recipient and the sender obtained the number of the facsimile machine through the voluntary communication by the recipient, directly to the sender, within the context of the established business relationship, or through a directory, advertisement, or a site on the Internet to which the recipient voluntarily agreed to make available its facsimile number for public distribution.7 3. On August 13, 2002, in response to one or more consumer complaints alleging that QuoteMaster had faxed unsolicited advertisements, the Commission staff issued a citation8 to QuoteMaster, pursuant to section 503(b)(5) of the Act.9 The staff cited QuoteMaster for using a telephone facsimile machine, computer, or other device, to send unsolicited advertisements to a telephone facsimile machine, in violation of section 227 of the Act and the Commission’s related rules and orders. The citation, which the staff served by certified mail, return receipt requested, warned QuoteMaster that subsequent violations could result in the imposition of monetary forfeitures of up to $11,000 per violation, and included a copy of the consumer complaints that formed the basis of the citation.10 The citation informed QuoteMaster that within 21 days of the date of the citation, it could either request an interview with Commission staff, or could provide a written statement responding to the citation. QuoteMaster did not request an interview or otherwise respond to the citation. 4. Despite the citation’s warning that subsequent violations could result in the imposition of monetary forfeitures, we have received five additional consumer complaints indicating that QuoteMaster continued to engage in such conduct after receiving the citation.11 We base our action here specifically on complaints filed by five consumers establishing that QuoteMaster continued to send six unsolicited 4 47 U.S.C. § 227(b)(1)(C); 47 C.F.R. § 64.1200(a)(3). 5 47 U.S.C. § 227(a)(4); 47 C.F.R. § 64.1200(f)(13). 6 An “established business relationship” is defined as a prior or existing relationship formed by a voluntary two-way communication “with or without an exchange of consideration, on the basis of an inquiry, application, purchase or transaction by the business or residential subscriber regarding products or services offered by such person or entity, which relationship has not been previously terminated by either party.” 47 C.F.R. § 64.1200(f)(5). 7 See 47 U.S.C. § 227(b)(1)(C); 47 C.F.R. § 64.1200(a)(3)(i), (ii). 8 Citation from Colleen Heitkamp, Chief, Telecommunications Consumers Division, Enforcement Bureau, File No. EB-02-TC-193, issued to QuoteMaster on August 13, 2002. 9 See 47 U.S.C. § 503(b)(5) (authorizing the Commission to issue citations to persons who do not hold a license, permit, certificate or other authorization issued by the Commission or an applicant for any of those listed instrumentalities for violations of the Act or of the Commission’s rules and orders). 10 Commission staff mailed the citation to 36 W. 44th St., Suite 1100, New York, NY 10036; 803 Pondside Dr., White Plains, NY 10607; and 180 Madison Ave., New York, NY 10016. See n.2, supra. 11 See Appendix for a listing of the consumer complaints against QuoteMaster requesting Commission action. Federal Communications Commission FCC 07-146 3 advertisements to telephone facsimile machines after the date of the citation.12 5. Section 503(b) of the Act authorizes the Commission to assess a forfeiture of up to $11,000 for each violation of the Act or of any rule, regulation, or order issued by the Commission under the Act by a non-common carrier or other entity not specifically designated in section 503 of the Act.13 In exercising such authority, we are to take into account “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.”14 III. DISCUSSION A. Violations of the Commission’s Rules Restricting Unsolicited Facsimile Advertisements 6. We find that QuoteMaster apparently violated section 227 of the Act and the Commission’s related rules and orders by using a telephone facsimile machine, computer, or other device to send at least six unsolicited advertisements to the five consumers identified in the Appendix. This NAL is based on evidence that the consumers received unsolicited fax advertisements from QuoteMaster after the Bureau’s citation. The facsimile transmissions advertise life insurance products. Further, according to the complaints, the consumers neither had an established business relationship with QuoteMaster, nor gave QuoteMaster permission to send the facsimile transmissions.15 The faxes at issue here therefore fall within the definition of an “unsolicited advertisement.”16 Based on the entire record, including the consumer complaints, we conclude that QuoteMaster apparently violated section 227 of the Act and the Commission’s related rules and orders by sending six unsolicited advertisements to five consumers’ facsimile machines. B. Proposed Forfeiture 7. We find that QuoteMaster is apparently liable for a forfeiture in the amount of $43,500. Although the Commission’s Forfeiture Policy Statement does not establish a base forfeiture amount for violating the prohibition against using a telephone facsimile machine to send unsolicited advertisements, the Commission has previously considered $4,500 per unsolicited fax advertisement to be an appropriate 12 We note that evidence of additional instances of unlawful conduct by QuoteMaster may form the basis of subsequent enforcement action. 13 Section 503(b)(2)(C) provides for forfeitures up to $10,000 for each violation in cases not covered by subparagraph (A) or (B), which address forfeitures for violations by licensees and common carriers, among others. See 47 U.S.C. § 503(b). In accordance with the inflation adjustment requirements contained in the Debt Collection Improvement Act of 1996, Pub. L. 104-134, Sec. 31001, 110 Stat. 1321, the Commission implemented an increase of the maximum statutory forfeiture under section 503(b)(2)(C) to $11,000. 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); see also Amendment of Section 1.80(b) of the Commission’s Rules and Adjustment of Forfeiture Maxima to Reflect Inflation, 19 FCC Rcd 10945 (2004) (this recent amendment of section 1.80(b) to reflect inflation left the forfeiture maximum for this type of violator at $11,000). 14 47 U.S.C. § 503(b)(2)(D); The Commission’s Forfeiture Policy Statement and Amendment of Section 1.80 of the Rules to Incorporate the Forfeiture Guidelines, Report and Order, 12 FCC Rcd 17087, 17100-01 para. 27 (1997) (Forfeiture Policy Statement), recon. denied, 15 FCC Rcd 303 (1999). 15 See, e.g., complaint dated December 21, 2006, from Steven C. Thomas stating that “[QuoteMaster] continue[s] to fax unwanted material to me even when I use their ‘opt out’ telephone number.” The complainants involved in this action are listed in the Appendix below. 16 See 47 U.S.C. § 227(a)(4); 47 C.F.R. § 64.1200(f)(13) (definition previously at § 64.1200(f)(10)). Federal Communications Commission FCC 07-146 4 base amount.17 We apply that base amount to each of three of the apparent violations. In addition, where the consumer requests the company to stop sending facsimile messages, and the company continues to send them, the Commission has previously considered $10,000 per unsolicited fax advertisement the appropriate forfeiture for such egregious violations.18 Here, two consumers specifically requested that QuoteMaster cease sending facsimiles. Notwithstanding these requests, an additional three facsimiles were sent to these consumers. Thus, we apply the $10,000 amount to each of three of the apparent violations. Thus, a total forfeiture of $43,500 is proposed. QuoteMaster will have the opportunity to submit evidence and arguments in response to this NAL to show that no forfeiture should be imposed or that some lesser amount should be assessed.19 IV. CONCLUSION AND ORDERING CLAUSES 8. We have determined that QuoteMaster USA, Ltd. apparently violated section 227 of the Act and the Commission’s related rules and orders by using a telephone facsimile machine, computer, or other device to send at least six unsolicited advertisements to the five consumers identified in the Appendix. We have further determined that QuoteMaster is apparently liable for a forfeiture in the amount of $43,500. 9. Accordingly, IT IS ORDERED, pursuant to section 503(b) of the Act, and section 1.80 of the Rules, 47 C.F.R. § 1.80, 47 U.S.C. § 503(b), that QuoteMaster is hereby NOTIFIED of this APPARENT LIABILITY FOR A FORFEITURE in the amount of $43,500 for willful or repeated violations of section 227(b)(1)(C) of the Communications Act, 47 U.S.C. § 227(b)(1)(C), sections 64.1200(a)(3) of the Commission’s rules, 47 C.F.R. § 64.1200(a)(3), and the related orders described in the paragraphs above. 10. IT IS FURTHER ORDERED THAT, pursuant to section 1.80 of the Commission’s rules,20 within thirty (30) days of the release date of this Notice of Apparent Liability for Forfeiture, QuoteMaster USA, Ltd. SHALL PAY the full amount of the proposed forfeiture or SHALL FILE a written statement seeking reduction or cancellation of the proposed forfeiture. 11. Payment by check or money order, payable to the order of the “Federal Communications Commission,” may be mailed to Forfeiture Collection Section, Finance Branch, Federal Communications Commission, P.O. Box 358340, Pittsburgh, PA 15251. Payment by overnight mail may be sent to Mellon Client Service Center, 500 Ross Street, Room 670, Pittsburgh, PA 15262-0001, Attn: FCC Module Supervisor. Payment by wire transfer may be made to: ABA Number 043000261, receiving bank Mellon Bank, and account number 911-6229. The payment should note NAL/Acct. No. 200732170069. 12. The response, if any, must be mailed both to the Office of the Secretary, Federal Communications Commission, 445 12th Street, SW, Washington, DC 20554, ATTN: Enforcement Bureau – Telecommunications Consumers Division, and to Colleen Heitkamp, Chief, Telecommunications Consumers Division, Enforcement Bureau, Federal Communications Commission, 17 See Get-Aways, Inc., Notice of Apparent Liability For Forfeiture, 15 FCC Rcd 1805 (1999); Get-Aways, Inc., Forfeiture Order, 15 FCC Rcd 4843 (2000); see also US Notary, Inc., Notice of Apparent Liability for Forfeiture, 15 Rcd 16999 (2000); US Notary, Inc., Forfeiture Order, 16 FCC Rcd 18398 (2001); Tri-Star Marketing, Inc., Notice of Apparent Liability For Forfeiture, 15 FCC Rcd 11295 (2000); Tri-Star Marketing, Inc., Forfeiture Order, 15 FCC Rcd 23198 (2000). 18 See Carolina Liquidators, Inc., Notice of Apparent Liability for Forfeiture, 15 FCC 16,837, 16,842 (2000); 21st Century Fax(es) Ltd., AKA 20th Century Fax(es), 15 FCC Rcd 24,406, 24,411 (2000). 19 See 47 U.S.C. § 503(b)(4)(C); 47 C.F.R. § 1.80(f)(3). 20 47 C.F.R. § 1.80. Federal Communications Commission FCC 07-146 5 445 12th Street, SW, Washington, DC 20554, and must include the NAL/Acct. No. referenced in the caption. 13. The Commission will not consider reducing or canceling a forfeiture in response to a claim of inability to pay unless the petitioner submits: (1) federal tax returns for the most recent three- year period; (2) financial statements prepared according to generally accepted accounting practices; or (3) some other reliable and objective documentation that accurately reflects the petitioner’s current financial status. Any claim of inability to pay must specifically identify the basis for the claim by reference to the financial documentation submitted. 14. Requests for payment of the full amount of this Notice of Apparent Liability for Forfeiture under an installment plan should be sent to: Chief, Revenue and Receivables Operations Group, 445 12th Street, SW, Washington, DC 20554.21 15. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability for Forfeiture shall be sent by Certified Mail Return Receipt Requested to QuoteMaster USA, Ltd., Attention: David Kleinhandler, Robert Bland and Joseph Galluzzi, 420 Lexington Ave., Suite 2516, New York, NY 10170-0002; 171 Madison Ave., New York, NY 10016; 180 Madison Ave, New York, NY 10016; and 36 W. 44th St., New York, NY 10036. FEDERAL COMMUNICATIONS COMMISSION Marlene H. Dortch Secretary 21 47 C.F.R. § 1.1914. Federal Communications Commission FCC 07-146 6 APPENDIX Complainant sent facsimile solicitations Violation Date(s) Rosalind Kovacs August 15, 2006 Harold Brown August 16, 2006 Bernard Shine August 17, 2006 Complainant sent facsimile solicitations after requesting no more be sent Violation Date(s) Steven Thomas August 15, 2006 August 15, 2006 Niz Brown August 16, 2006