Business & Professions Code § 17511.9 – Telemarketing Fraud in California

Business and Professions Code § 17511.9 prohibits “telemarketing fraud,” which is the use of a deceitful or fraudulent business scheme to sell a good or service by way of the telephone. This section can be charged as a misdemeanor or a felony and carries a potential jail sentence of up to 3 years.

Examples

• Nicholas calls thousands of people a day and informs them that their computers have been infected with a virus, but for $50, he can correct the problem with special software (although he has no software).
• Kim, as an employee of a company, makes cold calls and tries to sell insurance to callers by saying, misleadingly, that their car insurance is about to expire.
• Justin calls potential “customers” and tells them he can enroll them in an overseas lottery opportunity every week for a small fee, but he has no intent to enroll them.

Defenses

Luckily, there are several legal defenses that you can raise if accused of a crime under Business and Professions Code 17511.9. These include showing that you:

• were not a salesperson;
• did not commit a fraudulent act; and/or,
• were arrested after an unlawful search or seizure.

Penalties

A violation of BPC 17511.9 is a wobbler offense under California law. This means it can be charged as either a misdemeanor or a felony.

If charged as a misdemeanor, the crime is punishable by:

• imprisonment in the county jail for up to one year; and/or,
• a fine of $10,000 for each unlawful transaction.

If charged as a felony, the offense is punishable by:

• imprisonment in the county jail for up to three years; and/or,
• a fine of $10,000 for each unlawful transaction.

Our California criminal defense attorneys will explain the following in this article:

• 1. What is telemarketing fraud?
• 2. Are there legal defenses to BPC 17511.9 charges?
  • 2.1. Not a salesperson
  • 2.2. No fraudulent act or plan
  • 2.3. Unlawful search or seizure
• 3. What are the penalties, punishment, and sentencing?
• 4. Related offenses
  • 4.1. False advertising – BPC 17500
  • 4.2. Annoying phone calls – PC 653(m)
  • 4.3. Public nuisance – PC 372 and 373(a)
  • 4.4. Spam & Unsolicited Emails – BPC 17529.5

1. What is telemarketing fraud?

California Business and Professions Code 17511.9 BPC is the California statute that makes it a crime to engage in telemarketing fraud.

A prosecutor must prove three elements in order to show that you are guilty of “telemarketing fraud.” These are:

1. you were a salesperson, agent or representative of a seller, or an independent contractor;
2. and you used a device or scheme, over the telephone, in connection with an offer to sell something;
3. or you willfully, directly or indirectly engaged in an act or business practice, over the telephone, that operated as a fraud or deceit in connection with an offer to sell something.¹

A “fraud” occurs when:

• you commit an act that results in an unfair or undeserved benefit for yourself, and
• the act causes harm or loss to another person.

2. Are there legal defenses to BPC 17511.9 charges?

If you are accused under Business and Professions Code 17511.9, you can challenge the accusation by raising a legal defense. A good defense can often get a charge reduced or even dismissed. Please note, though, that it is critical to hire an experienced criminal defense attorney to get the most effective defense.

Three common defenses to BPC 17511.9 accusations are:

1. not a salesperson;
2. no fraudulent act or plan; and/or,
3. unlawful search or seizure.

2.1. Not a salesperson

The first element a prosecutor must prove under BPC 17511.9 is that you acted as a salesperson, or as an agent of a seller. Therefore, a solid legal defense is to show that, while you may have made telephone calls to people, you were not trying to sell anything. Perhaps, for example, you were merely making calls to perform market research.

2.2. No fraudulent act or plan

You have to engage in some type of deceitful or fraudulent scheme to be guilty under this code section. This means that it is a completely valid defense to show that, even though you made telephone calls to sell a product, you did not commit a fraudulent act.

2.3. Unlawful search or seizure

The Fourth Amendment to the U.S. Constitution declares that we have the right to be free from unreasonable “searches and seizures” by law enforcement. If authorities obtain evidence from an unreasonable, or unlawful search and seizure, then that evidence can get excluded from a criminal case. This means that any charges in the case could get reduced or even dismissed.

The Fourth Amendment’s rule against unreasonable search and seizures means that police may not search you or your property unless one of the following is true:

1. they have obtained a valid search warrant from a judge, or
2. the search falls within one of a number of exceptions to the warrant requirement recognized by federal and California courts.²

3. What are the penalties, punishment, and sentencing?

A violation of Business and Professions Code 17511.9 is a wobbler offense under California law. This means it can be charged as either a misdemeanor or a felony depending on:

• the facts of the case; and/or,
• your criminal history.

If charged as a misdemeanor, the crime is punishable by:

• imprisonment in the county jail for up to one year; and/or,
• a fine of $10,000 for each unlawful transaction.³

In lieu of imprisonment, a judge has the discretion to impose misdemeanor probation, or “summary” or “informal” probation.

If charged as a felony, the offense is punishable by:

• imprisonment in the county jail for up to three years; and/or,
• a fine of $10,000 for each unlawful transaction.⁴

In lieu of imprisonment, a judge has the discretion to impose felony, or formal, probation.

4. Related offenses

There are four crimes related to telemarketing fraud. These are:

1. false advertising – BPC 17500;
2. annoying phone calls – PC 653(m); and,
3. public nuisance – PC 372 and 373(a); and,
4. spam/unsolicited emails – BPC 17529.5.

4.1. False advertising – BPC 17500

Business and Professions Code 17500 BPC is the California statute that makes false advertising a crime.

A prosecutor must prove two things to show that you are guilty of “false advertising.” These are:

1. you made a false or misleading statement in connection with a service, product or the sale of a service/product/property; and,
2. you knew, or should have known, that the statement was false or misleading.⁵

A statement is considered false or misleading if members of the public are likely to be deceived.⁶ The determination of whether or not a public member is deceived is based upon the facts of a given case.⁷

Violating California Business and Professions Code 17500 is a misdemeanor.⁸ The offense is punishable by:

• Imprisonment in the county jail for up to six months; and/or,
• A fine not to exceed $2,500.⁹

You may also face a civil lawsuit and/or an injunction.

4.2. Annoying phone calls – PC 653(m)

Per California Penal Code 653(m), you commit a crime in California if you make an annoying phone call.

Under PC 653(m), an “annoying phone call” is one that is:

1. obscene, threatening or one of a series of repeated calls, and
2. made with the intent to harass or annoy the person being called.¹⁰

This code section also applies to annoying:

• emails,
• text messages, and
• letters sent by fax.¹¹

A violation of PC 653(m) is charged as a misdemeanor. The offense is punishable by:

• imprisonment in the county jail for up to six months; and/or,
• a maximum fine of $1,000.¹²

4.3. Public nuisance – PC 372 and 373(a)

A public nuisance is a crime under California Penal Code 372 and 373(a).

In particular, it is a crime under PC 372 and 373(a) to do any of the following:

1. maintain or commit a “public nuisance;”
2. willfully fail to perform any legal duty to remove a public nuisance;¹³ or
3. maintain, permit or allow a public nuisance to exist on property that you own or control.¹⁴

The legal definition of a “public nuisance” in California is anything that:

1. is injurious to health, indecent, offensive to the senses or an obstruction to the free use of property; and
2. interferes with the comfortable enjoyment of life or property by an entire community or neighborhood, or by any considerable number of persons.¹⁵

A violation of PC 372 and 373(a) is charged as a misdemeanor. The offense is punishable by:

• imprisonment in the county jail for up to six months; and/or,
• a fine of up to $1,200.¹⁶

4.4. Spam & Unsolicited Emails – BPC 17529.5

Business and Professions Code 17529.5 BPC is the California statute that makes it a crime to send certain unsolicited emails.¹⁷

In order to successfully convict you under this statute, a prosecutor must prove the following elements:

• you advertised in a commercial e-mail ad,
• the ad was sent from California or to a California e-mail address,
• the e-mail contained a third party’s domain name without the permission of that party,
• or, the e-mail contained false or forged header information,
• or, the email had a misleading subject line.¹⁸

A violation of BPC 17529.5 is charged as a misdemeanor and is punishable by:

• imprisonment in the county jail for up to six months, and/or
• a maximum fine of $1,000.¹⁹

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