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Blizzard of faxed ads costs O'Fallon, Ill., dealer $6.5 million in fines

November 24, 2010

An Illinois new-car dealership agreed July 10 to pay up to $6.5 million to settle claims against it in a class action suit over advertisements the dealership faxed to more than 33,000 local phone numbers in early 2001.

While junk e-mail is pervasive, junk faxes are illegal under federal law. If a judge approves the settlement after a September hearing, individual consumers can claim as much as $500 for each advertisement they received, the standard penalty under the federal Telephone Consumer Protection Act.

Newbold Toyota-BMW of O'Fallon, Ill., a St. Louis suburb, faxed advertising to more than 33,000 businesses and people in the 314 and 636 area codes over a four-week period. Notice of the settlement was sent- by fax, of course-to the telephone numbers turned over by the company that did the faxing for the dealership. Not everyone is likely to file a claim. Attorney Steven Katz, who filed the class action suit, said the $6.5 million amount represents the cap on the dealer's insurance coverage.

Reporters for the St. Louis Post-Dispatch could not reach representatives of Newbold Toyota-BMW for comment. Katz said the dealership's owners did not know the practice was illegal when they hired their advertising company. Under the proposed settlement, the dealership admits no wrongdoing.