FTC Seeks to Put Telemarketer on Permanent Hold

Defendants Allegedly Called 900,000 Phone Numbers On Do Not Call Registry

For Release

People may sleep better if the Federal Trade Commission succeeds in its effort to stop a marketer of adjustable beds from calling telephone numbers listed on the National Do Not Call (DNC) Registry. The FTC announced today that the U.S. Department of Justice (DOJ) has filed a complaint on its behalf against the Nevada-based company and its chief executive for allegedly making at least 900,000 unlawful calls since October 2003.

FMFG, Inc. allegedly called consumers asking to take a survey of their sleep habits and then made a sales pitch – genuine survey calls are exempt from the DNC provisions of the Commission’s Telemarketing Sales Rule. They also allegedly called consumers to schedule sales presentations in their homes.

“This should be a warning to all telemarketers,” said Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection. “You can’t evade the Do Not Call Rule by disguising sales calls as surveys.”

According to the Commission, the defendants broke federal laws when they, or others on their behalf, called DNC-registered phone numbers, “abandoned” calls by failing to connect the call to a sales representative within two seconds of a phone being answered, and made telemarketing calls without first paying the annual fee for access to phone numbers listed on the DNC registry.

The company, owned by Kurt G. Cuddy, also did business as American Adjustable Beds, Tranquility Adjustable Beds, and California Sleep Research.

The Commission is seeking civil penalties and a permanent injunction against the defendants. The Commission authorized the complaint filing by a 4-0 vote. On December 29, the DOJ filed the complaint in U.S. District Court for the District of Nevada.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.

Copies of the complaint are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. 0423155)

Contact Information

Media Contact:

Mitch Katz,
Office of Public Affairs
202-326-2161

Frank Dorman,
Office of Public Affairs
202-326-2674

Staff Contact:
Sarah Schroeder, Linda K. Badger, Laura Fremont
Western Region Office - San Francisco
415-848-5186