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 user 2005-05-06 at 10:31:00 am Views: 87
  • #9253

    Junk faxers under siege
    They’re pushing for a more lenient law


    When Gary Nappe is awakened at 4 a.m. by the ring, bleep and buzz of incoming
    faxes advertising $199 Cancun vacations or two-for-one pizzas, he doesn’t get
    mad. He gets even.

    Junk faxes have been illegal since Dec. 20, 1992, the day the Telephone
    Consumer Protection Act (TCPA) was enacted. But plug a fax machine into any
    phone line these dozen years later, and it’s only a matter of time before the
    offers roll in. “Insurance, mortgage refinance, car dealerships, rent a car,
    restaurants — and it’s all junk,” Nappe said.

    Nappe, who runs a Web consulting business from his Pompano Beach, Fla., home,
    turns his junk faxes over to Fax Recovery Systems Inc., a Fort Lauderdale
    company that sues the senders under the TCPA and shares the spoils if it wins.

    So far, Nappe has collected $200. That doesn’t begin to cover the lost sleep
    or wasted paper, toner and fax time, he said, but it is “a kind of sweet

    The TCPA allows junk fax recipients to sue the advertiser responsible for the
    message (and, if different, the fax service that sent it) for damages of $500
    per fax. Damages may be tripled when the statute has been violated “willfully or

    But few people know about the law, said Joel Jones, a partner in Fax Recovery

    Even those aware they can sue rarely do, said Francis Salazar, director of
    litigation for Consumer Crusade Inc., a Denver firm that also sues junk faxers
    on behalf of others. “The process is incredibly involved, so few people bother,”
    he said.

    Enter companies like Jones’ and Salazar’s. Junk fax recipients “assign” their
    claims to these firms, and when there are enough to make pursuing the claims
    worthwhile, the consolidator hires a lawyer and sues. A successful outcome — a
    judgment or settlement — nets the assignor a cut. Consumer Crusade pays $25 per
    fax. Fax Recovery pays $100.

    But the growing popularity of TCPA lawsuits, coupled with consternation over
    a change in Federal Communication Commission rules, has businesses pressing for
    legislation that critics charge will “open the floodgates” on junk faxing.

    The biggest junk faxers, called “fax blasters,” can spew out hundreds of
    thousands of unsolicited advertisements a day. In one recently litigated case,
    the defendant was estimated to have sent 2.5 million junk faxes per month, each
    costing the recipient 7 cents. Blasters typically charge $1,000 per 10,000
    faxes, and some even assure doubtful clients that what they do is legal.

    The FCC at one time interpreted a verbal go-ahead or an “existing business
    relationship” as sufficient permission to fax unsolicited advertisements. In
    2003, troubled by the rising number of junk fax claims, it ruled that commercial
    faxes require prior written permission from the recipient.

    That rule was to take effect in January. The effective date has been
    postponed to July 1 as a coalition of businesses and associations lobbies
    Congress to enshrine the business-relationship exemption in law.

    Under the Junk Fax Prevention Act, junk faxes would remain illegal. But where
    there is a legitimate business relationship, it becomes the fax recipient’s
    responsibility to decline the faxes. Businesses would have to keep and honor
    opt-out lists, much as telemarketers were supposed to in the days before the
    national do-not-call list.

    The legislation received a favorable recommendation from the Senate Committee
    on Commerce, Science and Transportation on April 14. With bipartisan support and
    backing from the business community, its chances of passage appear good. Last
    year, the House and Senate each passed similar bills, but could not agree on a
    single version.

    Critics contend the Junk Fax Prevention Act will supply illegal faxers with a
    ready-made defense against TCPA lawsuits, effectively gutting the antijunk-fax
    provisions of the law.

    “Only in Washington can they name a law the exact opposite of its intent,”
    said Steve Kirsch, a Silicon Valley entrepreneur who runs Junkfax.org, a Web
    site spearheading opposition to the measure. “If this bill becomes law, it will
    essentially turn your fax machine into a printing press for junk faxers.”

    Perhaps worse, Kirsch said, are the doors it throws open to legitimate
    advertisers: “Any business you’ve ever had any contact with at all will be able
    to fax you, legally.”

    Despite the widespread use of e-mail, the fax machine is a staple of business
    communication, said Jade West, senior vice president for government relations at
    the National Association of Wholesaler-Distributors in Washington, D.C., and
    director of a group called, in another twist of Washington logic, the “Fax Ban

    Pharmacies, doctors and hospitals fax prescriptions and medical records.
    Unlike e-mail, documents transmitted by fax are legally binding, making them
    indispensable to many professionals, including attorneys and real estate agents.
    Keeping track of signed permissions would pose an expensive logistical problem,
    West said.

    “If I send out a fax notice to my trade association members about a
    conference that charges a $3 fee, that is by definition an unsolicited fax and I
    must have written permission from each and every member I fax it to,” she said.

    Junk fax foes agree that the FCC went too far in requiring written
    permission, but say industry is going too far to correct it. Kirsch has
    suggested amending the TCPA to make verbal permission sufficient.

    West rejects this idea, in part because business owners fear opening
    themselves to TCPA lawsuits. “What if one person in an office gives permission
    but another turns our fax over (to a consolidator)?” she asked.

    Trish Dill, owner of a Denver-area employment firm, contends that’s just what
    happened to her. She’s being sued by Consumer Crusade for more than 50 allegedly
    unsolicited faxes.

    In an interview, Dill said she sent the faxes from her own office, not a fax
    blaster. She described the recipients as longtime clients. If Consumer Crusade’s
    $75,000 suit is successful, she said, it could be the end of her business, “all
    over a few faxes.”

    Dill calls Consumer Crusade and similar companies little more than litigation
    mills that prey on small-business owners’ ignorance and fear.

    “They’re just out to make money,” she said. “They hit you with a demand
    letter for $500 per fax and most people just pay because they’re scared to
    death, but I’m fighting.”

    Consumer Crusade’s Salazar, however, said all 50 of Dill’s accusers insist
    they’ve had no prior dealings with her. He added that the faxes collected by his
    company generally represent less than 1 percent of any faxer’s output.

    Both Fax Recovery Systems and Consumer Crusade say that after fees for
    lawyers, investigators and other expenses, they usually collect less money than
    their clients. Salazar said Consumer Crusade runs in the red.

    Even so, Jones, of Fax Recovery Systems, admits that the little guys,
    especially those who fax from their own machines, are easier to track down and
    hence to sue.

    Salazar agreed. “The big guys are hard to get because they hide behind layers
    of false identity, and when you do get to them, they have lots of money to spend
    on lawyers because junk faxing pays,” he said.

    And, said Jones, whether a junk fax comes from the local carwash or a
    multinational company, it costs the recipient the same in money and grief.

    Nappe, for his part, has little sympathy for small-business owners who plead
    ignorance or hardship when confronted with their junk fax misdeeds.

    “I’m a small-business person, too,” he said. “I don’t ask them to send faxes
    that I don’t want, late at night and at my expense, and I don’t send any to