Bradley Alan Smith wasn't returning calls this week after his California home improvement company gained notoriety as the first company in the nation charged with violating federal Do Not Call Registry rules.

Smith is president and CEO of Hayward, CA-based American Home Craft, Inc., a home improvement certified operation with an otherwise clean record.

California Attorney General Bill Lockyer late last week filed a civil complaint against the company and charged it with allegedly placing phone calls to households that had registered their phone numbers with the federal Do Not Call Registry.

The suit was filed in the U.S. District Court for Northern California in San Francisco and seeks at least $100,000 in fines and a permanent injunction requiring the company to abide by the law.

After households and others register their phone numbers with the registry they are soon supposed to be rid of most unwanted telemarketing calls for five years. At the end of that period, phone number owners have to re-up with the registry. Telemarketers who violate the law can be fined up to $11,000 for each illegal call.

Federal and state agencies publicly insisted they were going to swiftly and decisively enforce the law after court challenges failed to delay or disrupt the registry which now has some 55 million phone numbers and 63,000 complaints.

"This lawsuit should put all telemarketers on notice to get a copy of the Do Not Call registry and take the law seriously," Lockyer said.

The complaint alleges American Home Craft never attempted to purchase the Do Not Call registry available to telemarketers since September 1. Businesses get 30 days to remove phone numbers from their telemarketing lists.

"Millions of Californians registered their phone numbers on the national list to reclaim their privacy and family lives from telemarketers. If you're on the Federal Trade Commission's registry and still getting calls, report it so we can continue to aggressively enforce the law to protect Californians," he added.

The complaint also alleges dozens of complaints were filed by Californians in 12 area codes near the company's offices.

American Home Craft is licensed as a general contractor offering window, painting, roofing, decorating and other home improvement services from offices in Irvine, San Diego and Sacramento, as well as Hayward.

In addition to the do-not-call complaint, the state alleged the company violated California's unfair-competition rules, which subject the company to a potential fine of $2,500 per violation.

California filed the do-not-call charges under the federal Telephone Consumer Protection Act (TCPA) which allows the court to award up to $500 for each violation, and up to $1,500 per violation for each violation ruled as done with intent. California's unfair competition statute provides for civil penalties of up to $2,500 per violation. The actual amount of penalties obtained against American Home Craft will depend on the number of violations proven at trial, but the Attorney General's complaint asks the court for at least $100,000.

The state filed suit under the TCPA, rather than the FTC's Telemarketing Sales Rule (TSR) which also enforces the national no-call list and calls for stiffer penalties -- up to $11,000 for each illegal call -- because the telemarketing calls occurred entirely within California, Jordan said.

The TSR applies only to calls that cross state lines. The TCPA has broader jurisdiction. California's own do-not-call law is slated to take effect Jan. 1 and will provide for penalties as stiff as those available under TSR.

The feds have yet to attempt enforcement under the new national law, but the FTC said it could be prepared to file an enforcement action as soon as December. The Federal Communications Commission recently filed a complaint against long-distance provider AT&T under its older, company-specific do-not-call rules.

The charges against American Home Craft have nothing to do with the company's quality of work or with its apparent ability to get the job done. With an otherwise unblemished state license and performance record, American Home Craft is listed as a League Of California Homeowners Approved contractor.

"They've been in the program for a couple of years and we've never received a complaint from anyone. When I check out these companies I check them out on public records and other checks that go beyond the license check," said Ken Willis, president of the non-profit League.

The Upland, CA consumer group assists its members -- homeowners -- in 20 states with home improvement, ownership and buying issues. It also offers, among other services, a referral service to approved contractors and other approved real estate related services.

To get League approval contractors must be licensed and in good standing with California's licensing agency, the California Contractors State License Board; they must be properly insured with liability and workers compensation insurance; they must have clean court records, good credit reports and solid customer and business references as evidence of sound work.

"The only thing that would affect their standing with us is quality of workmanship issues or issues where a job is partially finished or they fail to finish work in a timely manner," Willis said.

"Where they would get into trouble with us are issues that would affect their license or ability to get insurance or if it's a criminal matter like fraud, well, then they are gone," Willis added.

Since do-not-call rules have taken effect most contractors have followed the letter of the law. Unfortunately, that hasn't been good for contractors' bottom line.

"A number of contractors who have used telemarketing have really pulled their horns in. Business is showing it. They are not seeing as much sales traffic and are trying to find other means, newspaper advertising and stuff like that," Willis said.

Mozelle Thompson, an FTC commissioner speaking on a panel at the recent National Association of Real Estate Conference and Expo last week in San Francisco, said it is unfortunate the law could initially mean lost business, but with nearly 55 million phone numbers registered nationwide not to receive telemarketing calls, consumers have made clear their dislike for unsolicited telemarketing.

Tomorrow: Do Not Call rules may not apply to real estate professionals with prospective buyers for FSBOs.

Published: November 12, 2003

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.