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Illegal faxing earns firm fine of $5.4-million

The FCC calls the record penalty on Fax.com Inc. a signal to junk faxers who break a 1992 law.

By Associated Press
Published January 6, 2004
[Last modified January 6, 2004, 01:33:37]

WASHINGTON - Federal regulators approved a record $5.4-million fine against a company for faxing unsolicited advertisements to consumers.

The Federal Communications Commission said the fine given to Fax.com Inc. was the largest for violating do-not-fax rules that went into effect in 1992. The company sends faxes on behalf of clients that pay a fee.

The FCC said Fax.com violated the rules 489 separate times, incurring an $11,000 fine for each instance. The five-member commission unanimously approved the penalty Wednesday but did not announce its decision until Monday.

"Consumers hate to go to their fax machine only to find their resources have been wasted on spam and junk," FCC chairman Michael Powell said. "We're sending relief in the form of a simple message to junk faxers: Violate our rules and you will pay the consequences."

Company officials did not immediately respond to a request for comment.

The commission said it rejected arguments from Fax.com that the ban on unsolicited faxes was unconstitutional and that the fine was excessive.

Fax.com's Web site, www.fax.com says the company offers "the industry's largest fax number database" of more than 30-million numbers. The company says its clients can "send a high volume of fax information to hundreds, thousands or even millions of recipients."

The FCC also ordered the company to report within 30 days whether it has started to follow the rules. Depending on the company's response and consumer complaints, additional penalties could be imposed against Fax.com or the firms that have hired the company to send the faxes, the FCC said.

"Fax.com's primary business activity itself constitutes a massive ongoing violation" of the do-not-fax rules, the commission said.

The FCC primarily tracks violations of the rules through complaints from people receiving unwanted faxes. A company must have written permission from a person before sending an advertising fax, though the requirement does not apply if the sender has done business with the recipient. A rule requiring all organizations sending faxes to get written permission from all parties, even those with which they have a business relationship, has been delayed until 2005.

Congress first authorized the FCC to enact do-not-fax rules in 1991 when it passed the Telephone Consumer Protection Act. That law also gave the FCC the power to issue rules to curb telemarketing calls. The FCC and Federal Trade Commission eventually set up a do-not-call registry that took effect Oct. 1.

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