FCC Proposes Record Penalty in Junk-Fax Case
The Federal Communications Commission on Wednesday proposed a record $5.38-million fine against a California company that allegedly inundated businesses and consumers with millions of pages of unsolicited faxes.
The action against Fax.com Inc. of Aliso Viejo was meant to send a message to those who violate the federal Telephone Consumer Protection Act and burden junk-fax recipients with the cost of paper, ink and other items associated with receiving unsolicited faxes.
The FCC also issued citations to more than 100 businesses that used Fax.com services, saying they could be liable for financial penalties if they continue to send unsolicited faxes.
“We have proposed the maximum statutory fine [because] this is a company that appears to be in the business of violating the law and hurting consumers for profit,” said David Solomon, chief of the FCC’s bureau of enforcement. “What they did was blatantly unlawful.... I can assure consumers that we will take additional actions, if necessary,” to stop this practice.
The FCC found that Fax.com apparently violated federal law and agency rules on 489 occasions. It imposed the maximum fine of $11,000 for each violation. The company has 30 days to appeal to the FCC’s commissioners.
Fax.com executives could not be reached for comment. Mary Ann Wymore, a St. Louis attorney who represents the company, said Fax.com believes its faxing activity is constitutionally protected free speech. She added that the company intends to pursue its rights to the Supreme Court.
“We are disappointed in the FCC’s action,” Wymore said. “We are going to pursue this to the Supreme Court, and we have every expectation that” we will be upheld.
Although marketing by facsimile has lost some of its allure amid the emergence of e-mail and the Internet, modern technology has enabled Fax.com and its rivals to broadcast, for a fee on behalf of others, millions of faxes a day at dramatically lower costs than was possible a decade ago. Fax.com says it maintains the “the industry’s largest fax number database.”
According to the FCC and industry sources, Fax.com compiled its formidable database by using computers to randomly dial millions of phone numbers and “listen” for a telltale fax tone. When the machines hear a tone, it adds the number to its database as a potential junk-fax recipient.
Fax.com also uses computers to send millions of faxes electronically to other fax machines across the country with little or no cost or human assistance.
But the faxes can be financially burdensome, tying up recipients’ machines for hours and even endangering lives.
Physician Robert McMeekin complained to the FCC that he received unsolicited advertisements from Fax.com on a line that is reserved for patient medical data and said he worried that “serious disruption to patient care” could be caused by such unwanted faxes.
Washington law firm Covington & Burling sued Fax.com for $2.45 million in damages last year after receiving 1,634 unsolicited advertisements during the week of June 4, 2001. “What happened to us was very damaging ... and that’s what prompted us to take legal action,” said Jason Levine, an attorney at Covington & Burling. “This was a huge problem for the firm to have our fax lines” tied up.
The FCC said in a 1995 federal court case that junk faxes are burdensome because they cost recipients 3 to 40 cents a page. Wymore said the agency’s estimates are inflated and based on older fax technology that used more costly thermal fax paper.
Today, she said, unsolicited faxes cost only 2 to 4 cents a page and are not financially burdensome. She added that Fax.com has a toll-free number consumers can call to be excluded from receiving unsolicited faxes.
However, the FCC said several consumers complained that they were unable to be removed from Fax.com’s database. The agency said information on Fax.com’s “Web site creates [an] erroneous impression” about the steps consumers needed to take to opt out.
Consumer advocates applauded the FCC’s crackdown, saying it was long overdue in an industry plagued by unscrupulous operators.
“This is a big problem because sending a junk fax is cheaper than sending something by mail,” said Steve Kirsh, who operates the anti-junk-fax Web site www.junkfax .org.
Faxes, he added, are “more likely to be read than e-mail.” As a result, there has been growing marketing demand for fax services offered by companies such as Fax.com.
“I personally get 100 junk faxes a month at home and [another] 100 faxes a month at work,” Kirsh said. “It’s a big problem.”
