RightsCorp faces class action lawsuit claiming harassment and unfair practices

RightsCorp, an LA-based company offering intellectual property protection services to the music industry, has been served with a class action lawsuit, Ars Technica reports.

In the lawsuit the company is accused of making harassing calls to claimants, who were accused by a pre-recorded and/or artificial voice of copyright infringement, essentially asking them for a one-off payment that would settle said infringement.

The suit goes on to say that RightsCorp, in order to reach settlements with the people it was accusing, has engaged in telephone abuse, made various false and leading representations, engaged in unfair collection practices, failed to provide valid and required notices relating to debts and furnished emails and letters knowing they would create false beliefs on the parts of consumers that their ISPs were involved in the collection of the money.

These are certainly not acceptable tactics and, if the allegations can be proved, RightsCorp could be liable to pay substantial damages.

It doesn’t even look like threatening people into giving you money is a good tactic, since the company is already struggling. It has registered over six million dollars in losses since 2011 and the stock price has taken a massive hit debuting at $1.40 in 2013 and gradually collapsing to less than ten cents ($0.095) today. Hopefully a lesson learned for companies that want to build a business by bullying people into paying penalties without providing any proof of infringement.

The company is classed as a “debt collector” in these matters because it has no authority to actually sue the people it harasses, only the copyright holders that are instructing it can. In addition the company implied threats in its communications, firstly stating that the user’s internet access would be terminated and secondly that a legal action would be taken, which violates debt collection laws.

Morgan Pietz, the lawyer who filed the suit, has only presented two plaintiffs but it’s likely that that number will grow to many hundreds, if not thousands of people, once word of the class action spreads. He also stated that there could be the potential to hold RightsCorp’s clients responsible for the damages should the company itself fold - clients include BMG Rights Management, Warner Brothers and Shapiro Bernstein.

(Andrea Leonelli)