Joe Delfgauw testifies to the role statistic play in verifying opt ins

This is another article in my series on how telemarketing works.

In the McCrae-Coley litigation with case number 3:21-cv-05610, Joe Delfgauw testified that they verified individual opt ins were real or fraudulent based on the statistics of the opt out rate:

Q: What does? . . . what process, if any, do you go through to see if it was legitimately entered into and opted into?

A: We go by the statistics of the opt-out rate because most people that don’t want to receive texts just reply “Stop”.

In a later deposition Mr. Delfgauw was asked to explain exactly how that works. Hilarity ensued. This is taken from deposition testimony between Mr. Delfgauw and my law clerk Nathen Barton.

Q. How do you go by the statistics of the opt-out rate to determine if an opt-in is real or fake?

A. If somebody opts out on the first text message, we think that it's a fake phone number [Nothing gets past Joe Delfgauw] since it's a lead, because what happens is, is they didn't really -- someone opted in for them, they got a text, they didn't want them, they opted out.

Q. And so your use of statistics is just based on when they opt out?

A. Yeah, I mean, there's many statistics, but if you ask a specific question, I'll answer it. Like, there's many -- like, for example, what is -- what is our opt-out rate for a short code? If it's under 2 percent, we know that most of the people opted in, because a lot of times when it's -- when it's 2 percent, it's 98 percent. That means that most of the people or all the people opted in. Only 2 percent that opted out probably didn't need the service or changed their mind.

⋮

Q. Well, I'm just asking about the statistics. How do you go by the statistics of the opt-out rate to validate a specific phone number?

⋮

A. . . . if we had 100 leads on Monday and 100 people pressed "stop" in five minutes, we would think that's fake traffic. [Nothing gets past Joe Delfgauw] If we have 100 leads on Monday and one person opts out, the statistics would be that it's more than likely that all the traffic is legitimate. That's how we stop affiliates from fake and fraud traffic. Statistics help. That's what that means. It's the percentage rate. The percentage rate, if, 100 percent of people from one specific source press "stop" in five minutes, pretty big tell. [Joe Delfgauw will go on to testify that this is more or less what it takes to convince him the traffic is fake]

Q. So if you get a million opt-ins and two percent them opt out relatively quickly, you figure the other 98 percent are guaranteed, wanted the calls?

A. Not saying guaranteed. But, no, it is -- it is -- statically, 100 percent of the people that opt in, 100 percent of them want it. [Nothing gets past Joe Delfgauw] If 2 percent change their minds because either way they didn't read the terms of service; B, it could have been fake information put in from someone else, that has happened; [This is one of the times Joe fell off his script and admitted to the fake traffic] C, they changed their mind, they didn't know what it was, they thought it was a rental site and it was a Rent-to-Own site, thought it was an apartment site. There could be many reasons why they opt out right away, but statistically, if over 98 percent [Joe will later admit he has no idea what percentage means anything]-- and the carriers have this rule too, by the way. This is a carrier rule. If you're over 2 percent, you may or will get audited.

Q. So how do you use the statistics of the opt-out rate to validate the 1019 supposed opt-in?

A. You never replied "stop."

Q. But how did you use the statistics of the opt-out rate?

A. It's -- it's 100 percent certain you didn't opt out. It's 100 percent.

Q. Yeah, but how does that say that the person opted in?

A. If you're trying to trick me, I don't know really what you're asking. It doesn't. That in and of itself doesn't, but if you don't reply "stop," it usually means you wanted it. [isn't this the same reasoning as a rapist?]

Q. So usually? You're just going based on usually?

A. Statistics, yeah, statistics.

Q. Okay. And who made the decision to go by the statistics of the opt-out rate?

A. Me.

Q. Okay. And what is your educational background in statistics?

A. I had some statistics in college. But I also have real life statistics, meaning, like, I know if 100 percent of the people say yes to something, it's a pretty good statistic.

Q. What is your statistics background in college?

A. I had statistics at Wayne State University in 1990 in economics.

Q. One class?

A. One class, maybe. I might even be confusing that with economics. I'm not sure.

Q. Were you math major?

A. I'm the smartest math guy you know, buddy. And I actually was a math major. I actually took the test. I actually got to -- what is called? Math 180 at Wayne State. I skipped four math classes at my freshman orientation.

Q. So you took calculus in your university?

A. I don't know if I took calculus. I think I started with Algebra 2 because I wanted -- I was playing football and I wasn't really there for college.

Q. Okay. So if you were a math major, don't you think you would have taken calculus?

A. Maybe.

Q. You don't know?

A. Don't care.

Q. But don't care or don't know?

A. Don't care, don't know, both.

Q. All right.

A. Again, I was there for football, baseball.

Q. And did you hire anybody else to figure out how to go by the statistics of the opt-out rate?

A. I didn't have to hire anyone. The carriers tell us what the opt-out rates and statistics they are looking for is.

⋮

Q. Okay. So you get a thousand opt-ins and 2.5 percent of them opt out -- I think -- I think you'll have to be closer to the microphone.

A. Oh, sorry.

Q. What do you do with the rest of the thousand opt-ins?

A. I don't know what that means. We call them, text them, email them.

Q. So you don't throw them out?

A. No, why would we?

Q. Okay. Well, you said you went by the statistics of the opt-out rate and the opt-out rate was over 2 percent. I'm just asking what do you do with the rest of them?

A. You need to be a little bit specific. So did you say that those thousand leads came from the same source or did they come from 20 sources? There's a very, very, very big difference. We would check, just to answer your question I think you're asking. If we got 10,000 leads one day from 10 different people and one of them was over 2.5, we would definitely check their messaging, their ads, and talk to them first. Then we would wait a couple of days and see if their opt-out rate went lower. And we would call those people because just because they say "stop, we don't want text messages," when we call them, we find out why, because they haven't said, "stop" to the calls.

Q. You would call the remaining 97 percent of them?

A. Yes.

Q. You'd call all the 97 percent of them?

A. We'd try to.

Q. Who would you have do that work?

A. On our call centers.

Q. You would have your call centers call them to verify the opt-in?

A. No, we would just do business as usual and we'd check the stats on the back end. [You can't make this stuff up]

Q. I thought you said you would have the call center call the remaining 97 percent?

A. I did say that. We call -- we call the 100 percent.

Q. Oh, so you wouldn't call them and ask them, Hey, did you opt in? You just called with your regular solicitations?

A. Yeah, when they opt out, we ask, Did you just opt out? Did you enter the information correctly? And if they said, Yeah, then we'd say, Okay, we'll take you

Q. Okay. So you don't really go by the statistics of the opt-out rate because no matter how many people opt out, everybody else still gets calls?

A. We go by the statistics of the opt-out rate to gauge whether a specific source is doing something that they shouldn't do. It's not an automatic thing; it's individually evaluated on every single source. And when I say "source," Facebook, Snapchat, Google, wherever we run the ads or wherever the affiliate or media buyers (phonetic) run the ads. It's very specific.

Q. And even when you find an elevated rate from one source, you don't throw away their other opt-ins?

A. No, because we don't know. It could have been a bad -- it could have been a million different things. We evaluate it and we decide.

Q. So that's a no?

A. What's the question?

Q. What do you do with the other 97 percent when 3 --

A. We call them. There could be a million reasons for that 3 percent. We evaluate on the back end; it's business as usual on the front end.

Q. Well, Ms. McCrae-Coley asked you how do you verify a specific phone number. You said you go by the statistics of the opt-out rate. It sounds like no matter what the opt-out rate, you're going to telephone solicit everybody who doesn't opt out?

A. Okay. So that's not what Ms. McCrae-Coley said, if you'd like to read it again. What she said was -- is that what system do you use to verify that the person with the phone number is that person. That's not what she said, so please reread it.

Q. Well, we can do that. She said, "What process, if any, do you go through to see if it was legitimately entered and opted in to?" And you said --

A. It was --

Q. -- "We go by the statistics of the opt-out rate, because," and then you went on. You said, "because most people that don't want to receive texts just reply 'stop.'"

A. That's correct.

Q. So if you get 3 percent of people quickly replying "stop," you keep telephone soliciting the other 97 percent?

A. Of course. They didn't say "stop." Why would we not?

Q. Well, her question was, "What process do you go through to see if it was legitimately entered into," and it sounds like no matter what the statistics of the opt-out rate say, everybody else get phone calls.

A. Okay. That's true.

Q. So you don't really go by the statistics of the opt-out rate?

A. We do go by the statistics. You're trying to change something and get answer that you want. There's nothing there that I'm answering any different than I said on that thing. We go by the statistics. We can't verify that Tammy McCrae-Coley was the person that filled it out by name and email, but if she replied "stop," and there's 50 people out of a thousand that say "stop," that's a big red flag. The higher the percentage, the greater chance we're going to stop everything.

Q. Well, then let's -- let's go to the 1019 number.

A. Okay.

Q. Let's say there's 500 opt-ins before it, there's 500 opt-ins after it, all from the same source, and 50 people reply "stop." Do you telephone solicit the 1019 number or do you say probably none of those are legitimate, throw them all away?

A. No, what if they're (audio unclear). First of all, 5 percent would be high. Your example, you're talking 5 percent; that would definitely raise a red flag. However, in yours, you never replied "stop."

Q. So in your own example of a 5 percent opt-out rate with the 1019, you'd still telephone solicit the 1019 number?

A. It's possible. It really just depends on many other factors. And it's not -- it's not a blanket statement, it's not an absolute. If 20 percent or more opted out, we would absolutely stop everything. How's that?

Q. So it would take 20 percent?

A. Yes, it would have to be something so beyond egregious from one source that we would be -- it would be obvious because no -- in any history, 20 percent of the people don't opt out five minutes after they opt in. No way. [Joe Delfgauw testified that unless something so egregious forces him to admit the entire lot of opt ins are fake, he's going to assume that anyone who doesn't reply stop wanted the calls. And he is going to testify that something that egregious has never happened.]

Q. Okay. And it would take something that never happens to get you to stop telephone soliciting the 1019 number?

A. I can't say it's never happened but I can say that that would absolutely raise an amazing red flag, yes.

Q. Okay. So 10 percent wouldn't -- wouldn't get you to stop calling the 1019 number?

A. It could. Depends on other factors.

Q. Well, I'm -- I'm giving you your scenario where you said, you know, 5 percent opt-out rate, I telephone solicit the other 95 percent?

A. You're giving me hypotheticals and hypotheticals mean nothing.

Q. Well, you said that you go by statistics of the opt-out rate?

A. I'm telling you it's statistics. Over 2 percent is raising some type of a red flag, then everything else gets checked. I don't know what else you want me to say.

Q. And at what percent do you throw away all the remains opt-ins?

A. 20 percent or more.

Q. 20 percent or more?

A. Uh-huh. Which I don't think we've ever had.

⋮

Q. Why can't you use a double opt-in that prevents those unwanted calls and unwanted text messages.

A. We can.

Q. Okay. You can. So nothing is preventing you?

A. Nothing is preventing us. We just choose not to because we do -- we do 99 of the 100 things. That is a cost of $150,000. If I took every single one of my lawsuits, it would be significantly less than $150,000, so why would I want to spend $150,000 more on something that's costing $20,000 when 99.9999999 percent of the people will just say "stop the calls."

Q. Okay. But when you say $150,000, really, it's a penny a person?

A. 40,000 a day is $400 a day, times that by 365 days. And that's why I'm good at math, Mr. Barton.

Got a Case Like This?

If you’ve had similar problems with telemarketers, debt collectors, or bankruptcy-related harassment, we might feature your story in a future blog post. Email your situation or legal filing to peter@nwdebtresolution.com or nathen@nwdebtresolution.com.

Are telemarketers bothering you in Washington, Oregon, or Montana?

I handle TCPA lawsuits in Washington State and Oregon, and may be able to help.

📞 Call: 206-800-6000 / 971-800-6000

📧 Email: peter@nwdebtresolution.com

Note: The opinions in this blog are mine (Peter Schneider) and do not count as legal advice. If you're thinking of suing over illegal robocalls or Do Not Call list violations, contact me for a legal consultation.

Return to blog articles

Our blog articles organized into popular topics