Court Rules That Best Buy Violated Federal Telemarketing Reguations

Reversing a summary judgement by a U.S. District Court, the Ninth Circuit Court of Appeals ruled last week that calls from Best Buy to customers asking them to update their Rewards Zone accounts cross the line from informational to telemarketing, in violation of federal law.

This all began back in 2008, when a Best Buy customer purchased a computer and during the process of signing up for an installment payment plan either enrolled voluntarily (the store’s claim) or was enrolled without his consent (his allegation) into Best Buy’s Rewards Zone program.

He claims that he then began receiving unwanted, automated calls from the retail about the rewards program. He attempted to opt out of the program by following recorded instructions and by contacting Best Buy. He was also on the national Do-Not-Call Registry.

After the customer complained to the Washington state Attorney General, Best Buy agreed to put him on its in-house do-not-contact list.

But Best Buy maintains that though members may opt out of receiving marketing communications, the company still has the right to contact Rewards Zone members with program-related communications, such as membership information.

This would explain why in June 2009, the customer received an automated call from Best Buy about “some changes to increase the security of the program and be more environmentally friendly.”

The call continued, “Please listen to the entire message and then go to MyRewardZone.com for details and to update your membership.”

The robot voice also let him know that he’d need to go to the site to provide an e-mail address and that failure to do so would end his participation in the program; that points would no longer roll over from year to year; and that he would need to make one purchase every 12 months to remain in the program.

Best Buy had claimed that this message was purely informational and therefore acceptable under an exemption in the Telephone Consumer Protection Act that allows for non-commercial calls that “do not include the transmission
of any unsolicited advertisement.”

But the appeals court disagreed.

We approach the problem with a measure of common sense. The robot-calls urged the listener to “redeem” his Reward Zone points, directed him to a website where he could further engage with the RZP, and thanked him for “shopping at Best Buy.” Redeeming Reward Zone points required going to a Best Buy store and making further purchases of Best Buy’s goods. There was no other use for the Reward Zone points. Thus, the calls encouraged the listener to make future purchases at Best Buy. Neither the statute nor the regulations require an explicit mention of a good, product, or service where the implication is clear from the context. Any additional information provided in the calls does not inoculate them.

As for Best Buy’s claim that the plaintiff had consented to the calls when he signed up, the court wrote that “Any assertion that [the plaintiff] either consented to receiving these communications or that the communications were
not unsolicited is unpersuasive on this summary judgment record. [The plaintiff] repeatedly and expressly asked not to be contacted. The calls violated the TCPA and its implementing regulations.”

Best Buy Calls Urging Customers to Update Rewards Accounts Were Ads, Violated TCPA [BNA.com]