Phone on Hold Marketing Systems founder Pete Turpel has spent more than a year trying to prove that an FTC lawsuit against him was a case of mistaken identity. (Stephen Nellis photo)

For the past 14 months, Pete Turpel has lived a business owner’s worst nightmare.

He carefully built up Phone on Hold Marketing Systems, which provides pre-recorded messages for firms to play while customers are on hold, over nearly three decades. And then last year, the Federal Trade Commission filed a lawsuit alleging that Turpel had violated telecommunications laws by sending robo-calls to numbers on the national Do Not Call registry and masking its identity on caller IDs.

Turpel was shocked. It was a case of mistaken corporate identity. They had the wrong guy. But after the FTC made its announcement, the phone calls — and even death threats — poured in from enraged consumers targeted by the robo-calls. And then came the full weight of the U.S. Department of Justice.

“You feel like you’re on a six foot surfboard looking at a 100-foot wave. You’re going, ‘Oh no….’ ” Turpel told the Business Times.

After lengthy depositions and turning over volumes of email and financial documents, Turpel persuaded the Department of Justice that he was indeed the wrong guy. On Jan. 31, the federal government’s lawyers recommended that Turpel and his company be dismissed with prejudice. While the decision still needs the formal approval of the Federal Trade Commission, Turpel’s ordeal is likely over for good.

Here’s his story.

Upstanding citizen

Turpel, a former radio announcer, started Phone on Hold in 1984 to tap his expertise in voice-overs and provide the on-hold messages for businesses. Over time the firm accumulated a number of honors: It was the Greater Conejo Valley Chamber of Commerce’s 2001 “Business of the Year,” a regulator contributor to the Ventura County Sheriff Foundation, and accredited by the Better Business Bureau. Turpel himself was a proud Rotarian, active in local business circles and even served on the city of Thousand Oaks’ planning commission.

Then he began getting complaint letters from various state attorneys general in Missouri, Indiana, Florida and Mississippi, among others. They alleged that he was engaging in so-called robo-calls, the automated calls that play a pre-recorded message when the phone is picked up.

It struck Turpel as strange. A handful of times, he had tapped the services of his brother, Joe, and his brother’s business for such calls, but they were always in business-to-business situations, where the federal calling rules are much less restrictive.

“We have initiated robo-calls before, but never to consumers’ homes,” Turpel said. “In all my years in business, we’ve done it maybe five times.”

Each time he received a letter, he wrote back to say he wasn’t the right person. In retrospect, Turpel said, he should have contacted his lawyers immediately.

“I said, ‘Let us help you.’ But nobody really did due diligence until they filed the lawsuit,” he said.

Name games

Meanwhile, Turpel had founded a business called Sonkei Communications. The word means “character” or “integrity” in Japanese, and Turpel started it to try to take advantage of the Japanese-language market. While Phone on

Hold did work in Spanish and other languages, it had no Japanese offering. “I was down in LA and I saw the Yellow Pages for Little Tokyo, and I thought no one was tapping this market,” he said.

In an unrelated development, it turned out that the name Phone on Hold had become ubiquitous in Turpel’s industry, so much so that it looked unlikely that Turpel could successfully hold onto it as a trademark. So Turpel began a transition to the Sonkei name for marketing many of Phone on Hold’s services, though Sonkei and Phone on Hold legally remain separate companies.

Around this time, Turpel’s brother had taken out a fictitious business name to operate as Sonkie One. The name was very close to Turpel’s business, basically one letter’s difference, plus the “One.” And of course the last names of the owners were the same. “That’s where some connection was made,” Turpel said. “They should have just asked.”

But instead, the regulators filed a lawsuit. Turpel tapped Mark Sullivan of Westlake Village law firm Sullivan Taketa, who was formerly in charge of all California litigation at GTE Corp. They opened the floodgates of information to federal lawyers to prove that it wasn’t Turpel.

“I gave them everything they wanted. We gave them every single email between myself and my brother. I opened up the company books. I didn’t have to, but I showed them everything. There was no cash flow to follow this,” Turpel said.

Meanwhile, consumers were doing their own research and finding Phone on Hold’s local phone number. The Business Times reviewed several of the messages left by angry consumers. They were unsuitable for quotation in a family newspaper.

“I had death threats,” Turpel said. “That’s when I called the cops.”

At a planning commission meeting in Thousand Oaks, one speaker during the public comment period demanded that Turpel resign because of the legal allegations against him. He also had to persuade the Better Business Bureau not to reject Phone on Hold’s accreditation because of Sonkei.

“It did not affect my business from a monetary perspective, but it affected my life here,” Turpel said. “Some of the things our employees experienced were awful.”

Resolution

Documents filed in the court case say that federal attorneys and Turpel’s brother, Joe, and his firm, Sonkie One, “have reached agreement on the broad form of a consent decree that will include injunctive provisions and may include a civil penalty.” Joe Turpel’s attorney declined to comment, and Joe Turpel could not be reached for comment.

Pete Turpel said the case has put some strain on his relationship with his brother and that he’s been advised not to discuss it with him.

Now that the case is over for Turpel and Sonkei, he is hoping to get back to work. Before the case, he was in talks with an East Coast competitor about a cash-and-stock deal to team up, a delicate negotiation for any business owner. “I’ve got to make up for what was lost,” he said.

Turpel considers himself lucky. He had excellent attorneys and the resources to fight the law and win. But the whole process has left him concerned about what would happen to a business owner who isn’t in such a fortunate position.

“They’re up the creek without a paddle, and it just doesn’t seem fair,” he said. “I wonder what happens to business owners who can’t afford to hire attorneys and fight the thing properly.”

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[CORRECTION: A previous version of this article contained inaccurate information about the legal action against Turpel and his company. They were dismissed with prejudice, meaning the Department of Justice cannot approach them again.]