State consumer protection advocates are hailing a Utah Supreme Court ruling as a huge step toward protecting Utah residents from out-of-state telemarketers who fail to comply with Utah law.
In its ruling released Tuesday, the state's high court reversed a lower court ruling that deemed the Utah Division of Consumer Protection did not have the ability to go after a Florida-based telemarketing company for violating the Utah Telephone Fraud Prevention Act by placing a single unsolicited phone call
to a Utah resident using an automated telephone dialer, which was outlawed by the Utah Legislature. The law also required telemarketers doing business in Utah to register with the state.
After a citizen complained to the state, the division sought to fine Flagship Capital $1,000 for placing the unwanted call to offer what state officials called questionable consumer credit counseling. Flagship Capital contested the fine and took the matter to court, where it argued the federal Telephone Consumer Protection Act pre-empted Utah's law. A lower court ruled in Flagship's favor, finding the state lacked jurisdiction.
In their unanimous ruling, the Utah justices ruled the state's fraud prevention act did not conflict with the federal version of the law. Because there is no conflict, Utah has a right to enforce its law independent of federal action.
"This was a big win for consumer protection," said assistant attorney general Jeff Buckner.
In the past, he said, out-of-state companies have used federal pre-emption as a way to avoid being fined for violating Utah law.
Tuesday's ruling makes it clear that unregistered telemarketers, like Flagship, cannot hide behind federal law, Buckner said.
"This is a great day for the consumers of the state," said Francine Giani, director of the Utah Division of Consumer Protection.
Giani said a combination of state and federal laws have reduced what used to be a plague in numerous Utah households during dinnertime.
Before the National Do Not Call Registry was put in place, Giani said her division used to get thousands of complaints each year. That number has since dwindled to several hundred, many from out-of-state companies.
Buckner said the state has yet to decide how to proceed with action against Flagship, but he is hoping the company simply will pay the $1,000 fine and register with the state.
E-mail: gfattah@desnews.com