[Senate Hearing 113-117]
[From the U.S. Government Publishing Office]
S. Hrg. 113-117
STOPPING FRAUDULENT ROBOCALL SCAMS:
CAN MORE BE DONE?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON CONSUMER PROTECTION, PRODUCT SAFETY, AND INSURANCE
of the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
JULY 10, 2013
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
JOHN D. ROCKEFELLER IV, West Virginia, Chairman
BARBARA BOXER, California JOHN THUNE, South Dakota, Ranking
BILL NELSON, Florida ROGER F. WICKER, Mississippi
MARIA CANTWELL, Washington ROY BLUNT, Missouri
MARK PRYOR, Arkansas MARCO RUBIO, Florida
CLAIRE McCASKILL, Missouri KELLY AYOTTE, New Hampshire
AMY KLOBUCHAR, Minnesota DEAN HELLER, Nevada
MARK WARNER, Virginia DAN COATS, Indiana
MARK BEGICH, Alaska TIM SCOTT, South Carolina
RICHARD BLUMENTHAL, Connecticut TED CRUZ, Texas
BRIAN SCHATZ, Hawaii DEB FISCHER, Nebraska
WILLIAM COWAN, Massachusetts RON JOHNSON, Wisconsin
MARTIN HEINRICH, New Mexico JEFF CHIESA, New Jersey
Ellen L. Doneski, Staff Director
James Reid, Deputy Staff Director
John Williams, General Counsel
David Schwietert, Republican Staff Director
Nick Rossi, Republican Deputy Staff Director
Rebecca Seidel, Republican General Counsel and Chief Investigator
------
SUBCOMMITTEE ON CONSUMER PROTECTION, PRODUCT SAFETY,
AND INSURANCE
CLAIRE McCASKILL, Missouri, DEAN HELLER, Nevada, Ranking
Chairman Member
BARBARA BOXER, California ROY BLUNT, Missouri
MARK PRYOR, Arkansas KELLY AYOTTE, New Hampshire
AMY KLOBUCHAR, Minnesota DAN COATS, Indiana
RICHARD BLUMENTHAL, Connecticut TED CRUZ, Texas
BRIAN SCHATZ, Hawaii DEB FISCHER, Nebraska
WILLIAM COWAN, Massachusetts
C O N T E N T S
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Page
Hearing held on July 10, 2013.................................... 1
Statement of Senator McCaskill................................... 1
Statement of Senator Heller...................................... 3
Statement of Senator Pryor....................................... 38
Witnesses
Lois Greisman, Associate Director, Division of Marketing
Practices, Bureau of Consumer Protection, Federal Trade
Commission..................................................... 4
Prepared statement........................................... 6
Eric J. Bash, Associate Chief, Enforcement Bureau, Federal
Communications Commission...................................... 18
Prepared statement........................................... 20
Kevin Rupy, Senior Director, Law and Policy, United States
Telecom Association............................................ 32
Prepared statement........................................... 33
Michael F. Altschul, Senior Vice President and General Counsel,
CTIA--The Wireless Association................................ 38
Prepared statement........................................... 40
Matthew Stein, Chief Technology Officer, Primus
Telecommunications Inc......................................... 43
Prepared statement........................................... 45
Aaron Foss, Freelance Software Developer, Nomorobo............... 46
Prepared statement........................................... 48
Appendix
Response to written questions submitted to Lois Greisman by:
Hon. Claire McCaskill........................................ 61
Hon. Amy Klobuchar........................................... 63
Hon. Mark Warner............................................. 64
Hon. Dan Coats............................................... 66
Response to written questions submitted to Eric J. Bash by:
Hon. Claire McCaskill........................................ 66
Hon. Amy Klobuchar........................................... 68
Hon. Mark Warner............................................. 68
Hon. Dan Coats............................................... 70
Response to written questions submitted to Kevin G. Rupy by:
Hon. Claire McCaskill........................................ 70
Hon. Mark Warner............................................. 75
Hon. Dan Coats............................................... 77
Response to written questions submitted to Michael F. Altschul
by:
Hon. Claire McCaskill........................................ 77
Hon. Mark Warner............................................. 77
Hon. Dan Coats............................................... 79
Response to written questions submitted to Matthew Stein by:
Hon. Mark Warner............................................. 79
Hon. Dan Coats............................................... 82
Response to written questions submitted to Aaron Foss by:
Hon. Mark Warner............................................. 82
Hon. Dan Coats............................................... 84
STOPPING FRAUDULENT ROBOCALL SCAMS: CAN MORE BE DONE?
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WEDNESDAY, JULY 10, 2013
U.S. Senate,
Subcommittee on Consumer Protection, Product
Safety, and Insurance,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10 a.m. in
room SR-253, Russell Senate Office Building, Hon. Claire
McCaskill, presiding.
OPENING STATEMENT OF HON. CLAIRE McCASKILL,
U.S. SENATOR FROM MISSOURI
Senator McCaskill. Welcome, everyone. This hearing will
come to order. We appreciate you being here.
We have all been subject to the frustrations and annoyances
of receiving unwanted telemarketing calls, also known as
robocalls. It seems these calls always intrude at a very
inconvenient time.
Ten years ago, the Federal Trade Commission and the Federal
Communications Commission, at the direction of Congress,
established a National Do Not Call Registry so that consumers
could get some peace and quiet in their homes and stop the
torrent of unsolicited telemarketing calls. The idea was
simple: voluntarily register your phone number on a centralized
list, and telemarketers would be prohibited by law from calling
you. The registry has been celebrated across party lines as a
successful government program that provides real benefits to
consumers.
While the National Do Not Call Registry has been effective
at limiting intrusions by legitimate telemarketers, fraudulent
robocalls have since filled the void and have become the source
of understandable anger and frustration among the public. These
automated, prerecorded telemarketing calls that often seek
personal information from unsuspecting consumers are an
annoyance at best, but they can be devastating for those that
are defrauded by them.
It is easy to see how consumers can easily be confused by
these calls. One common scam involves a call from Rachel from
``Cardholder Services'' offering an easy way to reduce
consumers' credit card interest rates.
[Audio played.]
Senator McCaskill. Another common scam involves robocalls
warning consumers that their auto warranty is about to expire.
[Audio played.]
Senator McCaskill. In both examples, with the press of a
button, the consumer is directed to an individual whose job is
to collect financial information in an effort to defraud them.
Even pressing the button they claim removes a caller from their
list does nothing more than identify a phone number as valid,
likely increasing the frequency of unwanted calls in the
future.
Law enforcement officials have estimated that telemarketing
fraud costs Americans over $40 billion annually. So it is no
wonder that robocalls consistently remain a top consumer
complaint at the FTC as well as the FCC. The FTC alone receives
more than 200,000 complaints about robocalls every month.
Complaints received from consumers in the state of Missouri
alone have roughly doubled every year since 2009.
The FTC and FCC have taken important steps to try and stop
fraudulent robocalls. Both commissions have issued rules
restricting robocalls, and they have taken enforcement actions
to protect consumers.
Since the National Do Not Call Registry started, the FTC
has won more than $250 million in civil penalties and equitable
relief for consumers against robocalls. But because these shady
companies and individuals are often based overseas and very
difficult to locate, the FTC has only been able to collect $15
million out of the $250 million that they have in fact gotten
authorization to collect.
Today we will hear from the FTC and the FCC about their
efforts to implement the National Do Not Call Registry and
other telemarketing rules. We will hear about their successes
and their challenges in pursuing fraudulent robocalls, as well
as their suggestions for how we can stem the tide of the
alarming number of robocalls being placed to Americans every
day.
Advances in technology have made it cheap and easy for an
individual anywhere in the world with a computer and a
broadband connection to make thousands and even millions of
robocalls at the push of a button.
Last year, recognizing the limits of regulation and law
enforcement in stopping these kinds of calls, the FTC launched
a public competition asking American innovators to put forth
their best ideas for a technological solution that would weed
out fraudulent robocalls. In April, the FTC announced its
winners.
Among the three winners of the FTC challenge was Nomorobo,
a technology that would screen out fraudulent callers in much
the same way that a spam filter screens out unwanted e-mails.
We will hear from that product's developer about his innovative
idea and what it would take to make it or something like it a
viable tool for every American consumer.
It would seem the technological and legal barriers to a
technological solution are not insurmountable. Primus, a
Canadian telecommunications provider, offers its customers a
free ``Telemarketing Guard'' that similarly screens out
fraudulent callers. We will hear from its inventor and chief
technology officer about its service.
We will also hear from our domestic wireline and wireless
telephone service industries, represented here by the United
States Telecom Association and CTIA--The Wireless Association,
about the steps the industry has taken, is taking, and could
take in the future to help address the consumer harm from
fraudulent robocalls.
Ten years of the National Do Not Call Registry, by all
accounts, has accomplished precisely what Congress and the FTC
intended. However, fraudulent robocalls and advancing
technology has allowed scammers looking to make a quick buck
with no regard for the law--they remain a serious annoyance and
abuse that faces consumers.
Similarly, the exceptions to the Do Not Call Registry for
charities, political calls, and businesses with which consumers
have an existing relationship also remain a nuisance for
consumers. In exploring regulatory, statutory, or technological
changes to address the problem of robocalls, giving the
consumers the choice to stop all unwanted calls--charities,
political, and businesses with existing relationships to the
consumer--stopping all of those calls, regardless of who places
them, should be our ultimate goal. The choice here should rest
firmly in the hands of the phone that rings.
And I will turn it over now to Senator Heller.
STATEMENT OF HON. DEAN HELLER,
U.S. SENATOR FROM NEVADA
Senator Heller. Thank you. And good morning. Chairman
McCaskill, thanks for holding this hearing.
And I want to thank our witnesses for being here and those
in the audience also that are interested in what I think is a
very important hearing. And having your participation is
important in moving this forward.
Congress has been looking for ways to limit unsolicited
telephone calls since 1991 when the Telephone Consumer
Protection Act was passed. In 1994, Congress acted again when
the Telemarketing Consumer Fraud and Abuse Prevention Act was
signed into law. These laws gave the FCC and the FTC
commissions the authority to enact regulations on telephone
solicitations and the use of automated telephone equipment to
make these solicitations.
These laws clearly prohibited any telemarketer from
initiating or any seller from causing a telemarketer to
initiate an outbound telephone call to a person when that
person previously had stated that he or she does not wish to
receive a call. So there shouldn't be any confusion as to the
intent of Congress when these bills were passed. People have a
right to free themselves from telephone solicitations.
As we come up on the 10th year anniversary of the National
Do Not Call Registry, I think it is important to note this has
been, to a degree, a successful government program. The FTC and
the FCC deserve credit for promoting this program and ensuring
that it functions correctly.
Solicitors for the most part have honored the wishes of
consumers, and when a solicitor has broken the rules, the FTC
and/or the FCC have acted appropriately. In fact, on June 27,
2013, the FTC announced a $7.5 million civil penalty for
violations by a refinancer of veterans' home loans, which,
according to the FTC, is the largest fine that has ever been
collected.
Despite the popularity of the Do Not Call Registry and the
actions of the FTC and the FCC, there has been a noticeable
rise in the number of illegal robocalls over the last several
years. Between October 2008 and September 2009, the FTC
received over 700,000 complaints involving calls using a
recorded message. Between October 2011 and September 2012,
these complaints increased over 2 million.
The FTC and the FCC are actively engaged in stopping these
illegal robocalls, but they have admitted to the significant
challenges they face against new and emerging technologies,
including sophisticated Voice-over-Internet-Protocol enabled
auto-dialers and the use of fake caller ID systems.
Companies using auto-dialers can send out thousands of
phone calls every minute at almost no cost. Some of these
companies do not screen against the Do Not Call Registry and
use this solicitation to scam an individual.
I have here with me a recent article in USA Today that
outlined an example of this type of scam. In fact, it came out
this month, on July 4, and it is called ``Your Money: Seniors
Fight Back Against Robocalls.'' And it gave a specific example
of what is happening out there, and I would like to take a
couple of paragraphs, if I may.
``The automated voice implies that a doctor or a
relative signed the consumer up for a medical alert
system, and it is all free. Authorities said that, in
some cases, after consumers press a button to accept
the offer, they quickly receive another call asking for
personal information, including credit card numbers.
This might be con artists trying to get bank or credit
card information or a Social Security number to use in
ID theft, or it is a way to pressure seniors into
paying for equipment or services that they don't need.
The medical alert system scam is in full swing in
Michigan, according to the state attorney general's
office, as well as in other states, including
Pennsylvania, New York, Texas, Wisconsin, and
Kentucky.''
Today's hearing is an opportunity for the Senate to hear
more about the actions of the FCC and the FTC, what they are
taking, as well as from the private sector on what technologies
are available to help consumers free themselves from unwanted
telephone solicitations.
I am looking forward to the testimonies of our panelists
and again thank the Chairman for calling this important
hearing.
Senator McCaskill. Thank you very much.
We will now hear from our witnesses. And we have two
witnesses on our first panel. The first panel is Lois
Greisman--we are happy to have you here--and Eric Bash, from
the FCC and the FTC.
And we are happy to have both of you, and we look forward
to your testimony.
Ms. Greisman?
STATEMENT OF LOIS GREISMAN, ASSOCIATE DIRECTOR,
DIVISION OF MARKETING PRACTICES, BUREAU OF
CONSUMER PROTECTION, FEDERAL TRADE COMMISSION
Ms. Greisman. Thank you. And good morning, Chairman
McCaskill, Ranking Member Heller. I am delighted to appear
before you this morning to discuss the FTC's work to fight
illegal robocalls. And we are very much appreciative of your
leadership in the consumer protection area.
I am also pleased to be sitting next to my friend and
former colleague, Eric Bash. Both he and the FCC have been
outstanding partners in our fight against telemarketing fraud.
As you noted, by establishing the Do Not Call Registry 10
years ago, the Federal Trade Commission gave consumers an easy-
to-use tool to protect their privacy against unwanted calls. I
believe, as you indicated, that the do-not-call program has
been highly effective in reducing unwanted calls from
legitimate telemarketers. Enforcing the do-not-call provisions
is a top priority for the agency, and the more than 100 cases
filed by the FTC reflect that priority.
But several years ago, we observed a troubling shift in the
landscape: robocalls. And I want to talk briefly about what
gave rise to the new problem and how we are marshalling all of
our resources to tackle illegal robocalls and to protect
consumers.
Technological changes in communication services have
brought enormous benefits to consumers by way of lower costs
and improved services. At the same time, however, fraudsters
have also taken advantage of these lower costs, which brought
faster and cheaper automated-dialing platforms. Fraudsters have
also further exploited caller ID spoofing, which induces the
consumer to pick up the phone, while at the same time enabling
the scammer to hide its identity and location. And, of course,
with phone calls bouncing from country to country all over the
world, it is now easier than ever for the robocaller to hide.
With such a cheap and scalable business model, bad actors
can blast literally tens of millions of illegal robocalls over
the course of a single day at less than 1 cent per minute.
These robocalls not only invade consumers' privacy, quite often
they pitch goods and services riddled with fraud.
To meet this challenge, we stepped up our law enforcement
initiatives. Looking just at the cases we have completed
involving robocalls, we have shut down entities that placed
billions of such calls and we have obtained court orders
totaling more than $200 million in redress or disgorgement and
also more than $51 million in civil penalties.
And we have strategically targeted entities that we believe
facilitate the illegal robocallers. Specifically, we have sued
entities that afford access to massive dialer or voice-blasting
platforms that initiate the calls. We have also sued entities
known as payment processors that afford access to the financial
system and enable the robocallers to process payments from
consumers.
And, of course, our coordination with state, Federal, and
international partners is as strong as ever. And I am happy to
report that some of the individuals sued by the Federal Trade
Commission for placing illegal calls have also been prosecuted
criminally by the Department of Justice.
We knew, though, that law enforcement was not enough and
that more was needed. Toward those ends, we hosted a robocall
summit last October, bringing together key players, engineers,
academics, industry members, and of course law enforcers. We
analyzed the technological changes that had given rise to the
robocall tidal wave and existing structural impediments that
served as obstacles to enhanced consumer protection.
Recognizing consumers' frustration with robocalls, which we
all share, we wanted solutions now. So we used the summit to
launch the FTC's first public contest, which you discussed. It
was a huge success in stimulating the marketplace to innovate
and develop technological solutions that would help consumers
block illegal robocalls.
Mr. Foss's participation in the next panel illustrates the
impact of the FTC's challenge to spur competition. He was 1 of
3 winners, but nearly 800 eligible solutions were submitted,
many of which presented well-thought-out technical proposals.
And, as always, consumer education and outreach remain
indispensable tools that complement our law enforcement and
policy work.
Finally, I want to assure you of our ongoing and sustained
commitment to protect consumer privacy and halt illegal
telemarketing fraud by enforcing the Do Not Call Registry and
by tackling illegal robocalls. And I look forward to any
questions you may have.
Thank you.
[The prepared statement of Ms. Greisman follows:]
Prepared Statement of the Federal Trade Commission
Chairman McCaskill, Ranking Member Heller, and members of the
Subcommittee, I am Lois Greisman, Associate Director of the Division of
Marketing Practices, Bureau of Consumer Protection at the Federal Trade
Commission (``Commission'' or ``FTC'').\1\ I appreciate the opportunity
to appear before you today to discuss the Commission's initiatives to
fight illegal robocalls.
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\1\ The views expressed in this statement represent the views of
the Commission. My oral presentation and responses to questions are my
own and do not necessarily reflect the views of the Commission or any
individual Commissioner.
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In 2003, the FTC responded to enormous public frustration with
unsolicited sales calls and amended the Telemarketing Sales Rule
(``TSR'') to create a national Do Not Call Registry.\2\ The Registry,
which currently includes more than 221 million telephone numbers,\3\
has been tremendously successful in protecting consumers' privacy from
the unwanted calls of tens of thousands \4\ of legitimate telemarketers
who participate in the Registry each year.\5\ More recently, changes in
technology led to a new source of immense frustration--the blasting of
prerecorded messages using Voice over Internet Protocol (``VoIP'')
technology.\6\ In 2008, the Commission responded by amending the TSR to
address this problem, prohibiting the vast majority of prerecorded
sales calls unless the recipient has provided express written consent
to receive them.\7\
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\2\ 68 Fed. Reg. 4580 (Jan. 29, 2003); 16 C.F.R. Part 310. The FTC
issued the TSR pursuant to the Telemarketing and Consumer Fraud and
Abuse Prevention Act, 15 U.S.C. Sec. Sec. 6101-6108.
\3\ See Appendix A, National Do Not Call Registry Active
Registrations and Complaint Figures.
\4\ For example, in Fiscal Year 2012, more than 28,000
telemarketers accessed the Do Not Call Registry. National Do Not Call
Registry Data Book FY 2012 at 8 (Oct. 2012), available at http://
www.ftc.gov/os/2012/10/1210dnc-databook.pdf.
\5\ Humorist Dave Barry called the Do Not Call Registry ``the most
popular Federal concept since the Elvis stamp.'' See Dave Barry, Idea
for telemarketers: Hang up and go away, Deseret News, Aug. 31, 2003,
available at http://www.deseretnews.com/article/1006979/Idea-for-
telemarketers-Hang-up-and-go-away.html.
\6\ See Section II(A), infra.
\7\ 73 Fed. Reg. 51164 (Aug. 29, 2008); 16 C.F.R. Part
310.4(b)(1)(v). The FTC had already brought robocall-related
enforcement actions prior to 2008, alleging that defendants made
illegal ``abandoned calls,'' because their robocalls did not ``connect
the call to a sales representative within two seconds of the completed
greeting of the person who answer[ed].'' 16 C.F.R. Part
310.4(b)(1)(iv). Any telemarketing campaign consisting solely of
prerecorded messages would always violate that provision, and would not
meet the abandoned call safe harbor requirements under the TSR. See 16
C.F.R. Part 310.4(b)(4). Nonetheless, the Commission amended the TSR to
explicitly prohibit unsolicited robocalls, considering it beneficial to
make the prohibition more prominent.
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Illegal robocalls are still a significant consumer protection
problem today, because they repeatedly disturb consumers' privacy and
many of them peddle fraudulent goods and services that cause
significant economic harm. Therefore, the FTC is using every tool at
its disposal to fight them.\8\ This testimony describes the
Commission's efforts to stop telemarketer violations, including our
aggressive law enforcement, initiatives to spur technological
solutions, and broad consumer and business outreach.
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\8\ See FTC Robocall Action Plan, http://www.ftc.gov/robocalls.
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I. Do Not Call and Robocall Law Enforcement
Since the Do Not Call Registry was established in 2003,\9\ the
Commission has fought vigorously to protect consumers' privacy from
unwanted calls. Indeed, two weeks ago on the 10th anniversary of the Do
Not Call Program, the Commission announced that Mortgage Investors
Corporation, one of the Nation's leading refinancers of veterans' home
loans, will pay $7.5 million, the largest Do Not Call fine the FTC has
ever collected.\10\ This case is the 105th enforcement action since the
Commission began enforcing the Do Not Call provisions of the TSR in
2004.\11\ Through these enforcement actions, the Commission has sought
civil penalties,\12\ restitution for victims of telemarketing scams,
and disgorgement of ill-gotten gains from the 298 companies and 234
individuals involved. Although a number of cases remain in litigation,
the 81 cases that have concluded thus far have resulted in orders
totaling more than $126 million in civil penalties and $741 million in
redress or disgorgement. In the first several years of the Registry's
existence, consumers reported that the Do Not Call program was highly
effective in reducing the number of unwanted telemarketing calls they
received.\13\
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\9\ In 2003, two different district courts issued rulings enjoining
the Do Not Call Registry. See Press Release, FTC Files Motion to Stay
Pending Appeal in Oklahoma DNC Ruling (Mar. 24, 2003), available at
http://www.ftc.gov/opa/2003/09/dncok.shtm; Press Release, Statement of
FTC Chairman Timothy J. Muris (Sept. 26, 2003), available at http://
www.ftc.gov/opa/2003/09/dnc030926.shtm. Congress addressed the first
decision in summary fashion by enacting HR 3161 in one day. See ``HR
3161 (108th) Do-Not-Call-Registry bill,'' http://www.govtrack.us/
congress/bills/108/hr3161; Press Release, Statement of FTC Chairman
Timothy J. Muris (Sept. 25, 2003), available at ttp://www.ftc.gov/opa/
2003/09/dnc030926.shtm. The 10th Circuit reversed the second district
court decision on February 17, 2004. See Press Release, Appeals Court
Upholds Constitutionality of National Do Not Call Registry (Feb. 17,
2004), available at http://www.ftc.gov/opa/2004/02/dncappeal.shtm.
\10\ See Press Release, Mortgage Broker Targeting U.S.
Servicemembers Will Pay Record $7.5 Million to Settle Alleged
Telemarketing Violations (June 27, 2013), available at http://
www.ftc.gov/opa/2013/06/donotcall.shtm.
\11\ The 105 Do Not Call actions include cases that involve the
rule provisions prohibiting unauthorized robocalls, which also invade
consumers' privacy and may be deceptive as well.
\12\ As is true of for all TSR violations, telemarketers who
violate the Do Not Call provisions are subject to civil penalties of up
to $16,000 per violation. 15 U.S.C. Sec. 45(m)(1)(A); 16 C.F.R.
1.98(d).
\13\ For example, in October 2007, an independent study by Harris
Interactive found that of the 72 percent of Americans who had
registered their telephone numbers for the Do Not Call Registry, 18
percent reported that they currently received no telemarketing calls,
59 percent reported that they still received some, but far fewer than
before they signed onto the Registry, and 14 percent said they received
some, but a little less than before they registered. Previous surveys
had similar results. See Annual Report to Congress for FY 2007 Pursuant
to the Do-Not-Call Implementation Act on Implementation of the National
Do Not Call Registry, at 4-5, n.10 (July 2008), available at http://
www.ftc.gov/os/2008/07/P034305FY0dncreport.pdf.
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On September 1, 2009, new TSR provisions went into effect
prohibiting the vast majority of sales robocalls,\14\ unless the
telemarketer has the consumer's prior written authorization to transmit
such calls.\15\ The robocall provisions cover prerecorded calls to all
consumers, including those who have not registered their phone number
on the Do Not Call Registry. The Commission has been aggressive in
enforcing prohibitions on robocalls, bringing 34 cases involving
illegal prerecorded calls against 97 companies and 77 individuals.\16\
These actions have shut down entities responsible for billions of
illegal robocalls, and the 22 cases that have concluded thus far have
resulted in orders totaling more than $51 million in civil penalties
and $202 million in redress or disgorgement. Some of the Commission's
early robocall cases were against companies with household names such
as Dish Network, DIRECTV, and Talbots.\17\
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\14\ Like the other provisions of the TSR, the robocall provisions
do not apply to non-sales calls, such as calls placed by charities or
those that are pure political, informational, or survey calls. See
generally ``Complying with the Telemarketing Sales Rule'' (Feb. 2011),
available at http://business.ftc.gov/documents/bus27-complying-
telemarketing-sales-rule.
\15\ 16 C.F.R. Part 310.4(b)(1)(v). Limited exceptions exist for
calls that deliver a healthcare message made by an entity covered by
the Health Insurance Portability and Accountability Act, 16 C.F.R. Part
310.4(b)(1)(v)(D), and for certain calls placed by telemarketers who
solicit charitable contributions, 16 C.F.R. Part 310.4(b)(1)(v)(B).
\16\ The FTC filed 12 of the 34 cases before the rule change went
into effect on September 1, 2009.
\17\ See U.S. v. The Talbots, Inc., No. 10-cv-10698 (D. Mass. Apr.
27, 2010), available at http://www.ftc.gov/opa/2010/04/talbots.shtm;
U.S. v. Dish Network, LLC, No. 3:09-cv-03073 (C.D. Ill. Feb. 4, 2010),
available at http://www.ftc.gov/opa/2009/03/echostar.shtm; U.S. v.
DIRECTV, Inc., No. 09-02605 (C.D. Cal. Apr. 23, 2009), available at
http://www.ftc.gov/opa/2009/04/directv.shtm.
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Yet increasingly, robocalls that plague consumers are initiated by
fraudsters, who often hide out in other countries in an attempt to
escape detection and punishment. One example is the defendants in FTC
v. Navestad, who the Commission successfully traced and sued even after
they attempted to hide their identities through fake caller IDs,
shifting foreign operations, and name changes. The court found that the
defendants made in excess of eight million robocalls, and ordered them
to pay $30 million in civil penalties and give up more than $1.1
million in ill-gotten gains.\18\ Unfortunately, the two defendants are
currently in hiding overseas.
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\18\ FTC v. Navestad, No. 09-CV-6329 (W.D.N.Y. Mar. 23, 2012),
available at http://www.ftc.gov/opa/2012/04/cashgrant.shtm.
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A. Coordination with Law Enforcement Partners
1. State, Federal, and International Coordination
As the law enforcement challenges associated with illegal
telemarketing have increased, the FTC's relationships with other
agencies have become ever more important. The Commission has robust
collaborative relationships with state law enforcers, including through
the National Association of Attorneys General Do Not Call working
group. In addition, the FTC regularly works with the Federal
Communications Commission (``FCC''), the Department of Justice, the
U.S. Postal Inspection Service, and U.S. Attorneys' Offices across the
country. The Commission also coordinates with its counterparts in other
countries on particular cases and broader strategic matters such as
caller ID ``spoofing''--the practice of faking a call's identifying
information.
The FTC's collaboration with its partners takes many different
forms, including sharing information and targets, assisting with
investigations, and working together on long-term policy initiatives.
The agency also coordinates with various partners to bring law
enforcement ``sweeps''--multiple simultaneous law enforcement actions--
that focus on specific types of telemarketing fraud.\19\ One recent
example is a concerted attack on illegal robocalls purporting to be
from ``Rachel'' or others from ``Cardholder Services,'' which pitch a
supposedly easy way to save money by reducing consumers' credit card
interest rates. The FTC brought five cases against companies that were
allegedly responsible for millions of these illegal calls. The
Commission simultaneously announced that state law enforcement partners
in Arizona, Arkansas, and Florida had filed separate law enforcement
actions as part of the same sweep.\20\
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\19\ The following describe some of the telemarketing and robocall
sweeps that the FTC and its law enforcement partners have conducted
over the past several years: Press Release, FTC Leads Joint Law
Enforcement Effort Against Companies that Allegedly Made Deceptive
``Cardholder Services'' Robocalls (Nov. 1, 2012), available at http://
www.ftc.gov/opa/2012/11/robocalls.shtm; Press Release, FTC Settlements
Put Debt Relief Operations Out of Business (May 26, 2011), available at
http://www.ftc.gov/opa/2011/05/amsdynamic.shtm; Press Release, FTC Sues
to Stop Robocalls with Deceptive Credit Card Interest-Rate Reduction
Claims (Dec. 8, 2009), available at http://www.ftc.gov/opa/2009/12/
robocall.shtm; Press Release, FTC Cracks Down on Scammers Trying to
Take Advantage of the Economic Downturn (July 1, 2009), available at
http://www.ftc.gov/opa/2009/07/shortchange.shtm; Press Release, FTC
Announces ``Operation Tele-PHONEY,'' Agency's Largest Telemarketing
Sweep (May 20, 2008), available at http://www.ftc.gov/opa/2008/05/
telephoney.shtm.
\20\ See Press Release, FTC Leads Joint Law Enforcement Effort
Against Companies that Allegedly Made Deceptive ``Cardholder Services''
Robocalls (Nov. 1, 2012), available at http://www.ftc.gov/opa/2012/11/
robocalls.shtm.
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2. Referrals for Criminal Prosecution
Although the Commission does not have criminal law enforcement
authority, it recognizes the importance of criminal prosecution in
deterrence. Accordingly, the Commission routinely works with Federal
and state criminal law enforcers through its Criminal Liaison Unit
(``CLU''). Since CLU's launch in 2003, hundreds of fraudulent
telemarketers have found themselves facing criminal charges and prison
time. One example is the Voice Touch case, which involved the use of
robocalls to advertise an auto warranty scam. The FTC case shut down
the scam and resulted in almost $3.2 million in redress to
consumers,\21\ and the Office of the U.S. Attorney for the Southern
District of Illinois subsequently brought criminal charges. Three of
the fraud's principals have pleaded guilty and gone to prison, with the
two leaders of the scheme each sentenced to five years.\22\
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\21\ Press Release, FTC Returns Almost $3.2 Million to Auto
Warranty Robocall Victims (Aug. 31, 2011), available at http://
www.ftc.gov/opa/2011/08/voicetouch.shtm; FTC v. Voice Touch, Inc., No.
09CV2929 (N.D. Ill. Aug. 23, 2010), available at http://www.ftc.gov/os/
caselist/0823263.
\22\ Department of Justice (``DOJ'') Press Release, ``Auto
Warranty'' Telemarketer Pleads Guilty (June 15, 2012), available at
http://www.justice.gov/usao/ils/News/2012/Jun/
06152012_Dolan%20Press%20Release.html; DOJ Press Release, Update on
Transcontinental Warranty Case (Oct. 31, 2011), available at http://
www.justice.gov/usao/ils/Programs/VWA/transcontinental.html.
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Another example is Kara Singleton Adams, the leader of a scam that
used robocalls to sell worthless credit card interest rate reduction
services. Not only did the Commission act to shut down the
operation,\23\ a Federal jury in Atlanta subsequently convicted Adams
on charges of wire fraud and conspiracy, among other things. In 2012,
the court sentenced her to more than 17 years' imprisonment. Three of
her associates in the scheme also went to prison.\24\
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\23\ FTC v. Econ. Relief Techs., LLC, No. 09-CV-3347 (N.D. Ga. July
22, 2010), available at http://www.ftc.gov/os/caselist/0923118.
\24\ DOJ Press Release, Adams Sentenced to Over 17 Years in Prison
for Multi-Million Dollar Telemarketing Fraud Scheme (Feb. 9, 2012),
available at http://www.justice.gov/usao/gan/press/2012/02-09-12.html.
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B. Strategic Targeting for Maximum Impact
The Commission constantly seeks innovative ways to maximize its
resources and its impact on those responsible for illegal
robocalls.\25\ Often, telemarketers' deceptive and abusive practices
are facilitated by third parties, such as auto-dialers, which provide
the software needed to blast out millions of calls, and payment
processors, which enable fraudulent telemarketers to reach into
consumers' bank accounts. The FTC has increasingly targeted gatekeepers
that have tended to service large numbers of rogue telemarketers and
therefore offer a way to strike a blow to many law-breakers with only
one case.
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\25\ As an example, the FTC recently created a robocall
``honeypot,'' which is a group of phone numbers from around the country
that the Commission controls, permitting it to receive robocalls
directly. This allows the Staff to quickly amass information about who
is making the calls and to have recordings in-house, thus facilitating
a more rapid law enforcement response.
Money flows in many directions within a robocall operation. \26\
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\26\ The PSTN is the ``Public Switched Telephone Network.'' It
consists of transmission facilities (e.g., phone lines, fiber optic
cables, microwave transmission links, cellular radios, communication
satellites, etc.) and switching facilities (central office switches,
databases for 800 number translation, gear for cellular handoffs,
multiplexors, etc.).
First, the Commission aggressively pursues companies that provide
the equipment and software necessary to send out millions of calls,
sometimes referred to as ``voice broadcasters'' or ``autodialers.''
\27\ One example is FTC v. Asia Pacific Telecom, Inc., in which the FTC
alleged that defendants were responsible for violating the TSR by
placing billions of prerecorded phone calls on behalf of unscrupulous
telemarketers. These robocalls pitched worthless extended auto
warranties and credit card interest rate reduction programs while using
spoofed Caller ID names--such as ``SALES DEPT''--and phone numbers
registered to companies with overseas offices in the Northern Mariana
Islands, Hong Kong, and the Netherlands. In 2012, the Commission
reached a settlement under which the defendants are banned from all
telemarketing, from misrepresenting any good or service, and from
selling or otherwise benefitting from customers' personal information.
The order imposed a $5.3 million judgment that was suspended, based on
the defendants' inability to pay, after they had surrendered assets
valued at approximately $3 million.\28\
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\27\ U.S. v. Skyy Consulting, Inc., also d/b/a CallFire, No. 13-CV-
2136 (N.D. Cal. May 14, 2013), available at http://www.ftc.gov/os/
caselist/1223011; FTC v. Asia Pac. Telecom, Inc., No. 1:10-3168 (N.D.
Ill. Mar. 28, 2012), available at http://www.ftc.gov/os/caselist/
1023060; U.S. v. Brian Ebersole, No. 3:12-cv-00105 (D. Nev. Feb. 29,
2012), available at http://ftc.gov/os/caselist/0923174; U.S. v. Sonkei
Commc'ns, No. SACV11-1777 (C.D. Cal. Nov. 22, 2011), available at
http://ftc.gov/os/caselist/1123060; U.S. v. Voice-Mail Broad. Corp.,
No. cv-08-00521 (C.D. Cal. Jan. 29, 2008), available at http://
www.ftc.gov/os/caselist/0523182; U.S. v. The Broadcast Team, Inc., No.
6:05-cv-01920 (M.D. Fla. Feb. 2, 2007), available at http://
www.ftc.gov/os/caselist/0523025/0523025.shtm.
\28\ FTC v. Asia Pac. Telecom, Inc., No. 1:10-3168 (N.D. Ill. Mar.
28, 2012), available at http://www.ftc.gov/os/caselist/1023060. The
full judgment will become due immediately if the defendants are found
to have misrepresented their financial condition.
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Second, the FTC has increasingly taken action against payment
processors when they assist and facilitate telemarketers engaged in
deceptive practices, providing access to the financial system and, in
turn, consumers' money.\29\ Two amended complaints the FTC filed in
June provide examples of the agency's enforcement in this area. In both
cases, the Commission sued telemarketing operations allegedly peddling
bogus credit card interest rate reduction services. After obtaining
temporary restraining orders against the defendants and beginning
discovery, the FTC moved to amend both complaints to include the
defendants' payment processors. The Commission alleges that the payment
processors knew, or consciously avoided knowing, key facts about the
illegal telemarketing,\30\ and chose to continue profiting from the
illegal activity by processing consumers' payments to the original
defendants.\31\
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\29\ See, e.g., FTC v. Automated Elec. Checking, Inc., No. 3:13-cv-
00056 (D. Nev. Mar. 13, 2013), available at http://ftc.gov/os/caselist/
1223102; FTC v. Landmark Clearing, Inc., No. 4:11-cv-00826 (E.D. Tex.
June 27, 2013), available at http://www.ftc.gov/os/caselist/1123117.
\30\ 16 C.F.R. Part 310.3(b).
\31\ FTC v. Innovative Wealth Builders, Inc., No. 13-cv-00123 (M.D.
Fla. June 5, 2013), available at http://www.ftc.gov/os/caselist/
1223127; FTC v. WV Universal Mgmt., LLC, No. 6:12-CV-1618 (M.D. Fla.
June 21, 2013), available at http://www.ftc.gov/os/caselist/1223190.
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In sum, the Commission seeks to identify and attack chokepoints for
illegal telemarketing.
II. Policy and Market Stimulation Initiatives
Despite the 2008 prohibition of unauthorized robocalls and the
Commission's vigorous enforcement efforts, technological advances have
permitted law-breakers to continue to profit from illegal robocall
campaigns. In the fourth quarter of 2009, the FTC received about 63,000
complaints about illegal robocalls each month.\32\ That number
ballooned in three years, to an average of approximately 200,000
complaints per month in the fourth quarter of 2012.\33\
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\32\ National Do Not Call Registry Data Book FY 2010 at 5 (Nov.
2010), available at http://www.ftc.gov/os/2010/12/
101206dncdatabook.pdf. Since that time, the FTC began separately
tracking Do Not Call complaints and robocall complaints based on
information provided by the consumer.
\33\ National Do Not Call Registry Data Book FY 2012 at 5 (Oct.
2012), available at http://www.ftc.gov/os/2012/10/1210dnc-databook.pdf.
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Number of robocall complaints filed with the FTC each month \34\
\34\ While this chart suggests recent positive trending of self-
reported complaints, it has in no way diminished the Commission's law
enforcement efforts.
The public's anger has increased with the number of illegal
robocalls.\35\ Robocalls propagate harmful frauds; indeed, the
estimated consumer harm associated with the 22 FTC lawsuits against
robocallers that have concluded thus far amounts to more than $202
million.\36\ Illegal robocalls also have a significant impact on
quality of life by repeatedly invading the privacy and peace of
consumers' homes.\37\
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\35\ See generally FTC Workshop, Robocalls: All the Rage (Oct. 18,
2012). A webcast of the workshop, a transcript of the event, PowerPoint
presentations, and other related materials are available at http://
www.ftc.gov/bcp/workshops/robocalls. References to the workshop
transcript (``Tr.'') identify the speaker and the transcript page. See,
e.g., Zoeller, Tr. at 86-87; Bash, Tr. at 88-89; Maxson, Tr. at 89-90.
\36\ This estimate is based on the FTC's equitable monetary relief
awards, and excludes civil penalties ordered in the same cases. In
addition, it only includes cases that involved robocalls. The estimated
consumer harm associated with the FTC's 81 concluded Do Not Call
actions amounts to more than $741 million.
\37\ See, e.g., Maxson, Tr. at 90-92; Zoeller, Tr. at 86-88; see
also FTC, Robocall Challenge Comments [hereinafter Public Comment],
available at http://www.ftc.gov/os/comments/robocallchallenge; Michelle
Block, Public Comment, cmt. #565017-00015, at 1 (explaining how
robocalls can cause her to lose desired assignments as a substitute
teacher).
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A. Coordinating with Technical Experts, Industry, and Other
Stakeholders
Convinced that law enforcement alone is not enough to solve the
problem, FTC Staff has aggressively sought new strategies in ongoing
discussions with academic experts, telecommunications carriers,
industry coordinating bodies, technology and security companies,
consumers, and counterparts at federal, state, and international
government bodies. To that end, on October 18, 2012, the Commission
hosted a public summit on robocalls to explore these issues (the
``Robocall Summit'').\38\
---------------------------------------------------------------------------
\38\ See generally FTC Workshop, Robocalls: All the Rage (Oct. 18,
2012), http://www.ftc.gov/bcp/workshops/robocalls.
---------------------------------------------------------------------------
The Robocall Summit made clear that convergence between the legacy
telephone system and the Internet has given rise to massive, unlawful
robocall campaigns. The telephone network has its origins in a manual
switchboard that allowed a human operator to make connections between
two known entities.\39\ A small group of well-known carriers were in
control and were highly regulated.\40\ Placing calls took significant
time and money, and callers could not easily conceal their
identities.\41\
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\39\ Bellovin, Tr. at 12.
\40\ Schulzrinne, Tr. at 22; Rupy, Tr. at 46-47; Diggs, Tr. at 55.
\41\ Bellovin, Tr. at 12-17.
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Now, communications technology is universal and standardized such
that entrepreneurs can build up a viable telephone services business
wherever they find an Internet connection.\42\ As a result, the number
of service providers has grown exponentially and now includes thousands
of small companies all over the world.\43\ In addition, VoIP technology
allows consumers to enjoy high-quality phone calls with people on the
other side of the planet for an affordable price.\44\ With this
efficiency came other changes: instead of a voice path between one wire
pair, the call travels as data; identifying information can be spoofed;
many different players are involved in the path of a single call; and
the distance between the endpoints is not particularly important.\45\
As a result, it is not only much cheaper to blast out robocalls; it is
also easier to hide one's identity when doing so.
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\42\ Herrman, Tr. at 60-61; Maxson, Tr. at 96.
\43\ Schulzrinne, Tr. at 22.
\44\ See, e.g., Bellovin, Tr. at 16-17.
\45\ Id. at 17.
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1. New Technologies Have Made Robocalls Extremely Inexpensive
Until recently, telemarketing required significant capital
investment in specialized hardware and labor.\46\ Now, robocallers
benefit from automated dialing technology, inexpensive long distance
calling rates, and the ability to move internationally and employ cheap
labor.\47\ The only necessary equipment is a computer connected to the
Internet.\48\ The result is that law-breaking telemarketers can place
robocalls for less than one cent per minute.\49\ In addition, the
cheap, widely available technology has resulted in a proliferation of
entities available to perform any portion of the telemarketing process,
including generating leads, placing automated calls, gathering
consumers' personal information, selling the products, or doing all of
the above.\50\ Because of the dramatic decrease in upfront capital
investment and overall cost, robocallers--like e-mail spammers--can
make a profit even if their success rate is very low.\51\
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\46\ Herrmann, Tr. at 58-59; Schulzrinne, Tr. at 24.
\47\ Schulzrinne, Tr. at 24.
\48\ Herrmann, Tr. at 59-61.
\49\ See Dan Weber, Alan Basinger, Dean Willis, and David Schwartz,
Public Comment, cmt #565017-00014, at 3.
\50\ Schulzrinne, Tr. at 20-21; Maxson, Tr. at 95-98.
\51\ Schulzrinne, Tr. at 21; Bellovin, Tr. at 16-17.
Technology enables a cheap and scalable model for robocalls.
2. New Technologies Have Made It Easier for Robocallers to Hide
Technological changes have also affected the marketplace by
enabling telemarketers to conceal their identities when they place
calls. First, direct connections do not exist between every pair of
carriers, so intermediate carriers are necessary to connect the
majority of calls. Thus, the typical call now takes a complex path,
traversing the networks of multiple different VoIP and legacy carriers
before reaching the end user.\52\ Each of these carriers knows which
carrier passed a particular phone call onto its network, but likely
knows little else about the origin of the call.\53\ Such a path makes
it cumbersome to trace back to a call's inception.\54\ All too often,
this process to trace the call fails completely because one of the
carriers in the chain has not retained the records that would further
an investigation.\55\
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\52\ Panagia, Tr. at 130-32; Bellovin, Tr. at 17.
\53\ Panagia, Tr. at. 132; Maxson, Tr. at 100.
\54\ Schulzrinne, Tr. at 24-25; Maxson, Tr. at 100; Bash, Tr. at
104.
\55\ Panagia, Tr. at 160-61; see also id. at 132-133; Schulzrinne,
Tr. at 21.
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Second, new technologies allow callers to manipulate the caller ID
information that appears with an incoming phone call.\56\ This ``caller
ID spoofing'' has beneficial uses; legitimate companies adjust their
caller ID information regularly so that customers will see the most
useful corporate number or name, rather than the phone number from
which an agent actually placed the call.\57\ However, the same
functionality allows robocallers to deceive consumers by pretending to
be an entity with a local phone number or a trusted institution such as
a bank or government agency.\58\ In addition, robocallers can change
their phone numbers frequently in an attempt to avoid detection.\59\ It
is generally illegal to transmit misleading or inaccurate caller
identification information with the intent to defraud, cause harm, or
wrongfully obtain anything of value, but many robocallers flagrantly
violate this law.\60\
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\56\ Schulzrinne, Tr. at 24-26.
\57\ See, e.g., Panagia, Tr. at 129.
\58\ Schulzrinne, Tr. at 21-22.
\59\ Id. at 24-26; Maxson, Tr. at 97; Bash, Tr. at 103.
\60\ See Truth in Caller ID Act, 47 U.S.C.Sec. 227(e); cf. 16
C.F.R. Part 310.4(a)(8) (the Telemarketing Sales Rule requires that
sellers and telemarketers transmit or cause to be transmitted the
telephone number and, when made available by the telemarketer's
carrier, the name of the telemarketer, to any caller identification
service in use by a recipient of a telemarketing call, or transmit the
customer service number of the seller on whose behalf the call is made
and, when made available by the telemarketer's seller, the name of the
seller. Under this provision, it is not necessary to prove intent to
defraud.).
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Finally, new technologies help robocallers operate outside the
jurisdiction where they are most likely to face prosecution.\61\
Indeed, all of the many different entities involved in the path of a
robocall can be located in different countries, making investigations
even more challenging.
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\61\ Schulzrinne, Tr. at 21; Bellovin, Tr. at 16-17.
The path of a robocall can span the entire globe.
B. Need to Stimulate Technological Solutions
The Commission recognized the need to spur the marketplace into
developing technical solutions that could help American consumers block
illegal robocalls. Thus, at the conclusion of the Robocall Summit, the
FTC announced its first public contest, a ``Robocall Challenge'' hosted
on the challenge.gov platform, with a $50,000 prize for the individual
or small team that could propose a technological solution to help
consumers block robocalls on their landlines and mobile phones. The
Commission also offered a separate award for the best solution by an
organization with ten or more employees, which did not have a cash
prize.\62\
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\62\ The judges for the Challenge were FTC Chief Technologist Steve
Bellovin, FCC Chief Technology Officer Henning Schulzrinne, and co-
Executive Editor of All Things Digital Kara Swisher. The basic judging
criteria were: Does it work? (50 percent); Is it easy to use? (25
percent); and Can it be rolled out? (25 percent). For details, see FTC
Robocall Challenge Criteria Details, http://www.robocall.challenge.gov/
details/criteria.
---------------------------------------------------------------------------
The FTC received an astounding 798 eligible submissions, many of
which were extremely well-considered technical proposals that moved the
ball forward. As a result of the Robocall Challenge, a wide array of
people with the necessary technical expertise spent countless hours
thinking about these issues. All of the winning proposals were
submitted by people who had never previously worked on the specific
problem of illegal robocalls. In addition, the Robocall Challenge
received an overwhelming amount of public attention and interest,
helping the FTC spread the word about illegal robocalls and what
consumers can do to fight them.
The primary goal of the Robocall Challenge was encouraging
development of realistic ideas for decreasing the prevalence of
telemarketing robocalls in a way that the FTC's traditional law
enforcement efforts could not achieve alone. On April 2, 2013, the
agency announced three winning solutions, which all contained promising
ideas about how to address difficult realities such as the limitations
of the telecommunications infrastructure and the prevalence of caller
ID spoofing.\63\ As the winning contestants and others further develop
their ideas for introduction into the marketplace, we expect positive
results for American consumers.
---------------------------------------------------------------------------
\63\ See Press Release, FTC Announces Robocall Challenge Winners;
Proposals Would Use Call Filter Software to Reduce Illegal Calls (Apr.
2, 2013), available at http://www.ftc.gov/opa/2013/04/robocall.shtm;
Appendix B, Summary of Winning Robocall Challenge Submissions.
---------------------------------------------------------------------------
III. Consumer Education
Public education is an equally essential tool in the FTC's consumer
protection and fraud prevention work. The Commission's education and
outreach program reaches tens of millions of people a year through our
website, the media, and partner organizations that disseminate consumer
information on the agency's behalf.
The FTC delivers actionable, practical, plain language information
on dozens of issues. Indeed, the Commission uses law enforcement
announcements as opportunities to remind consumers how to recognize a
similar situation and report it to the FTC. In the case of robocalls,
whether the offer involves fraudulent credit card services, so-called
auto warranty protection plans, or bogus vacation travel packages, the
FTC's message to consumers is simple: If you answer a call and hear a
recorded sales message--and you haven't given your written permission
to get calls from the company on the other end--hang up. Period. Other
key self-help messages to consumers include how to place a phone number
on the Do Not Call Registry, what to consider before asking a phone
carrier to block calls, and how and where to report illegal robocalls.
The FTC's education materials also explain how robocallers use
technology to make thousands of calls at minimal cost, send fake caller
ID information, and conceal their locations. The FTC disseminates these
tips through articles,\64\ blog posts,\65\ social media,\66\
infographics,\67\ videos \68\ and audio.\69\
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\64\ See, e.g., FTC Robocall Microsite, http://
www.consumer.ftc.gov/features/feature-0025-robocalls.
\65\ See, e.g., FTC Consumer Information Blog, http://
www.consumer.ftc.gov/blog.
\66\ See, e.g., FTC Robocalls Facebook Q&A Transcript (July 17,
2012), http://www.ftc.gov/opa/socialmedia/facebookchats/
1207ftcrobocallsfb.pdf.
\67\ See, e.g., FTC Robocalls Infographic, http://www.ftc.gov/bcp/
edu/microsites/robocalls/infographic.shtm.
\68\ See, e.g., FTC Video and Media, http://www.consumer.ftc.gov/
media.
\69\ See, e.g., FTC Consumer Information Audio, ``Hang Up on
Robocalls,'' http://www.consumer.ftc.gov/media/audio-0045-hang-
robocalls.
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The FTC updates its consumer education whenever it has new
information to share. The Commission's library of articles on robocall
scams in English and Spanish also includes pieces specifically
describing credit card interest rate reduction scams, auto service
contract and warranty fraud, and travel-related schemes.\70\ When
Robocall Challenge participants submitted to the Commission techniques
they were using to successfully reduce illegal robocalls, the GSA and
FTC used these tips in a video that relays some of the best consumer
suggestions about what works today to fight robocalls.\71\
---------------------------------------------------------------------------
\70\ See FTC Consumer Information, ``Travel Tips'' (May 2013),
http://www.consumer.ftc.gov/articles/0046-travel-tips; FTC Consumer
Information, ``Auto Service Contracts and Warranties'' (Aug. 2012),
http://www.consumer.ftc.gov/articles/0054-auto-service-contracts-and-
warranties; FTC Consumer Information, ``Credit Card Interest Rate
Reduction Scams'' (Feb. 2011), http://www.consumer.ftc.gov/articles/
0131-credit-card-interest-rate-reduction-scams; see generally FTC
Robocall Microsite, http://www.consumer.ftc.gov/features/feature-0025-
robocalls; FTC Robocall Microsite in Spanish, ``Llamadas automaticas
pregrabadas o robocalls,'' http://www.consumidor.ftc.gov/destacado/
destacado-s0025-llamadas-automaticas-pre-grabadas-o-robocalls.
\71\ Robocall Challenge: Consumer Tips & Tricks (Apr. 2, 2013),
http://www.consumer.ftc.gov/media/video-0086-robocall-challenge-
consumer-tips-tricks.
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The Robocall Challenge expanded the reach of the Commission's
consumer education messages about robocalls by spurring tremendous
media interest. The announcement of the Challenge in October 2012
prompted a nationwide flurry of articles and television stories.\72\
When the agency announced the winners in April 2013, it again made
headlines in national news outlets and technology publications, also
reaching a television audience of an estimated 2.2 million viewers in
the first 24 hours following the announcement.\73\ Stories explained
the problem of illegal robocalls and the FTC's determination to block
them from landlines and mobile phones nationwide.
---------------------------------------------------------------------------
\72\ See, e.g., Craig Timberg, Find a way to block ``robo-calls''
and win $50K from the FTC, Wash. Post, Oct. 18, 2012, available at
http://www.washingtonpost.com/business/economy/find-a-way-to-block-
robocalls-and-win-50k-from-the-ftc/2012/10/18/a2d648c6-1943-11e2-aa6f-
3b636fecb829_story.html; Trevor Mogg, Wanna be a national hero? FTC
contest offers $50,000 prize for solution to end annoying robocalls,
Digital Trends, Aug. 18, 2012, available at http://
www.digitaltrends.com/cool-tech/ftc-contest-offers-50000-prize-for-
solution-to-end-annoying-robocalls; NBC Bay Area, FTC Holding Anti-Robo
Call Contest, Oct. 20, 2012, available at http://www.nbcbayarea.com/
news/local/FTC-Holding-Anti-Robo-Call-Contest-175078991.html.
\73\ See, e.g., Edward Wyatt, 2 Deterrents to Robocalls Win Contest
by FTC, N.Y. Times, Apr. 2, 2013, available at http://www.nytimes.com/
2013/04/03/technology/two-deterrents-to-robocalls-win-ftc-contest.html;
Jon Brodkin, No more robocalls: New tech automatically hangs up on
robots, Ars Technica, Apr. 2, 2013, available at http://
arstechnica.com/information-technology/2013/04/no-more-robocalls-new-
tech-automatically-hangs-up-on-robots; Cristin Dorgelo, ``Innovative
Solutions to Fight Illegal Robocalls,'' Apr. 17, 2013, http://
www.whitehouse.gov/blog/2013/04/17/innovative-solutions-fight-illegal-
robocalls.
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IV. Next Steps and Conclusion
The 10-year old Do Not Call Registry remains enormously successful
in protecting consumers against unsolicited calls from legitimate
telemarketers. But as technology changes and fraudsters exploit those
changes, we must remain agile and creative. The Commission will
continue its multifaceted efforts to fight illegal robocalls, including
but not limited to the following actions:
Continue Aggressive Law Enforcement
We will maintain our enforcement efforts, in
coordination with state, federal, and international
partners, to target high-volume offenders and pursue
robocall gatekeepers in order to stop the largest number of
illegal calls.
We will work with the telecommunications industry,
encouraging carriers to be proactive in monitoring for
illegal robocalls and securing the information necessary
for prosecutions.
Spur Innovation
We will work with industry leaders and other experts
to further stimulate the development of technological
solutions to block illegal robocalls.
We will continue to encourage industry-wide
coordination to create and deploy VoIP standards that
incorporate robust authentication capabilities.\74\ Such
coordination is the only way to ensure a future phone
system with accurate and truthful calling information.
---------------------------------------------------------------------------
\74\ This process will require active planning and cooperation in
the coming months and years, as we move away from the legacy
telecommunications infrastructure and toward a VoIP-based system.
Experts around the world, including those involved in the Internet
Engineering Task Force (``IETF''), have already begun to explore the
technical changes necessary to permit authentication of VoIP calls. In
fact, the IETF is in the process of creating a working group about this
very topic called ``STIR''--Secure Telephone Identity Revisited.
Participants in the FTC Robocall Summit also mentioned the Alliance for
Telecommunications Industry Solutions as the type of standard-setting
group that might assist in organizing the necessary collaboration.
Schulzrinne, Tr. at 167; see also Rupy, Tr. at 51, 67; Diggs, Tr. at
68-69; Whitt, Tr. at 208-09; see generally Paula Bailey-Stine, Public
Comment, cmt #565017-00022, at 3-5.
---------------------------------------------------------------------------
Engage in Ongoing Consumer Education
We will continue our broad outreach to consumers
regarding the Do Not Call Registry as well as illegal
robocalls and how best to fight them.
Work with Congress
We stand ready to assist in your efforts to protect
consumers.
Thank you for the opportunity to share some of the highlights
regarding the FTC's battle against illegal robocalls. We look forward
to working with you on this important issue.
Appendix A
National Do Not Call Registry Active Registrations and Complaint
Figures
Appendix B
Summary of Winning Robocall Challenge Submissions
Appendix B (Con't)
Senator McCaskill. Thank you very much, Ms. Greisman. Sorry
I mispronounced your name at the beginning.
Mr. Bash?
STATEMENT OF ERIC J. BASH, ASSOCIATE CHIEF,
ENFORCEMENT BUREAU,
FEDERAL COMMUNICATIONS COMMISSION
Mr. Bash. Good morning, Chairman McCaskill and Ranking
Member Heller. I am Eric Bash, Associate Chief of the Federal
Communications Commission's Enforcement Bureau. Thank you for
the opportunity to appear before you today.
Almost every American has personal experience with
robocalls, and almost everyone is fed up with them. With our
own six-figure volume of complaints last year, we hear you.
So what exactly is a robocall at the FCC? What makes one
illegal under our rules? What are we doing about them? And how
could enforcement be enhanced?
At the FCC, we use the term ``robocalls'' to refer not to
just prerecorded calls but also autodialed calls, regardless of
whether the call is live or prerecorded. Under FCC rules, these
calls cannot be made to a number assigned to emergency
telephone lines, lines in guest rooms in health-care
facilities, or wireless devices except in two cases: one, for
an emergency purpose; or, two, with the prior express consent
of the called party. That means that robocalls generally cannot
be made to wireless devices or the other restricted lines I
mentioned, even for a noncommercial purpose.
Prerecorded calls to residential landlines are subject to
fewer limitations, but only a few less. Prerecorded calls to
residential lines can be made for non-emergency purposes
without the called party's consent, but only if the call is
made, one, for a noncommercial purpose or, two, for a
commercial but not telemarketing purpose or, three, by certain
defined persons to deliver a health-care message or, four, by
or for a nonprofit organization. Any otherwise permissible
robocall must also include certain identifying disclosures to
be legal.
The FCC also recently adopted rules to create a special do-
not-call list for lines answered by public safety answering
points and is prohibiting all autodialed calls to numbers
registered on that list.
As you know, the FCC shares responsibility at the Federal
level with the Federal Trade Commission for enforcement against
telemarketing calls, including telemarketing robocalls. The
agencies maintain consistency between their rules pursuant to
statute and a memorandum of understanding. Both agencies' rules
prohibit making prerecorded telemarketing calls to any
telephone number, mobile or residential, except with the
express prior written consent of the called party.
Congress has empowered the FCC to enforce the
Communications Act in several ways. The tool the agency uses
most is assessment of a monetary forfeiture. Under the
Communications Act, the FCC may not impose such a forfeiture on
a non-licensee, meaning someone other than broadcasters or
carriers, for example, until it first issues a citation to the
wrongdoer for an illegal act and the wrongdoer thereafter
repeats the same kind of misconduct. The maximum penalty for
non-licensees is generally $16,000 or about one-tenth the
amount of that for carrier licensees.
Over the last decade, the FCC has issued more than 500
citations and taken approximately 10 forfeiture-related actions
involving millions of dollars of penalties for robocall rule
violations.
Our two most recent robocall actions cited operators of
platforms that, according to our investigations, made almost 6
million impermissible robocalls to mobile phones in just
several months. The operators offered a service to call the
phone numbers provided by their clients, to deliver the
prerecorded message provided by their clients, and to display
on consumers' caller ID the telephone numbers provided by their
clients.
By focusing on these operators, rather than their
individual clients, we hope to maximize the impact of our
existing enforcement resources. Numerous other platform
providers remain under investigation.
Significant law enforcement challenges remain, however. A
fundamental problem is identifying the wrongdoer. Robocallers
often spoof the number from which they are calling, so
inquiries to carriers that control the numbers displayed to the
consumers may not yield useful identifying information.
Investigators must therefore work backward, subpoenaing the
called parties' carrier and, in turn, all intermediate carriers
to find out where the call originated.
Time is of the essence because some providers do not appear
to keep relevant records for much time and because the FCC must
initiate any forfeiture proceeding within 1 year of a
violation.
There are several ways in which the FCC's enforcement tools
might be enhanced. Congress might, for example, consider
changing the FCC's authority by, one, allowing the FCC to
impose a forfeiture on non-licensee robocaller violators
without first issuing a citation; two, expanding the current
statute of limitations from 1 year to 2; and, three, increasing
the maximum forfeiture that the FCC can impose on non-licensee
robocallers.
To address the spoofing that complicates law enforcement,
Congress might also consider extending the scope of the
prohibition in the Truth in Caller ID Act against changing
caller ID for harmful purposes to apply to offshore callers and
more VOIP providers than just those who originate and terminate
traffic on the public switched telephone network. Congress
might also consider giving the FCC regulatory authority over
third-party spoofing providers.
There are also technological ideas on the table that may
afford additional consumer protections from illegal robocalls.
The FTC-sponsored contest helped to identify some of these
ideas, and an industry standards organization is working with
FCC technical staff on still more ideas.
Thank you for the opportunity to appear before you today,
and I welcome any questions you may have.
[The prepared statement of Mr. Bash follows:]
Prepared Statement of Eric J. Bash, Associate Chief, Enforcement
Bureau, Federal Communications Commission
Good morning Chairman McCaskill, Ranking Member Heller, and Members
of the Subcommittee. My name is Eric Bash, and I am an Associate Chief
in the Enforcement Bureau of the Federal Communications Commission
(FCC.) My responsibilities include oversight of the agency's
enforcement of provisions in the Communications Act and the FCC's rules
that are designed to protect consumers of telecommunications services.
These provisions and rules include restrictions against ``robocalls,''
which is a popular shorthand way for to calls made using a prerecorded
message or using an autodialer, whether the message is live or
recorded. Thank you for the opportunity to appear today to address the
FCC's role in combatting these calls.
Almost every American is familiar with robocalls from their own
personal experience. Who, for example, hasn't answered a phone call at
one time or another, only to hear a recorded message encouraging the
called party to ``press 1'' to claim a free vacation? Or to redeem a
``last chance'' to lower mortgage rates? Or to extend an auto warranty?
There are certainly legitimate robocalls--such as those consumers want,
for example, to alert them to changes in school schedules--but most of
these calls, at best, annoy consumers, and at worst, trick them into
fraudulent transactions.
At the FCC, we are also aware of, and take very seriously, the
problem of robocallers making huge volumes of calls, either
simultaneously or in rapid succession, to multiple lines at the same
place of business, in order to overwhelm it. When these robocalls
target first responders or hospitals telephone lines, they can threaten
to interfere with legitimate calls that, if left unanswered, may
literally mean the difference between life and death.
The prevalence of these types of robocalls is on the rise. This is
because of the ready availability and low cost of phone service and the
software needed to make the calls, as well as the ability of callers to
``spoof'' the number from which they are calling in an attempt to
disguise who they are and avoid detection. It is no surprise, then,
that robocalls are an increasing source of consumer complaints in
recent years at the FCC, with the number of complaints about the topic
doubling in the past two years to over 100,000 filed in 2012. While
this is only a fraction of the total number of robocall complaints
filed each year at various agencies, the volume at the FCC alone still
speaks volumes, so to speak, about the extent of the problem. The FCC
is also hearing more and more from first responders who are victims of
sporadic autodialing.
I have been asked to address you this morning to explain the FCC's
role in combatting illegal robocalls. In doing so, I think it would be
helpful first to describe the applicable law that Congress has charged
the FCC with enforcing. I will then turn to the enforcement powers and
process that Congress has given the FCC to discharge its
responsibilities, and highlight some recent actions the agency has
taken. I will close my prepared remarks by identifying some enforcement
challenges we face in combatting illegal robocalls, and how we might
begin to overcome them. I will also explain how the Federal Trade
Commission's authority in this area complements the FCC's.
FCC-Enforced Legal Standards
So what makes a robocall illegal under FCC-enforced standards? It
depends upon the kind of number called, and the purpose of the call.
The FCC's rules in this area flow directly from the Telephone Consumer
Protection Act of 1991, or TCPA.
Restricted Lines. Under the FCC's rules, no telephone call can be
made using an autodialer or an artificial or prerecorded voice to
certain ``restricted lines'' for non-emergency purposes without the
called party's prior express consent. These ``restricted lines'' are
emergency telephone lines (such as 911 lines), lines in guest/patient
rooms in health care facilities, and all numbers assigned to mobile
devices. Note that this restriction applies not just to calls with an
artificial or prerecorded voice, but also to live calls made with an
autodialer. For telemarketing calls, the prior express consent will
have to be in writing after October 16, 2013.
In this day and age of heavy mobile phone use, it may be worth
repeating that the FCC's rules flatly prohibit all autodialed or
prerecorded calls to mobile phones made for a non-emergency purpose
without the called party's permission. It does not matter whether the
call is to persuade the called party to buy some thing or to support
some cause. And, despite common mischaracterizations of the law, it
does not matter whether the called party is charged for the call, or
whether the content of a message is blasted by text or voice. (The FCC
has been clear that ``autodialed'' text messages fit within the
restriction.) What matters is that a robocall was placed to a mobile
phone, for a non-emergency purpose without the called party's consent.
Robocallers can ensure that they are complying with this restriction by
scrubbing their call lists against the telephone numbers that several
commercial services offer to identify those assigned to mobile
telephones.
Residential Lines. Like calls made to restricted lines, calls using
an artificial or prerecorded voice can be lawfully initiated to a
residential line for an emergency purpose or with the called party's
prior express consent, and, for telemarketing calls, the prior express
consent will have to be in writing after October 16, 2013. But calls
using an artificial or prerecorded voice can also be lawfully initiated
to residential lines under several other circumstances. Such calls may
be made if they contain certain disclosures and: (1) the call is made
for a non-commercial purpose; or (2) the call is made for a commercial
purpose but does not constitute telemarketing; or (3) the call delivers
a health care message and is made by certain defined persons; or (4)
the call is made by or for a tax-exempt non-profit organization. The
disclosures must identify, at the beginning of the call, the person or
entity responsible for initiating the call, and, during or after the
message, provide a telephone number where that person or entity can be
reached. And it is important to note that the restrictions for
residential lines apply only to calls using prerecorded messages, not
those using an autodialer.
PSAP Lines. Pursuant to legislation passed last year, the FCC has
also adopted rules that will create a special do-not-call registry for
lines answered by public safety answering points (PSAPs), and has
prohibited autodialed calls to numbers registered on that list. The
legislation was designed to address the situation of autodialers
placing calls to telephone numbers associated with emergency lines, and
thereby precluding legitimate emergency-related calls from coming
through. Note that this restriction applies to all autodialed calls,
whether live or prerecorded.
FCC Enforcement Process
Congress has empowered the FCC to enforce the Communications Act,
including the TCPA, and the agency's implementing rules and orders, in
several ways. In designating the FCC as the Federal agency that
licenses and regulates those involved in electronic communication by
wire or radio, Congress created different enforcement mechanisms that
vary in terms of availability and severity according to whether the
wrongdoer holds (or should hold) a license from the FCC.
For licensees, such as broadcasters and carriers, the FCC's most
powerful tool to enforce compliance with the law is to revoke a license
for non-compliance, or deny issuance or renewal of the license. Because
obtaining or retaining an FCC license may literally mean the difference
between economic life and death for a licensee, the FCC does not resort
to this remedy except in the most egregious cases of noncompliance.
The FCC more commonly enforces the Communications Act, including
the TCPA, and its implementing rules and orders by imposing monetary
penalties. To do so, the FCC must either conduct a hearing, or issue a
notice of apparent liability for forfeiture, or NAL. For administrative
efficiency and other reasons, the agency most frequently follows the
latter approach. A party subject to an NAL has an opportunity to submit
factual and legal arguments in response explaining why the forfeiture
proposed should be canceled or reduced. The FCC evaluates the response,
and assuming it concludes that a forfeiture of some amount should be
assessed, issues a final order imposing the penalty. If further legal
action is necessary to collect the penalty, the FCC must refer the
matter to the U.S. Department of Justice. While the FCC may impose a
forfeiture either through a hearing or an NAL against both licensees
and non-licensees, the Communications Act distinguishes between these
groups, both in terms of process required and the severity of the
penalty permitted. For non-licensees, under current law, generally
speaking the FCC may impose a maximum penalty of $16,000 per violation,
but may do so only after first issuing a citation to the wrongdoer
finding that it has engaged in an illegal act, and, subsequent to the
citation, the wrongdoer again engages in violations of the same type.
By contrast, for carriers, which operate under express authorization
from the FCC, the agency may impose a forfeiture of up to $150,000 per
violation, without first citing the carrier. Likewise, broadcasters,
which operate pursuant to an FCC license, generally speaking are
directly subject to forfeitures of $37,500 per violation, without a
prior citation. (These forfeiture amounts are those generally
applicable for violations of the Communications Act, including
violations of TCPA. Note that Congress has adopted other penalty
structures in certain other circumstances.)
The Communications Act also authorizes the FCC to issue an order to
cease and desist against anyone violating a law it enforces; the Act
envisions a trial-type administrative hearing in order to invoke this
remedy. The Communications Act also authorizes the Department of
Justice to obtain an injunction on behalf of the FCC.
FCC Enforcement Actions
Using these enforcement powers, in the last decade, the FCC has
issued more than 500 citations, and taken approximately 10 penalty-
related actions involving around $3.5 million, for violations of its
robocall rules. (These are in addition to more than 500 citations and
approximately 20 penalty-related actions for do-not-call telemarketing
violations.) The FCC also issued an Enforcement Advisory last fall, as
the election season was in full swing, to remind campaigns and those
making calls on their behalf of the rules of the road for making
robocalls. It is worth reiterating, as this advisory suggests, that the
sweep of our rules is broad; they address not just telemarketing
robocalls, but all robocalls, including political robocalls and
robocalls to ``restricted lines'' without the called party's
permission.
I want to highlight the FCC Enforcement Bureau's two most recent
robocall enforcement actions, taken just a few months ago. These
reflect a change in approach designed to enhance the effectiveness and
efficiency of agency enforcement in this area. Instead of targeting a
single enterprise or individual behind a single type of robocall, the
Bureau cited operators of platforms that make prerecorded calls in
violation of the robocall rules. These operators offered a service
whereby third-party clients could transmit or upload to the operator
for delivery to specified called parties, along with the telephone
numbers to which the operator was to place the calls. They could also
choose the phone number that they wished the platform to display to the
called party. The investigations leading to these citations found that
the operators had made nearly six million impermissible robocalls in
just several months. By addressing the platforms that make the illegal
calls, as opposed to focusing on end-users behind such calls, we expect
to cast a wider net and more efficiently use our limited resources to
multiply the impact of our enforcement efforts. While I cannot comment
on pending law enforcement matters where we have not yet taken a public
action, I can say that these platforms remain an area of emphasis. I
also want to add that, while the express language of the TCPA disallows
``making'' prerecorded calls under the circumstances that were the
subject of our platform citations, and unambiguously outlaws platforms
from ``making'' calls like those I have described, the FCC recently
issued a ruling to re-emphasize that anyone who makes a call on behalf
of a third party is liable for violations of FCC rules implementing the
TCPA. The third party on whose behalf an illegal call is made may also
be vicariously liable for the violation.
Law Enforcement Challenges
Notwithstanding the actions the FCC and others have taken over the
last decade, significant challenges remain to stopping illegal
robocalls, especially from those attempting to entice the called party
to engage in a fraudulent transaction.
Identification of Perpetrator. A fundamental problem for law
enforcement in dealing with fraudulent as well as other robocallers
remains identifying the parties responsible for them. Consumer
complaints filed with the FCC about robocalls ordinarily provide little
more information than the names used by callers, and the telephone
numbers displayed on the called parties' caller ID, because this is
normally all the data available to the complainant. But these pieces of
information are not sufficient to enable prompt enforcement action if
the robocaller has used a fake and nondescript name, and ``spoofs'' the
number from which it is calling--that is, presents on the called
party's caller ID a number other than the one from which the robocaller
is actually calling. In these circumstances, subpoenas issued to the
carrier that controls the apparent originating number may not yield
identifying information. As a result, investigators must work backward
and subpoena the called party's carrier for information about where
that carrier obtained the call. Because multiple carriers may be
involved in handling a single call, investigators may need to repeat
this process a number of times before they can identify the true
originator of a given call. Time is of the essence, as carriers
maintain this kind of call detail record only for limited periods of
time, and because the FCC is required by law to act within a year of a
violation if it intends to impose a forfeiture penalty. As a result,
the FCC is exploring ways to streamline the subpoena process with
carriers.
FCC Enforcement Options. Entities that or individuals who do not
hold a Commission authorization and are not required to have one pose
particular enforcement challenges. As I have noted, while we may cite a
wrongdoer, finding that its conduct violates the law, we may not impose
a monetary penalty directly. And while citations may work reasonably
well for those who are unknowingly or negligently violating the
regulatory and statutory provisions on robocalls, we believe a more
immediate and tangible penalty may be needed to cause those who are
intentionally violating the law to bring their conduct into compliance.
Swift, stern enforcement powers are especially needed against
fraudulent robocallers who use different names, change addresses
frequently, and appear to open and close businesses on a regular basis.
Law enforcement is also complicated, of course, when the robocaller
appears to be physically located outside of the United States.
Federal Trade Commission
As Members of this Subcommittee know, the FCC shares enforcement
responsibility at the Federal level with the Federal Trade Commission
(FTC) for combatting telemarketing calls, including telemarketing
robocalls. The agencies maintain consistency between their
telemarketing rules pursuant to the Do-Not-Call Implementation Act of
2003. Thus, with respect to robocall rules in particular, both
agencies' rules will, as of October 16, 2013, prohibit making
prerecorded telemarketing calls, except with the prior express written
consent of the called party. This consent is in addition to, and
distinct from, registering a phone number on the national do-not-call
list.
To coordinate the exercise of their joint responsibilities in the
telemarketing area, the FCC and the FTC also entered into a
longstanding Memorandum of Understanding. Under the MOU, the agencies
have agreed to, among other things, meet at regular intervals to
discuss matters of mutual interest, to share complaints regarding
potential violations of Federal telemarketing rules, and to work
together to implement consistent and non-redundant enforcement of such
rules. In fact, Ms. Greisman and I met with our agencies' respective
staff just last week for law enforcement coordination purposes.
One particular way the agencies have coordinated enforcement in the
telemarketing area is by each agency focusing on the areas where its
enforcement tools are best suited to the misconduct at issue. For
example, the FCC's authorization over carriers provides a very powerful
means of pursuing and remedying violations involving them. (While the
FCC has not yet taken any action against a carrier for robocall
violations, it has for do-not-call violations.) Moreover, our
regulatory expertise with carriers gives us a familiarity with their
processes that is uniquely helpful to us in obtaining the information
we need to pursue robocall violations. The FTC, on the other hand,
possesses particular advantages in discouraging robocall activity in
connection with its efforts to thwart the fraudulent activity that
often underlies robocalls. The FTC's ability to bring suit against non-
licensee miscreants, freeze assets and obtain restraining orders based
on fraudulent activity can be quite effective in discouraging robocall
behavior, although it is also quite resource intensive.
Overcoming Enforcement Challenges and Further Protecting Consumers
To maximize the FCC's enforcement impact, Congress might consider
making certain changes to the FCC's powers. For example, Congress might
consider:
allowing the FCC to impose a forfeiture on non-licensee
robocall violators without first having to issue a citation;
expanding the current statute of limitation from one year to
at least two years, given the frequent need to engage in the
time-consuming process of identifying callers by working
backwards through a chain of carriers; and
increasing the maximum forfeiture that the FCC can impose on
non-licensee robocallers.
Congress might also consider revising the Truth-in-Caller-ID Act of
2010. This statute prohibits spoofing when done by persons in the
United States with the intent to defraud or cause harm or wrongfully
obtain anything of value. When the FCC adopted implementing rules
approximately two years ago, the agency's Chairman sent a report to
Congress with proposed additional changes to the statute, including:
expanding the scope of the prohibition to apply to persons
outside of the United States when their spoofing is directed at
people inside the United States;
clarifying whether the existing restrictions should apply to
Voice over Internet Protocol providers that enable only
outbound calls; and
giving the FCC appropriate authority to regulate third-party
spoofing services.
As the report explained, the Department of Justice has advocated
that third-party spoofing providers should be required to verify that a
user has authority to use the telephone number it is seeking to have
substituted for its own, in order to make it easier to identify actors
who use these services for fraudulent or other harmful purposes.
Technological solutions that empower consumers to block illegal
robocalls so that they do not receive them in the first instance may
also be helpful in thwarting illegal robocalls. An industry standards
organization is currently working with FCC technology staff to design a
system whereby originating carriers would cryptographically sign calls,
so that receiving carriers can validate that callers in fact have the
right to use the number they are using; as more carriers implement such
solutions, methods could be developed to protect consumers from calls
where the number cannot be validated. The staff involved hope that the
joint effort may lead to implementable specifications in about a year.
Other ideas about technical solutions were presented at the FTC's
robocall summit last fall, as well as in the FTC's contest that closed
just a few months ago.
As legal changes and technological solutions are being considered,
the FCC, along with the FTC and others, must continue to educate
consumers about how to protect themselves from illegal robocalls, and
when they receive them, how to file the most useful complaint with law
enforcement. Such education includes discouraging consumers from
interacting with any of the prompts in a robocall, and making sure that
their complaints include as much information as possible, including the
exact time and date of the call they received, and the carrier to whose
service they subscribe. The FCC's website has its own consumer
education materials, complaint forms, and cross-references useful
material provided by the FTC.
Conclusion
Thank you again for the opportunity to appear before you today to
explain the FCC's role in addressing illegal robocalls. I welcome any
questions you have for me.
Senator McCaskill. Thank you both.
Well, let me start with you, Mr. Bash. Do the statutes that
guide your enforcement in this area, do they provide for the
possibility of prison?
Mr. Bash. They do not.
Senator McCaskill. OK.
And how about anything that you can do on your end at the
FTC?
Ms. Greisman. We do not have criminal law enforcement
authority, but we work regularly with the Department of Justice
and criminal authorities at the state level.
Senator McCaskill. Is there an applicable statute that you
can utilize at the Federal level that provides prison for
people who do this?
Ms. Greisman. Not on the part of the Federal Trade
Commission.
Senator McCaskill. Yes. Well, so nobody has gone to jail,
right?
Ms. Greisman. There have been criminal prosecutions of
individuals who have been sued by the Federal Trade Commission
for engaging in illegal robocalling in civil cases. The
criminal prosecutions, I believe, have focused on allegations
of wire fraud.
Senator McCaskill. OK. And so the wire fraud prosecutions
that have taken place in the area dealing with robocalls, has
anybody gone to prison? Do you know?
Ms. Greisman. Yes, I believe there have been significant
sentences.
Senator McCaskill. OK. Well, we need to get that word out.
It seems to me that, you know, these guys aren't really afraid
of you. I don't think that they are very nervous at all.
Because it seems to me that they are just all in at this point.
They have the technology to do massive amounts of calls for
literally scraps off the table, with great potential of payoff.
I mean, this is a criminal sandbox, and I can't imagine a more
fun place to hang out if you are somebody who is a criminal.
And I think we need to look at that also.
Would some additional criminal statutes help you, Mr. Bash?
Mr. Bash. I think additional legislation like that could be
useful. The FCC, like the FTC, is not a criminal law
enforcement agency, so I don't think we would be taking the
actions ourselves there. But certainly----
Senator McCaskill. I guarantee you that criminal
prosecutions in this area would be way more popular than just
about anything else the Department of Justice does.
Mr. Bash. I am sure they would be.
Senator McCaskill. What about the folks that are processing
the payments on this? Do you feel like you have adequate
statutes to go after them and put them in prison?
Because somebody is moving this money through
electronically, and they are making money off of it. And they
have to know that this is not mom and apple pie that is being
sold here, that they are making money off of.
I know that we have had some actions against the payment
processors. Are these companies that we would recognize that
are processing these payments?
Ms. Greisman. The Federal Trade Commission has taken action
against payment processors for well over 10 years. The most
recent ones were brought under the Telemarketing Sales Rule.
They are alleged to have assisted and facilitated the illegal
robocaller. And we have a burden of proof of showing that there
is some level of knowledge there.
I think, you know, there are two scenarios. There are those
who facilitate fraud who are completely in cahoots with the
fraudster; they know exactly what is going on. And then there
are those who either do know or consciously avoid knowing. And,
you know, it is just going to turn on the facts.
But it is not necessarily the case that those who
facilitate fraud, gatekeepers or chokepoints, are completely in
bed with the fraudsters. They maybe avoid knowing what is going
on.
Senator McCaskill. Well, yes, but they are not hard to
catch. Because if you set them up, if they are trying to avoid
knowing, 9 times out of 10 if you send somebody in under cover
to say the appropriate things, they are going to say something
in reply that makes it clear that they are trying to--it is a
little bit like the guy driving the getaway car: ``Well, I had
no idea he was in there robbing the bank. You can't hold me
liable.'' Well, under criminal law, we can.
Ms. Greisman. You are right. And you are absolutely----
Senator McCaskill. And this is, they are driving the
getaway car.
Ms. Greisman. Yes, they are facilitating the illegal----
Senator McCaskill. Are these companies that we would
recognize that are processing these payments? Are these, you
know, the mainstream payment processors that process my
payments to iTunes or my payments to Amazon? Are they the same
people?
Ms. Greisman. I am not sure that any of the ones that the
FTC has sued of late are necessarily recognizable names. But we
certainly will be looking across the industry to see whether
there are any entities who facilitate----
Senator McCaskill. That is reassuring that you are looking.
And I certainly wasn't trying to make any allegation against
those companies, that they are involved in this. I am just, you
know--obviously, we are processing a lot of payments
electronically these days. And there are recognized, reputable
companies, and then there are others. And I am just assuming
that this is all in the others'' space.
Ms. Greisman. We look at each case as we see it----
Senator McCaskill. OK.
Ms. Greisman.--and we see who is involved.
Senator McCaskill. Let me finish up, and then I will give
it to Senator Heller.
On the caller ID spoof, I have been asking my family to
keep track of calls. And, in fact, I have gotten a few. I have
learned something very important. If you ask for a phone
number, they hang up. They are all trained that if you ask them
for a phone number, they immediately hang up, because they know
there is not a good ending there. So they just move on to the
next call--if you have somebody live on the other end.
I also have learned from my family members that they are
using fraudulent caller ID numbers, that if you are getting a
call in Saint Louis or if you are getting a call in Kansas
City, the area code that they are using is, in fact, a state
area code even though the call is being generated from far
away, many times not even in this country.
Can we go after the companies that are providing these
numbers that clearly are not the numbers they are calling from?
Mr. Bash. The folks who are providing the false number?
Senator McCaskill. Yes.
Mr. Bash. So let me get at that a couple of different ways.
Under the robocall rules, it is really the legal standard
is the person who is making the call, who is initiating the
call. That is who is responsible under our law for a violation.
There is, as I mentioned, the Truth in Caller ID Act that
prohibits spoofing caller information with an intent to defraud
or cause harm or wrongfully obtain anything of value. And if
the folks that you are referring to would satisfy that
standard, those are people that we could pursue.
Senator McCaskill. Well, why would you give a false--why
would you provide a number that is not really the number they
are using for--what kind of good could there be?
I mean, I am trying to figure out, I am trying to think
about arguing a case to a jury in a criminal courtroom. Under
what possible scenario would somebody be providing a phony
caller ID number that wasn't up to something nefarious?
Mr. Bash. Examples that are mentioned in the context of the
rulemaking that the FCC did to implement these rules involved
calls coming from a battered women's shelter. A call might need
to be made out by someone who is living there to check on her
children, and she is needing to protect the actual number from
which she is calling.
Senator McCaskill. And the blocked number is not sufficient
in those instances? You can't just block the number so people
can't see what it is?
Mr. Bash. The example I gave you is what we have pointed to
and what folks refer to as legitimate uses of spoofing caller
ID.
Senator McCaskill. In the grand scheme of things, I can't
imagine that that is not just a tiny, infinitesimal number of
these that are being given out.
And I would certainly like--we are going to ask you to do
some follow-up on this. But one of the follow-ups I would ask
you to look at is, what do we need to do to strengthen the laws
to go after the people that are providing these phony numbers?
Because that is a huge part of the problem.
Mr. Bash. And just to add to that, one of the suggestions
that our former chairman made in submitting a report to
Congress on potential changes to the Truth in Caller ID Act was
to give the FCC direct regulatory authority over so-called
third-party spoofing providers. These are people who are
providing a service to people to spoof numbers.
Senator McCaskill. Thank you very much.
Senator Heller?
Senator Heller. Thank you. And thanks again, Madam
Chairman, for holding this hearing, and for our witnesses, for
your testimony. Appreciate that.
I would be surprised if there is anybody here in this room
that hasn't at one time or another been subject to a
telemarketing call. And I would submit that I have. That second
recording that you did on extended warranties on vehicles,
every time my vehicle gets to be about 4 or 5 years old, I get
that phone call. And when you ask follow-up questions, they
usually hang up on you when they find out that they can't
deceive you.
And in most cases, the deception practice is that you are
thinking that you are talking to the original maker of that
vehicle, whether that is a GM product, Ford product, or Nissan
product. You think you are talking to that company. You know,
at least they give off that perception. Then you find out that
they are not associated with that organization.
So I thought that was a great example of the type of
deception that we hear and see all the time.
Mr. Bash, you did a great job in your testimony of coming
up with overcoming some of the enforcement challenges that you
guys face.
And I was wondering, Ms. Greisman, if you have other ways.
What can we do here in Congress to help allow you to have more
authority? Do you need more authority? I am going to ask the
next panel, of course, the same question. But what do you need?
What kind of enforcement challenges do you face that you need
to overcome that Congress could help you with?
Ms. Greisman. Well, I dare mention the common carrier
exemption. We do think it is more than a relic. The commission
is on record for the past several years in support of its
elimination, and I certainly share that view.
Senator Heller. OK. OK.
I want to clarify the numbers. You know, you have testified
a little bit, both of you, a little bit on the numbers, the
challenges that you are faced with.
Can you quantify the cost of this problem, both in the
numbers of calls that people are receiving today and the cost?
I know the chairman mentioned some costs. Just so that
everybody here and those that are viewing this have an idea how
big this problem is.
Ms. Greisman. Sure. First, with respect to the numbers, we
know that through our law enforcement action we have halted
literally billions of illegal robocalls. And we know that from
the cases we have brought.
We also know that from the cases that have concluded in the
robocall and do-not-call area that courts have ordered, I think
it is, $740 million in redress or disgorgement. That, of
course, is court-ordered. So that is at least a baseline for
the scope of the magnitude of the economic injury being caused
by this.
Senator Heller. Do you agree with those numbers, Mr. Bash?
Mr. Bash. Yes. And I just want to reiterate what I said in
my testimony, that the two most recent actions that we took,
just the particular months that we were looking at, for our
enforcement actions, these two operators had placed
approximately 6 million calls in just several months.
Senator Heller. How many individuals in your office do you
dedicate to enforcement of no calls, telemarketing scams like
this?
Mr. Bash. In the Enforcement Bureau, we have a handful of
lawyers that are dedicated to dealing with this particular
problem. On the policy side, our Consumer and Governmental
Affairs Bureau works to implement the rules and change the
rules as needed per any action you may take on Capitol Hill or
to harmonize our rules with those of the Federal Trade
Commission.
Senator Heller. Is there a bureau within the FCC
specifically dedicated to telemarketing fraud?
Mr. Bash. There is not one that is specifically dedicated
to that.
Senator Heller. How about the FTC?
Ms. Greisman. At the Federal Trade Commission,
telemarketing rule enforcement, combating telemarketing fraud
is something that is engaged in throughout the bureau. It is,
as I mentioned before, a top priority.
Senator Heller. Right.
Ms. Greisman. And it is not just the bureau at
headquarters. Every regional office is involved in the fight
against illegal telemarketing. The shop that I head is the
manager/coordinator, if you will, of the telemarketing fraud
enforcement program.
Senator Heller. Thank you. I will preserve questions for
later.
Senator McCaskill. Thank you.
Let me ask just a couple more things.
I want to make sure that it is clear how technology is
changing this landscape. I think everyone has figured out that
Congress is not nimble and we do not move quickly, and clearly
we are behind the eight ball in many areas as it relates to
technology.
And both of the agencies you work for have a very difficult
job, because you are trying to get everyone to hold hands and
sing ``Kumbaya'' when there are competing commercial interests
and just competing interests because of advancing technology.
This is an area where most average Missourians don't
understand why there is a different set of rules for the phone
that rings in their house and the phone that rings in their
purse. They don't understand why you can take action against a
political campaign that calls the phone in the purse but you
can't take action against the political campaign that calls in
the family room when you are eating dinner.
And so would you explain why there would be these different
rules? And try, if you can--I have a hard time with figuring
out--I know it all boils down to wired versus wireless, and in
the old days when everyone was paying by the minute as opposed
to the vast majority of plans now that are not--well, there are
still plans that pay by the minute.
But, you know, I don't think people--and then you have
VoIP, which is, of course, the new method of phone calls that
is not the common carriers but it is a wire nonetheless at some
point. And where do they fall in this? And why should these
rules all be different?
Ms. Greisman. I will take a stab and then turn it over to
Mr. Bash.
From the FTC's perspective, it doesn't matter where the
call rings. It doesn't matter whether it is at your home
landline or in a device in your car, on your cell, wherever you
are. It makes no difference; the telemarketing sales rule
applies equally. And it doesn't matter whether it is coming
over a copper wire or through the Internet.
With respect to the charitable calls that you mentioned,
the FTC does not have jurisdiction over those bone fide
charitable fundraising calls. We are able to reach for-profit
telemarketers who place calls on behalf of bona fide charities,
however.
Senator McCaskill. Right. So the people that call me that
pretend that they are really helping the sheriffs and they are
really taking 90 cents on the dollar and giving the sheriffs 10
cents, can you go after them?
Ms. Greisman. We can, and we have.
Senator McCaskill. OK.
Mr. Bash. So, as you heard me testify this morning, our
rules do make a distinction between wireless phones and
residential landlines. And the distinctions that our rules make
flow directly from the Telephone Consumer Protection Act of
1991.
Senator McCaskill. That is obviously up-to-date.
[Laughter.]
Mr. Bash. Maybe you will revisit that. But that is why our
rules make the distinction that they do. The statutory language
is really quite prescriptive, so our rules just track what the
legislative distinctions in the law are.
And, as Lois was saying, with respect to VoIP, that is not
really germane to the issue, because what matters is who is
calling. It doesn't matter whether they are calling over VoIP
or they are calling over a traditional telephone line. If you
are making a call under the circumstances that are not legal,
then it is impermissible.
Senator McCaskill. I think we have to really take a look at
updating all of this so that, you know--there is a whole
generation that is going to be very blessed by the fact that
they can't get political robocalls, because none of my kids
have landlines. And, you know, they were really glad last
October in Missouri, because it was ugly out there.
But the elderly that are still answering that landline
every day--I had a hard time. I felt like I needed this when I
would go out in public, because everybody was so mad about
these stupid political robocalls.
Let me just finally ask your thoughts--it seems to me that
you are playing Whac-A-Mole. And you are playing Whac-A-Mole
with people that many times are in foreign countries, and the
long arm of the law is really, really difficult in these
circumstances, especially since they can make a lot of money
and shut down fairly quickly and move on. And your limited
tools in law enforcement do not allow you to be as quick as
they are, in terms of being able to get to them before they
have shut down and moved on to another location or another IP
address.
Talk a little bit about the technological solution. And
what are the barriers that are in this country for--I mean, I
know, I look at the technology that is available. I marvel at
what I can do on this little, bitty box. I can run my life,
literally, with this little, bitty box.
It is so hard for me to believe that there is not the
technology available yet in America that we can control this
without the government having a great deal of involvement, just
through a technological answer.
And if you could speak to that briefly before we hear from
our second panel, unless Senator Heller has more questions.
Ms. Greisman. I would be happy to start.
It is precisely because we felt there would be a
technological solution that we launched the challenge. And the
goal was to spur innovation, to tap into the genius of American
consumers to develop ideas.
And I think it was enormously successful. There were three
winners. But it is not just those three winners who submitted
proposals that might go to market; there are others out there.
And I think you will be very encouraged when you hear from Mr.
Foss on the second panel.
Senator McCaskill. Great.
Senator Heller?
Senator Heller. Thank you.
Mr. Bash, you talked a little bit about where these calls
originate from. And I was wondering if you have any
quantitative numbers of whether most of these robocalls are
coming domestically or they are coming from foreign sources.
Mr. Bash. I don't think I have data to give you on that. I
think that----
Senator Heller. Do you have a feel for it?
Mr. Bash. I don't want to go out on a limb for that.
Senator Heller. OK.
Mr. Bash. But I think it is fair to say that they are
coming from both places.
Senator Heller. OK.
Mr. Bash. They are coming from both places.
Senator Heller. All right.
Ms. Greisman, you talked about enforcement challenges. And
one of the things, of course, that you asked for is to abolish
the common carrier exemption. And, of course, that would
protect carriers from dual regulations by both the FCC and the
FTC.
I guess my question to you is, is there any evidence or
allegations that these common carriers are the source of these
calls?
Ms. Greisman. Let me address that this way. From where we
sit, we think common carriers can do two things. One is they
can be more proactive in looking at what is going across their
transom and flagging what probably are red flags.
We have some concerns that there may be some carriers out
there--and remember, there is a real blurred distinction, given
convergence in technology, of what is a telemarketer and what
is actually a carrier. But we think there is some conduct that
may be engaged in by some entities that purport to be carriers
that would do more than raise an eyebrow.
Senator Heller. OK. OK. I will probably ask the next panel
the same question.
Mr. Bash. If I could add----
Senator Heller. Please.
Mr. Bash.--on that subject, as I have mentioned in my
written testimony, we obviously work with the Federal Trade
Commission in coordinating law enforcement. And Lois and I,
actually, just last week met on various coordination issues and
issues with respect to carriers that she is aware of. She has
made us aware of them, and we are certainly going to be looking
at some of the information that was shared with us.
Senator Heller. Terrific.
Thank you for your time. I want to thank both witnesses for
being here.
And, Chairman, thank you very much.
Senator McCaskill. Thank you.
I am just curious, what is the conduct that raises the
eyebrow? If you can tell us.
Ms. Greisman. It is too soon at this point to get into.
Senator McCaskill. OK.
Ms. Greisman. Thank you.
Senator McCaskill. I will be waiting.
[Laughter.]
Senator McCaskill. Thank you both.
And if the next panel would come forward.
I want to thank this panel. We have Mr. Kevin Rupy, Senior
Director of Law and Policy, United States Telecom Association;
Mr. Michael Altschul--am I saying that correctly?
Mr. Altschul. Yes, you are. Thank you.
Senator McCaskill.--Altschul, Senior Vice President and
General Counsel at CTIA--The Wireless Association; Mr. Matthew
Stein, Chief Technology Officer from Primus
Telecommunications--welcome; thank you for being here--and Mr.
Aaron Foss, Freelance Software Developer, Nomorobo.
Thank you, Mr. Foss. We are glad you are here.
And we will begin with your testimony, Mr. Rupy.
STATEMENT OF KEVIN RUPY, SENIOR DIRECTOR, LAW AND POLICY,
UNITED STATES TELECOM ASSOCIATION
Mr. Rupy. Chairwoman McCaskill, Ranking Member Heller,
thank you for giving me the opportunity to appear before you
today. My name is Kevin Rupy, and I serve as Senior Director of
Law and Policy at the United States Telecom Association.
U.S. Telecom and our member companies share the
Subcommittee's concern about the problems associated with
illegal robocalls. We understand the consumer frustration they
cause, and we have long worked and coordinated with relevant
private and government stakeholders to address this issue.
In addition to the harm they cause consumers, robocalls
impact U.S. Telecom's own member companies. Our companies'
customer service representatives represent the first line of
defense on this issue. They must be well-versed in explaining
to customers the difference between legal and illegal
robocalls, providing them with information on how to file a
complaint with the FTC, and pointing them to tools to help them
mitigate these calls.
Robocalls can also adversely impact our companies'
networks. Mass-calling events are typically highly localized,
high-volume, extremely brief, lasting only a matter of minutes.
And carriers receive no advance warning of these calls. A
severe mass-calling event can result in service degradation and
disruptions to phone services in a provider's impacted area.
Moreover, illegal robocalls exacerbate an already troubling
problem in our industry known as phantom traffic: calls that
evade the established intercarrier compensation regime.
Given these impacts on both our customers and our networks,
we can sympathize with the frustration you must feel at the
apparent growth of this problem over the last 2 decades in
spite of repeated legislative efforts to put an end to it.
Those efforts illustrate the difficulty of keeping the law
ahead of the lawbreakers and ahead of technology.
This is not to say that network operators are passive
observers. As mentioned earlier, we serve on the front lines of
defense and work in many other ways to monitor, mitigate, and
respond to this problem. Many U.S. Telecom member companies
maintain network operations centers that monitor network
traffic, conduct traffic data forensics, and initiate mass-
calling investigations.
Our members provide and will continue to develop various
services, such as anonymous-call blocking, and other
functionalities that help mitigate the problem. Network
operators also work within standards-setting groups to address
issues related to robocalls.
Carriers initiate legal actions against robocallers when
they can be found and coordinate with state and Federal law
enforcement agencies during ongoing investigations and
enforcement actions.
Looked at through the lens of history, the explanation for
this is regrettably fairly simple. The original phone network
was a closed system, meaning that voice service was generally
provided by local exchange carriers and long-distance companies
through only the public switched telephone network, or PSTN,
providing plain old telephone service.
Today's communications services are provided not by the
historical closed PSTN but by a network of networks. The
interdependent, interconnected, and global nature of the
Internet means that areas of vulnerability exist throughout the
network and, therefore, cannot be realistically addressed by
any single stakeholder.
U.S. Telecom supports the development of possible
technological solutions to the robocall problem by stakeholders
throughout the Internet ecosystem, most of whom do not face the
significant legal limitations outlined in my written statement
that currently constrain our member companies.
But it is unlikely that any single technological silver
bullet can permanently address the robocall problem. Today's
solution could very well turn into tomorrow's Maginot Line and
could have unintended adverse consequences, some examples of
which I also outline in my written testimony.
The same increasingly appears to be the case for
legislative and regulatory solutions, which regrettably do not
seem capable of keeping pace with the evil genius of scammers,
who continually invent new ways of evading discovery and
capture, much less prosecution and punishment.
In closing, let me again thank the Subcommittee for holding
this timely hearing. We share both the Subcommittee's and
consumers' frustration, and we look forward to our continued
work together in a manner that provides flexibility in
addressing this constantly evolving challenge.
[The prepared statement of Mr. Rupy follows:]
Prepared Statement of Kevin Rupy, Senior Director, Law and Policy,
United States Telecom Association
Chairwoman McCaskill, Ranking Member Heller, Members of the
Subcommittee, thank you for giving me the opportunity to appear before
you today to present the views of our industry on the burgeoning
problem of robocalling. It is both timely and appropriate that the
Subcommittee take time to review this important consumer protection
issue. The United States Telecom Association (USTelecom) and our member
companies are aware of the growing problem associated with illegal
robocalls. We understand the consumer frustration they cause, and as a
result we have long worked collectively and coordinated with relevant
private and government stakeholders to address this issue.
My name is Kevin Rupy, and I serve as Senior Director of Law and
Policy at USTelecom. Our association represents innovative broadband
companies ranging from some of the largest companies in the U.S.
economy to some of the smallest cooperatives and family-owned telecom
providers in rural America. Our members offer a wide range of
communications services on both a fixed and mobile basis, and the
overwhelming majority of them offer advanced broadband services
including voice, video, and data. The customers that rely on our
networks include consumers, businesses large and small, and government
entities at the local, state, and Federal levels.
Robocalls are a Problem for Consumers and Providers of Voice Services
USTelecom's member companies are all too aware of the increasing
consumer frustration attributable to robocalls. Probably all of us in
this room have experienced such calls. They are intrusive and
disruptive. That's bad enough. But through some calls' deceptive
pitching of phony products and services such as debt reduction programs
and mortgage modification scams, the criminals behind these calls are
stealing money from unsuspecting consumers. Just last month, the FTC
filed a complaint against one robocaller targeting current and former
U.S. military members.
In addition to the harm they cause to consumers, robocalls impact
USTelecom's own member companies. Often, the first call a consumer will
make following a robocall incident is to the phone company. Our member
companies' customer service representatives represent the first line of
defense on this issue, and must be well versed in explaining to
customers the difference between legal and illegal robocalls, pointing
them to tools available to help them mitigate these calls and providing
them with information on how to file a complaint with the FTC.
Robocalls can also adversely impact our companies' networks. Mass-
calling events are typically highly localized, tremendously high
volume, and extremely brief--lasting only a matter of minutes. And
providers receive no advance warning of these calls. A severe mass-
calling event can result in service degradation and disruptions to
phone services in a provider's impacted area. Moreover, illegal
robocalls exacerbate an already troubling economic problem in our
industry because they can often be associated with ``phantom
traffic''--calls largely originating outside our companies' local
calling areas for which a terminating access charge will never be paid
by the long-distance carrier because the necessary call identification
information has been stripped.
What Are Robocalls and Why Have They Proliferated?
The proliferation of robocalls has resulted from three major
changes in the communications marketplace. The global reach of the
Internet, combined with the widespread availability of mass-calling
technology and a dramatic reduction in the costs of long-distance
service, have radically changed the capabilities and economics of
robocalling. As former FTC Chairman Jon Leibowitz stated at last
October's FTC-sponsored robocall workshop, the Internet has allowed
``voice blasting technology to flourish at bargain basement prices.''
Looked at through the lens of history, we can sympathize with the
frustration you must feel at the apparent growth of this problem over
the last two decades in spite of repeated legislative efforts to put an
end to it. Those efforts illustrate the difficulty of keeping the law
ahead of the law-breakers--and ahead of technology. The Federal Trade
Commission (FTC), over which this Subcommittee has jurisdiction, was
specifically directed under the Telemarketing and Consumer Fraud and
Abuse Prevention Act of 1994 to adopt rules prohibiting deceptive and
abusive telemarketing acts or practices, including ``unsolicited
telephone calls which the reasonable consumer would consider coercive
or abusive of such consumer's right to privacy.'' The body of
regulations adopted by the FTC to implement this 1994 Act is known as
the Telemarketing Sales Rule. The FTC is also empowered generally to
address unfair or deceptive acts or practices in or affecting commerce,
which the Federal Trade Commission Act declares unlawful. But the FTC's
jurisdiction does not extend to common carriers, which are subject to
the regulatory authority of the Federal Communications Commission
(FCC). And for reasons described below pertaining to both our common
carrier and privacy obligations, our member companies must complete
phone calls.
Viewed from the perspective of communications law, when Congress
adopted the Telephone Consumer Protection Act of 1991 (TCPA) to address
telemarketing robocalls, its major purposes were to protect the privacy
and public safety interests of telephone subscribers by placing
restrictions on automatic dialers, fax machines, and unsolicited
automated calls. The TCPA amended Title II of the Communications Act of
1934 to add a new section 227, entitled ``Restrictions on the Use of
Telephone Equipment.'' The nature of the technology being used in 1991
is well-illustrated by a consumer complaint listed among several
examples in this Committee's report accompanying the bill (S. Rept.
102-178): ``the automated calls filled the entire tape of an answering
machine, preventing other callers from leaving messages.'' Except for
amendments to expand the reach of section 227 to offshore callers and
to prohibit caller-ID spoofing, the robocall provisions of the law
remain largely as they were enacted in 1991--and, as we all know, they
have become increasingly ineffective.
The explanation for this is, regrettably, fairly simple. The
original phone network was a ``closed'' system, meaning that voice
services were generally provided by local exchange carriers and long
distance companies through only the public switched telephone network
(PSTN). These companies were providing what is called ``plain old
telephone service,'' or POTS. When Congress passed the TCPA in 1991 to
address robocalls, autodialing systems, and certain fax machine
problems, and even when it acted again three years later to deal with
unsolicited telemarketing calls, wireless communication was only
beginning to emerge and even dial-up Internet access was not yet a
reality for mass consumer use. In contrast to the situation that
confronted Congress in the early 1990s, today's communications services
are provided not by the historical closed PSTN but by a ``network of
networks.'' *
---------------------------------------------------------------------------
\*\ To put this in further perspective, the first website was
created in 1991--the year of the TCPA's enactment. Today, there are
more than 30 trillion individual web pages.
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As a result, voice service is now available from a myriad of
companies with a diverse technical heritage. We still have the PSTN,
but we also have Voice over Internet Protocol (VoIP) providers,
Internet service providers, and cable companies offering ``phone''
service, right alongside competitive local exchange carriers and
wireless carriers. Approximately 40 percent of U.S. households have
``cut the cord'' and rely entirely on wireless for their voice service.
And by the end of 2013, USTelecom estimates that more than 52 percent
of wireline households will subscribe to interconnected VoIP,
oftentimes provided by the local cable company. Finally, ``over-the-
top'' VoIP services--which use existing broadband networks--are widely
available to American consumers and are offered by some of the
country's most prominent companies, including Vonage, Google Voice, and
Microsoft's Skype service. Skype, for example, disclosed to the
Securities and Exchange Commission in August 2010 that the company had
20 million connected users in the United States, 1.9 million of whom
were paying customers.
Regardless of their delivery platform, each of these voice
providers must ultimately connect to the PSTN because the reliability
of their service to their own customers depends on their ability to
deliver any call to anywhere. As a result, ``phone'' calls can connect
to anyone, anywhere, regardless of whether a consumer's phone is
connected to the PSTN, or their wireline or wireless phone or computer
is connected to a broadband network. But this same remarkable
connectivity--a connectivity we celebrate and want to expand to those
Americans who don't yet enjoy it--also makes it possible for
robocalling con artists and fraudsters to set up shop virtually
anywhere in the country or even the world and, with the right equipment
and a few clicks of the mouse, begin auto-dialing unsuspecting and
vulnerable consumers across the United States.
The Contextual Nature of Robocalls--What the Consumer Sees
Now that we understand the network framework under which robocalls
operate, it is important to understand the various types of robocalls.
It can be helpful to consider all mass calling and robocall events as a
traffic signal, comprised of green, yellow, and red lights. Robocalls
that are important and legal would fall into the ``green'' category;
robocalls that are legal, but whose usefulness are a matter of
subjective personal opinion, would fall into the ``yellow'' category;
and malicious and illegal robocalls would fall into the ``red''
category.
So, for example, a consumer may receive a ``green'' robocall from
his or her child's school, stating that the school's opening will be
delayed due to bad weather. Similarly, public safety agencies will
often use robocalls to provide critical public safety messages. For
example, Los Angeles County has implemented an emergency mass
notification system used by the County's Emergency Operations Center to
notify residents and businesses of emergencies or critical situations
and provide information regarding necessary actions, such as
evacuations due to wildfires. Because the system uses geomapping,
emergency notifications can be directed to very specific geographic
areas. Clearly, robocalls of this type would fall into the ``green''
category.
Robocalls falling on the ``yellow'' spectrum are also legal,
although some recipients might be indifferent to their messages or
might prefer not to receive them. A doctor's office may use a robocall
to remind a patient of an upcoming appointment. Similarly, political
candidates and political groups will often use robocalls to solicit
votes in an upcoming election, or to deliver an advocacy message.
Finally, there are the instances of illegal calls falling into the
``red'' category of calling events. These calls include the infamous
``Rachel from Card Services,'' as well as other bogus schemes selling
everything from cruises to insurance. Robocallers are becoming
increasingly creative in perpetrating their scams, many of which
originate from beyond our Nation's borders.
The traffic from a robocaller directed toward a consumer on the
PSTN can transit the network either over the Internet, or through the
PSTN itself. In fact, it is usually the case that a typical mass-
calling event will transit multiple networks--encompassing both the
PSTN and the Internet--before finally reaching the consumer.
The Contextual Nature of Robocalls--What the Service Provider Sees
Consumers are the only ones who can ultimately determine the nature
of any specific robocall. Service providers, conversely, have no
visibility into the specific nature or type of robocall transiting
their network. They have no way of determining whether the call is
illegal or legal. The service provider may only see that a mass calling
event is taking place at a specific point on their network.
From the service provider's perspective, these mass calling events
are defined by four characteristics. First, they are highly localized
in nature. Second, they are represented by a high volume of calls.
Third, once the calls arrive at their intended local target, they are
extremely brief--potentially only lasting a matter of seconds or
minutes. Finally, there is no advance warning for these calls.
Adding further complexity to the robocall issue is the problem of
caller-ID spoofing--misrepresenting one's identity using a deceptive
caller-ID. Although, after the fact, providers have investigative
techniques that can positively identify whether a call has been spoofed
or not, there is no way for a carrier to make that determination in
real time, as the call is transiting the network.
Significant Legal Constraints Limit Potential Robocall Deterrents
Two primary legal issues face USTelecom's member companies with
respect to remedying the robocall problem. First, under existing laws
to which USTelecom's members are subject for their provision of legacy
voice service, phone companies have a legal obligation to complete
phone calls. These companies may not block or otherwise prevent phone
calls from transiting their networks or completing such calls. The
current legal framework simply does not allow our companies to decide
for the consumer which calls should be allowed to go through and which
should be blocked.
Second, there are substantial privacy issues that arise in any
discussion relating to proposed robocall solutions. Robocalls are
extremely contextual in nature. Depending on the nature of the call,
certain robocalls are permitted under the law, while others are
prohibited. Proposed solutions to the robocall dilemma that seek to
make phone service providers the arbiter of whether a call should--or
should not--be permitted to proceed skirt dangerously close to
violating the privacy obligations imposed on us by law. For example,
the Wiretap Act (also known as Title I of the Electronic Communications
Privacy Act (ECPA) or Title III of the Omnibus Crime Control and Safe
Streets Act of 1968) expressly protects wire, oral, and electronic
communications while in transit and establishes that service providers
are permitted to intercept those communications only as a necessary
incident to the rendition of service or to the protection of the rights
or property of the provider. Similarly, except as authorized by ECPA,
section 705 of the Communications Act of 1934 makes it a crime for any
person ``to intercept and divulge or publish the contents of wire and
radio communications''--a provision not limited solely to common
carriers.
The Practical Realities of Technological and Legislative Solutions
The interdependent, interconnected, and global nature of the
Internet means that areas of vulnerability exist throughout the
network, and therefore cannot be realistically addressed by any single
stakeholder. Given the rapid and ever-changing nature of the robocall
problem, it is highly unlikely that a technological ``silver bullet''
can be developed as a permanent solution. Much in the same way that
remediation efforts in areas such as spam or cybersecurity must
continually evolve, the same can be expected for robocalls.
Robocalls, like their brethren in the area of spam, phishing, and
cybersecurity is a constantly evolving problem. USTelecom supports the
development of possible technological solutions to the robocall problem
by stakeholders throughout the Internet ecosystem, most of whom are not
constrained by the significant legal limitations currently facing our
members. But members of this Subcommittee need to be aware that no
single solution will permanently address the robocall problem. Today's
solution could very well turn into tomorrow's Maginot Line, and could
have unintended adverse consequences.
For example, solutions that rely extensively on blocking calls
populated by a blacklist could very well result in the blocking of
legitimate calls from callers whose own phone numbers have been
illegally spoofed. Conversely, solutions implementing call blocking
features based upon a whitelist could potentially block an important--
albeit unexpected--message from a legitimate caller. Even more
perversely, the availability of spoofing technology can easily fool
consumers into taking calls they should avoid. For example, spoofing
the number of the local municipal hospital could dupe a senior citizen
into believing that a fraudulent effort to sell phony medical products
is actually a legitimate call from a whitelisted number. Given the open
nature of the broadband network, technological solutions can be--and
often are--superseded by technological countermeasures.
The same increasingly appears to be the case for legislative and
regulatory solutions, which regrettably do not seem capable of keeping
pace with the evil genius of scammers who continually invent new ways
of evading discovery and capture, much less prosecution and punishment.
As noted earlier, we have been trying to legislate out of existence the
problems of robocalling, spam, autodialing, and caller-ID spoofing for
as long as two decades, but new technologies only seem to make the
problems grow worse.
Addressing Robocalling Requires A Multi-Pronged Approach
This is not to say that carriers are passive observers to the
robocall problem. USTelecom's member companies work on multiple fronts
in order to monitor, mitigate, and respond to mass-calling events. For
example, many USTelecom member companies maintain network operations
centers (NOCs), which include 24-hour security desks that monitor
network traffic, respond to consumer complaints, conduct traffic data
forensics, and initiate mass calling investigations.
In addition, carriers are providing--and will continue to develop--
various services consumers can use to help mitigate the robocall
problem. These services include basic caller-ID functionality, as well
as conditional call-forwarding and anonymous call-blocking. Because the
offerings and capabilities of companies are different, consumers are
always encouraged to contact their respective service provider in order
to identify available resources.
Network operators also work within the framework of various
standards setting groups, the best example of which is the Alliance for
Telecommunications Industry Solutions (ATIS). ATIS is a standards
organization that develops technical and operational standards for the
communications industry, including standards related to the handling of
mass-calling events. In addition, several USTelecom member companies
are members of the Communications Fraud Control Association (CFCA).
CFCA's membership consists of approximately 200 different carriers,
private network owners, end users, law enforcement officers, and others
from around the world. Through these public-private partnerships,
industry stakeholders work together to identify best practices and
solutions to a broad range of telecommunications-related issues,
including robocalls.
Carriers will initiate legal actions against robocallers when they
can be found and coordinate with law enforcement agencies at the state
and Federal level during ongoing investigations and enforcement
actions. For example, in a 2010 FTC action against a robocaller that
allegedly made more than 370 million calls to consumers nationwide in a
single year, the agency specifically acknowledged the assistance that
both AT&T and Verizon provided in the investigation of the case.
Finally, the competition between our companies and other
communications platforms for consumer and enterprise business provides
incentives for all communications providers to innovate and to develop
new and more effective solutions to challenges such as robocalling.
This competition requires us to offer consumers the best possible
experience subject to what the law allows us to do, including taking
action to mitigate robocalling. If we do not offer effective solutions,
consumers will simply migrate to alternate technologies that offer
better ones.
In closing, let me again thank the Subcommittee for holding this
timely hearing. We share both the consumer's and Subcommittee's
frustration with the issue, and we look forward to our continued work
together in a manner that provides flexibility in addressing this
constantly evolving challenge.
Senator McCaskill. Thank you, Mr. Rupy.
And I am going to interrupt here for a moment. We have been
joined by Senator Pryor. And this is a subcommittee that really
has overlapping jurisdiction with Senator Pryor's subcommittee
on telecommunications. And so I would like to defer to him for
a moment.
If you would like to make any comments at this point,
Senator Pryor, before we continue with this panel, that would
be terrific.
Thank you for joining us today. Between Consumer Protection
and your committee--and I know you were the former chairman of
this subcommittee, so I really appreciate you cooperating with
us and allowing us to have this hearing even though we could
argue about the jurisdiction, which we do around here
sometimes, I have noticed.
[Laughter.]
STATEMENT OF HON. MARK PRYOR,
U.S. SENATOR FROM ARKANSAS
Senator Pryor. That is OK. No, I am thrilled that you are
chairing this subcommittee now. It is a great subcommittee, as
you know, great staff and a great team of people here. But
thank you.
Let me just say, we have a great leader in Chairwoman
McCaskill. She is going to do great things with this
subcommittee.
And these are very important issues that you are talking
about today. And we may have had some overlapping jurisdiction,
but I don't care, because I think that you are going to handle
this hearing just great. And I just want to say thank you for
your hard work, and I want to say thank you to all the
Subcommittee members.
You know, I look at the numbers; it is clear that the Do
Not Call Registry has been a success. And I am pleased that the
FTC is working with states to crack down on the individuals
with robocalls and other illegal activities.
So everybody is working together; we can solve this. So all
I want to say is thank you. And I didn't want to interrupt, but
thank you.
Senator McCaskill. Thank you, Senator Pryor.
Mr. Altschul?
STATEMENT OF MICHAEL F. ALTSCHUL,
SENIOR VICE PRESIDENT AND GENERAL COUNSEL,
CTIA--THE WIRELESS ASSOCIATION
Mr. Altschul. Good morning, Chairman McCaskill, Ranking
Member Heller, and Senator Pryor. On behalf of CTIA, thank you
for the opportunity to participate in this morning's hearing to
explore ways to protect consumers against unlawful robocalls
and SMS text messages.
CTIA was proud to support initial adoption of the Telephone
Consumer Protection Act back in 1991. In fact, I had just
joined the association; it was one of the first legislative
issues I worked on.
Like our customers, wireless carriers are also victims of
illegal text message phishing scams and robocall campaigns by
unscrupulous boiler-room operators seeking to sell extended car
warranties and the like that violate the protections in the
TCPA and other laws.
That is why CTIA has called on the FCC to change the way it
reports TCPA complaints, which, as you may know, are divided
into wireless complaints and wireline complaints. These
consumer complaints are about calls and messages that originate
outside of a carrier's network and control. And the way the FCC
reports them actually tends to hide the magnitude of the
problem in their reports.
CTIA and our member companies understand consumer annoyance
over these calls and repeatedly have pledged our full
cooperation to efforts by the FCC and the FTC to bring
enforcement actions against robocallers and fraudsters who
violate the TCPA.
In cases where they can locate and identify the source of
the messages, our carrier members have brought lawsuits against
the perpetrators. And the industry has cooperated with the FTC
and state attorneys generals in their investigation and
prosecution of these cases.
However, as you have heard from other witnesses, it is
virtually impossible to trace an interconnected VoIP call or an
over-the-top text message delivered to a wireless carrier from
the Internet, especially when the sender wants to disguise his
or her identity through the use of proxy servers and spoofed
caller ID.
I would like to use a screenshot of a text message that I
received on Monday to illustrate the difficulties we face in
trying to solve this problem.
And, by the way, wireless carriers do screen text messages
and successfully block millions of them, I believe, every day.
Voice calls have to be found at the source to be cut off.
As you can see, this text message appears to be an
informational text message about my account at a local
financial institution. In fact, I have provided my express
prior consent to the financial institutions where I have
accounts, authorizing them to send me informational text
message alerts about fraudulent activity, data breaches, and
other time-sensitive account information.
But since I do not have an account at this institution, I
knew immediately it was a phishing scam that violates both the
TCPA and the Truth in Caller ID Act, which prohibits the
spoofing of caller IDs. Scammers, especially those outside of
the United States, are not deterred from violating the TCPA or
the Caller ID Act.
For this phishing scam, the fraudster spoofed the caller ID
of a local Washington, D.C., phone number. As it turns out,
this number is not in service. It happens to be assigned and
arranged so that it is assigned to a CLEC. But I called it and
got a recording that the number is not service. So this is not
a real phone number assigned to a user.
But the fraudster could just as easily spoof the financial
institution's actual phone number or tumbled phone numbers
randomly to defeat the use of blacklists and whitelists. And
this is why this is such a difficult problem to solve. Carriers
do not know the businesses and public agencies the customer has
given express prior consent to send informational calls and
messages. And even if a carrier did know this information,
fraudsters can spoof whitelisted numbers and appear to be a
legitimate business sending informational calls and messages to
its customers.
We appreciate the efforts of the FTC and others who are
exploring technologies that may minimize the transmission of
illegal robocalls and text messages to our customers. However,
as H.L. Mencken famously observed, there is always a well-known
solution to every human problem neat, plausible, and wrong.
This wise counsel cautions us that any technical solutions must
be subject to careful and complete consideration.
So, on behalf of CTIA, thank you for your consideration of
these suggestions. We look forward to working with you to
address these and related matters as the Subcommittee moves
forward.
[The prepared statement of Mr. Altschul follows:]
Prepared Statement of Michael Altschul, General Counsel, CTIA--The
Wireless Association
Good morning Chairman McCaskill, Ranking Member Heller, and members
of the Subcommittee. On behalf of CTIA--The Wireless Association,
thank you for the opportunity to participate in this morning's hearing
to explore ways to protect consumers against unlawful robocalls.
Like our customers, wireless carriers are also victims of robocall
campaigns by unscrupulous ``boiler-room'' operators seeking to sell
extended car warranties and the like that violate the protections in
the Telephone Consumer Protection Act (TCPA). At CTIA, we and our
members understand consumer annoyance over these calls and repeatedly
have pledged our full cooperation to efforts by the FCC and the FTC to
bring enforcement action against these serial violators of the TCPA. In
cases where they can locate and identify the source of these messages,
our carrier members have vigorously brought suit against the
perpetrators, and the industry has cooperated with the FTC in its
investigation and prosecution of TCPA cases.
CTIA was proud to support initial adoption of the Telephone
Consumer Protection Act in 1991. At that time, there were roughly seven
million wireless subscribers in America, and nearly every wireless
subscriber also had a landline phone. Today, there are more than 326
million wireless subscriber connections in the United States, including
connections for advanced communications devices like smartphones and
tablets that access increasingly ubiquitous wireless broadband
services. The U.S. wireless industry now leads the world in delivering
next generation wireless services. Wireless has evolved from a niche
voice service to the primary source of broadband communications for
millions of Americans. Consumers' mass migration to wireless-only
service also is a testament to the attractiveness of wireless prices.
According to the Bureau of Labor Statistics' Wireless Price Index, the
effective monthly cost of wireless service to consumers has fallen more
than 40 percent since December 1997.
At the same time, because of the real reduction in the price of a
wireless call, the popularity of rates plans that offer ``buckets'' of
minutes and unlimited calling on nights and weekends, innovative
devices and applications, and the added convenience that wireless
offers to consumers who value personal and untethered communications, a
substantial portion of the population has moved or is moving to ``cut
the cord'' and rely completely on their wireless phones as their only
means of communication. Currently more than 35 percent of U.S.
households are ``wireless only'' for their voice service, and the
percentage is significantly higher in some regions and among certain
segments of the population.
Of particular significance for today's hearing, the continuing
trend to adoption of wireless service as the primary source of
communications for millions of Americans, and the changes that have
flowed from innovative rate plans and the greater affordability of
wireless service, justify a fresh look at the TCPA's treatment of pre-
recorded calls to mobile devices.
For instance, given the shift in the way consumers use their mobile
devices the TCPA's disparate treatment of informational calls that
depends upon whether a company is calling a wireline or wireless phone
number--or, increasingly, a number associated with an interconnected
VOIP provider that simultaneously forwards the call to a customer's
wireline and wireless numbers--is increasingly out of date. As
currently enacted, the TCPA requires the ``prior express consent'' of
the called party for even informational calls to wireless phones if the
calls are prerecorded or use an autodialer; non-commercial
informational calls to residential phones are not similarly restricted.
This disparity creates challenges for companies and government agencies
that want to provide legitimate informational calls to individuals who
are not reachable in any other way and who may value such calls to
receive timely information such as notification about a data breach,
fraud alert, change in flight time, or other time-sensitive account
information.
Even where a consumer has given prior express consent to one entity
to receive autodialed calls on her mobile device, that consent would
not apply to informational calls from other entities about that
purchase. For example, I may have given LL Bean consent to call me on
my cell phone when I ordered a new shirt, but that would not permit UPS
to notify me about scheduled delivery times. Similarly, I may have
given the auto dealership consent to call my cell phone when I
purchased my car, but that consent may not extend to the auto
manufacturer that wants to later call me about a safety recall.
A key adjustment to the TCPA that would help resolve this issue
would be clarification of the statutory definition of an ``automatic
telephone dialing system'' (ATDS), at least as it applies to delivery
of informational calls. The TCPA defines an ATDS as ``equipment which
has the capacity to store or produce telephone numbers to be called,
using a random or sequential number generator'' and the ability ``to
dial such numbers.'' The Federal Communications Commission and some
courts have interpreted this definition to include equipment that dials
numbers from a list of customer phone numbers that are neither random
nor sequential. The equipment simply aids the calling party by
automating the process of dialing these intentionally selected numbers.
This expansive interpretation potentially leaves wireless customers
unable to receive desirable informational messages, like a fraud alert
from their bank, while there remain no restrictions on sending the same
alert message to the dwindling number of consumers that maintain a
landline phone. A welcome clarification to the TCPA would allow use of
ATDS to send informational messages to wireless phones, so long as they
are not used to dial numbers sequentially or randomly.
Another outmoded aspect of TCPA implementation is the fact that the
Federal Communications Commission continues to catalog consumers' TCPA
reports as ``wireless complaints,'' suggesting they are complaints
about wireless service, when the complaints are in fact about
violations of the TCPA and FCC rules by telemarketers calling consumers
on their wireless phones. As I noted at the outset, wireless carriers
have taken numerous steps--including bringing lawsuits against
robocallers--to protect their customers against unlawful calling
campaigns. At CTIA, we understand consumer annoyance over these calls
and repeatedly have pledged our full cooperation to efforts by the FCC
and the FTC to bring enforcement action against these serial violators
of the TCPA.
Yet while wireless carriers are doing what they can to identify and
shut down TCPA violations, the FCC continues to misleadingly catalog
consumers' TCPA reports as ``wireless complaints.'' We believe it is
unfair for the FCC to continue to count TCPA complaints, which are
about calls that originate outside of the wireless network and have
nothing to do with wireless carriers' behavior, as ``wireless
complaints.'' The FCC's refusal to properly characterize these consumer
complaints significantly and misleadingly expands the apparent rate of
consumer complaints about wireless services. This is important since
absent inclusion of TCPA-related complaints, the total number of
complaints about wireless service received by the FCC has been
declining significantly, dropping from 12/1000ths of one percent of
industry subscribership in 2005 to slightly more than 7/1000ths of one
percent today. To ensure accurate reporting, we believe the FCC should
disaggregate TCPA data from its quarterly and annual wireless complaint
data and report it separately.
Let me turn now to the question of whether technical solutions can
help address the problem of unlawful robocalls. While the recent effort
by the FTC to use a contest to identify a technical solution that would
allow consumers to automatically screen and reject unwanted robocalls
produced some interesting proposals, the limited information available
to CTIA and the public about these proposals suggests the FTC and
others should approach implementation cautiously.
Each of the three winning entries in the contest, including one
submitted by two engineers at Google, relies on creation of a
``blacklist'' database of numbers identified as associated with
robocall spammers. All incoming calls to a consumer would be compared
with this database, with calls from blacklisted numbers blocked. The
database would also include a ``whitelist'' of numbers associated with
entities that have been identified as associated with ``legitimate''
callers. While there may be value to these solutions, they raise a
number of issues that would need to be resolved before any such system
can even be considered for implementation.
Identification of Blacklist Numbers. Each of the proposed
systems includes a method for identifying numbers to be
included on the blacklist--some using consumer input and at
least one using a mathematical algorithm. But there are
significant issues with either method. Given the ease with
which robocallers using modern equipment can mimic the caller
ID of any other phone user, a consumer or an algorithm may
think it is identifying an illegal robocaller for the
blacklist, when it is actually listing the number of an
innocent party. Illegal robocallers can also change the numbers
they use (or the numbers they mimic) frequently--even
``tumbling'' a new legitimate number for each individual
robocall--limiting the usefulness of the blacklist. This
suggests a need to contact the person or business associated
with the number in order to provide an opportunity to object to
being placed on the blacklist. Would there be an appeal
process? Would there be criteria for moving an innocent
customer from the blacklist to the whitelist? In addition, one
person's unwanted annoying robocall may be another person's
important informational message. One consumer may suggest
adding a political candidate's number to the blacklist because
he or she is annoyed with the candidate's message, while others
may welcome such messages. It is unclear how an algorithm could
even distinguish between wanted and unwanted robocalls.
Identification of Whitelist Numbers. Before implementation,
rules would need to be worked out and a system administrator
appointed to determine how, and on what basis, a robocaller
could get its number added to the whitelist. Would there be an
appeal process? What would be the criteria for moving a bad
actor from the whitelist to the blacklist?
Caller ID Spoofing. Even assuming an accurate database of
blacklisted and whitelisted numbers can be compiled and
maintained, the ease with which modern equipment and software
can allow a caller to hide its identity by spoofing a caller ID
would present significant challenges. It would, for example, be
relatively simple for an illegal robocall spammer to spoof one
or more of the numbers on the whitelist to get its calls
through the protection system. While the Truth in Caller ID Act
prohibits spoofing of caller IDs for fraudulent or harmful
purposes, unlawful robocallers--especially those that are
calling from outside the United States--that aren't deterred
from violating the TCPA would likely have little concern about
also violating the caller ID law. Identifying illegal
robocallers that are spoofing caller ID is made significantly
more difficult if the robocaller uses modern Voice over
Internet Protocol (VOIP) technology, which if routed through a
proxy server becomes virtually impossible to trace.
Scaling. Because unlawful robocallers typically use a large
number of telephone numbers and change telephone numbers
frequently, the database for the blacklist would be very large
and continually growing, requiring a significant investment for
both acquisition and maintenance of computer resources. Perhaps
more significantly, the capacity in both telecommunications and
computer resources needed to route to the database for
comparison all of the calls robocallers may make to the tens or
even hundreds of millions of persons who may sign up for the
service would be massive.
Administration and Operation of the System. Any robocall
blocking system of the type proposed in the FTC contest would
involve a fairly massive administrative and operational effort.
It should not be expected that carriers can be the implementing
entities. The significant costs of the system aside, a single
carrier could reasonably compile and maintain a robocall
blacklist that would be associated only with the illegal
robocall identification and calling preferences of its own
customers. Thus no system operated by a single carrier could be
as comprehensive as it would need to be to be effective. In
addition, wireless carriers, as legal common carriers, must
deliver calls that are placed on their networks. While a
subscriber that opted in to the proposed robocall blocking
system may be considered to have authorized the blocking, the
carrier may not block calls from a legal robocaller on its
network, absent specific statutory or regulatory authority to
do so.
Privacy Issues. At least one reported robocall solution
would require the carrier to allow the solution administrator
to screen subscribers' incoming calls to determine whether they
are from an illegal robocaller or a legal robocaller or live
individual. Even if this kind of snooping is authorized by the
recipient of the call, such a potentially invasive technology
raises serious questions about consistency with the law and
rules governing the privacy of customer proprietary network
information and a carrier's traditional responsibility to avoid
intercepting or divulging the content of communications other
than in narrowly circumscribed instances.
We appreciate the efforts of the FTC and others who are exploring
technologies that may minimize the transmission of illegal robocalls to
our customers. As the foregoing suggests, however, any technical
solutions must be subject to careful and complete consideration.
Particularly at this early stage of development, it would be premature
to impose any technical solution as a mandate.
Finally, whether as part of a technical solution to robocalls or as
part of any amendment to the TCPA, nothing should be done to upset the
FCC's longstanding conclusion under the TCPA that wireless carriers
need not obtain additional consent from subscribers prior to initiating
autodialed calls at no cost to their subscribers. These important and
beneficial customer service calls may be used to notify customers of
billing alerts, low balance alerts on prepaid phones, and usage alerts
informing customers of approaching limits for voice, data, or messaging
plans. In encouraging wireless carriers to provide this information to
their customers, the FCC has consistently recognized the benefits of
such calls between wireless carriers and their customers and recognized
that Congress had no intention of hindering these communications. Any
new solution to illegal robocalling, whether technical or through
increased enforcement, should not upset this key communication between
wireless providers and their customers.
On behalf of CTIA, thank you for your consideration of these
suggestions. We look forward to working with you to address these and
related matters as the Subcommittee moves forward with its work.
Senator McCaskill. Thank you very much.
Mr. Stein?
STATEMENT OF MATTHEW STEIN, CHIEF TECHNOLOGY OFFICER, PRIMUS
TELECOMMUNICATIONS INC.
Mr. Stein. Thank you, Chair, Ranking Member Heller, and
Senator Pryor. My name is Matthew Stein, and I am the Chief
Technology Officer of Primus Telecommunications. While my
responsibilities at Primus cover all of our technology assets
globally, my comments today are specific to our Canadian
business, known as Primus Canada.
As in the United States, robocalls are a concern in Canada,
and I thank you for the opportunity to speak to a technological
solution invented, developed, and deployed by Primus.
Primus provides a service called Telemarketing Guard to all
of our telephone customers in Canada. This patented service was
developed and deployed in 2007 in response to our customers'
discontent with their inability to control unlimited,
unsolicited calling.
The concerns expressed by our customers are familiar:
unwanted calls interrupting dinner, interrupting quiet
evenings, interrupting family time, and, in many cases, the
inability to make these calls stop, no matter how many times
the customer asked to be taken off one kind of list or to be
put on another.
Before I proceed, it is important to make clear that we
view robocalls and automated telemarketing calls as a subset of
mass unsolicited calling, which, for convenience, I will refer
to as ``telemarketing.'' Our customers have made clear that
their view of telemarketing does not change if they are greeted
by a live person or a recorded message when they pick up the
phone.
Telemarketing Guard addresses this issue by providing
customers with control over how they wish to deal with
telemarketing calls. When a call is placed to a customer
protected by it, our system evaluates the call even before the
phone has rung. If the system believes, based on feedback
provided through our customers, that the caller is likely a
telemarketer, the call does not go directly to our customer.
Instead, a message is played telling the caller that the
customer does not accept telemarketing calls and invites them
to press ``1'' to record their name so that their call can be
announced. The customer then has the choice to accept the call,
refuse the call, or send it to voice-mail, all without actually
speaking to a telemarketer.
Telemarketing Guard uses the actions of our customers to
identify these telemarketing calls. The system is completely
neutral to all phone numbers until a report from a customer is
received. As a result, all calls, telemarketing or not, are
unimpeded to our customers initially. But if a customer
receives an unscreened telemarketing call, it is up to them to
decide whether or not they will choose to report that number,
which they can do by picking up their phone and dialing a
special code.
If they choose to report the call and if a threshold of
other customers also reports that call, the system begins to
monitor the phone number and scans for a number of behavioral
characteristics. For example, these could be frequency of
calling, time-of-day concentration, sequential calling, and so
on. There are many, many other elements that are scanned for.
All of this is done to determine if the call should be
identified as a telemarketer on a go-forward basis.
In essence, the system promotes and relies on customer
engagement to identify telemarketing calls. But the reverse is
also true. If enough customers accept a call from an identified
telemarketer, the number will cease to be considered a
telemarketer by the system.
This is accomplished by a system that requires no arduous
maintenance of lists or complicated judgment calls to be made,
whether by network providers, by third parties, or government
bodies. Instead, the system just tallies customer votes to
determine who is and who is not an unwanted telemarketer. In
other words, it becomes a living, breathing, crowdsourced list
of undesirable telemarketers and robocallers.
Further, customers that don't even bother to participate in
reporting still benefit from the actions of those that do. This
is the defining element of Telemarketing Guard and what we
believe makes it unique. In fact, this is what led us to patent
this system.
Customer engagement and response have been exceptional.
Based on our internal surveys, the service has increased
customer satisfaction and become one of the leading reasons
customers choose to keep their phone service with Primus.
In regards to costs and implementation, the system is not
complicated or expensive to establish and maintain. Indeed, we
currently provide Telemarketing Guard to all of our customers
at no extra charge. The system can also be grafted easily into
existing phone networks, as we did into ours. It can work for
traditional landline phones, Voice-over-IP phones, or mobile
phones. The service doesn't require customers to buy anything
or install anything or configure their phone in certain ways.
And, finally, the service itself can be adapted and configured
to address needs of consumers, telephone service providers, or
legislative and regulatory bodies.
In conclusion, besides being a powerful consumer tool, we
believe that Telemarketing Guard is consistent with the
competitive interests of telecommunications carriers to provide
valuable new services to customers. Primus therefore welcomes
the efforts of this committee to identify ways that consumers
can be given more tools to address mass unsolicited calls and
to encourage carriers to provide such services.
Thank you, and I look forward to any questions you may
have.
[The prepared statement of Mr. Stein follows:]
Prepared Statement of Matthew Stein, Chief Technology Officer,
Primus Telecommunications Inc.
Thank you Chair and distinguished members of the Committee. My name
is Matthew Stein, and I am the Chief Technology Officer of Primus
Telecommunications Inc. While my responsibilities at Primus cover all
of our technology assets globally, my comments today are specific to
our Canadian business, known as Primus Canada. As in the United States,
robocalls are a similar concern in Canada and I thank you for the
opportunity to speak to a technological solution invented, developed,
and deployed by Primus to assist our customers with this issue.
Primus provides a service called Telemarketing Guard to all of our
telephone customers in Canada. This patented service was invented in
2006, and deployed in 2007 in direct response to our customers'
discontent with their inability to control and limit unsolicited calls.
The concerns expressed by our customers are familiar--unwanted calls
interrupting dinner, interrupting quiet evenings, interrupting family
time and, in many cases, the inability to make the calls stop no matter
how many times the customer asks to be taken off one kind of list or
put on another.
Before I proceed, it is important to make clear that we view
robocalls and automated telemarketing calls as a subset of mass
unsolicited calling, which for convenience I will generally refer to as
telemarketing calls throughout my presentation. Our customers have made
clear that their view of telemarketing calls does not change if they
are greeted by a live person or a recorded message when they pick up
the phone.
Telemarketing Guard addresses this issue by providing customers
with control over how they wish to deal with telemarketing calls. When
a call is placed to a customer protected by Telemarketing Guard, our
system evaluates the call even before the customer's phone is rung. If
the system believes, based on feedback provided by our customers, that
the caller is likely a telemarketer, the call does not go directly to
our customer. Instead, a message is played advising the caller that the
customer does not accept telemarketing calls and invites them to press
1 to record their name, so that their call can be announced to the
party they are calling. After the caller records their name, similar to
leaving a voice-mail, the system calls our customer and advises them
that they have received a potential telemarketing call and plays the
recording provided by the caller. The customer then has the choice to
accept the call, refuse the call, or send the call to voice-mail if
available. In fact, customers often decide to ignore the call
altogether without even having to answer the phone as the caller ID
will display the name ``Telemarketing Guard'' along with the original
caller's phone number.
Telemarketing Guard uses the actions of our customers to identify
potential telemarketing calls. The system is completely neutral to all
calling telephone numbers until a report from a customer is received.
As a result, all calls--telemarketing and non--will initially proceed
completely unimpeded to our customers. If a customer receives an
unscreened telemarketing call, it is up to them to decide whether or
not to report the number, which they can do through their phone. If
they choose to report the call and if a threshold of customers
reporting the same number is reached, the system then begins to monitor
the calling phone number and applies a number of behavioural
characteristics (e.g., frequency of calling, time of day concentration,
sequential calling, etc.) to determine whether the call should be
identified as a telemarketing call on a going forward basis.
In essence, the system promotes and relies on customer engagement
to identify potential telemarketing calls. The reverse is also true. If
enough customers accept a call from an identified telemarketer, the
number will cease to be considered a telemarketer by the system.
Several other safeguards are employed by the system to ensure that
calling numbers are not erroneously identified.
Customer engagement and response has been exceptional. Based on our
internal surveys, the service has increased customer satisfaction and
become one of the leading reasons that customers choose to keep their
phone service with Primus. In fact, few customers have selected to
disable the service.
In regards to costs and implementation, the system is not overly
complicated or expensive to establish and maintain. For its part,
Primus currently provides Telemarketing Guard to all of its telephone
customers at no extra charge. The system can also be easily grafted
into an existing network and deployed, such as we did. It can work for
traditional land line phones, voice-over-IP phones, or mobile phones,
if the Service Provider so configures it. The service does not require
customers to purchase or install any equipment or software whatsoever,
nor does it require customers to actively participate in reporting in
order to benefit from the reports of other customers. Additionally, the
service itself can be adapted and configured to address specific needs
of customers, telephone service providers or legislative and regulatory
bodies.
In addition to being a powerful consumer tool, we believe that
Telemarketing Guard is consistent with the competitive interest of
telecommunications carriers to provide valuable services to customers.
Primus therefore welcomes the effort of the Subcommittee to identify
for consumers a way that they can be equipped with the means to address
unsolicited calls and to encourage carriers to offer services that
provide such tools to customers.
Thank you and I look forward to any questions that you may have.
Senator McCaskill. Thank you very much. We appreciate you
being here.
Mr. Foss?
STATEMENT OF AARON FOSS, FREELANCE SOFTWARE DEVELOPER, NOMOROBO
Mr. Foss. Thank you, Chairman McCaskill, Ranking Member
Heller, and Senator Pryor. I appreciate this opportunity to
testify.
And I am here today to illustrate that the technology
exists right now to block these illegal robocalls. And while
there are some challenges, such as caller ID spoofing and
privacy concerns, there are also effective solutions.
And to that end, there are three main points that I want to
discuss. First, I am going to talk about my winning FTC
Robocall Challenge entry. Then I will discuss some issues and
concerns that are involved with blocking robocalls. And,
finally, I am going to discuss the commercial viability of
robocall-blocking services.
So, currently, the Do Not Call Registry is almost
completely ineffective against these illegal mass-dialed
robocallers. So to fight back, the FTC launched a competition
to find new and creative solutions to this problem. They chose
my proposal, which I call Nomorobo, as one of the co-winners.
And that is a little play on ``no mo' '' robocalls.
So in real-time--well, here is how----
Senator McCaskill. Even we got that.
[Laughter.]
Mr. Foss. Great. Just making sure. Just making sure.
[Laughter.]
Senator McCaskill. Just to reassure you. I know the rest of
the country thinks we are idiots, but we got that. [Laughter.]
Mr. Foss. Just making sure.
So here is how it works. In real-time, Nomorobo analyzes
the incoming caller ID and the call frequency across multiple
phone lines, and if it detects a robocaller, the call is
automatically disconnected. And all of this happens before the
consumer's phone rings.
So as each call is analyzed, a blacklist of robocallers is
continually updated. And the more calls that come into the
system for analysis, the better that the algorithm works.
I actually built this system using the same technology that
these robocallers are using, so it scales inexpensively to
handle millions of calls. And Nomorobo works on landlines,
voice-over-IP, and cell phones on all of the major carriers and
does not require any additional hardware or software. All that
is required by the consumer is a simple, one-time setup to
enable a free feature that is already built into the switches
called ``simultaneous ring.''
But, as with all new ideas, there is always some
skepticism. Industry players have expressed three major
concerns about robocall blocking: spoofing caller ID; violating
consumer privacy; and allowing legal robocalls.
So it is incredibly easy to spoof caller ID to show any
phone number, and almost all of the robocallers do that. But
while you can falsify the calling number, you can't falsify the
calling patterns. So it is a red flag, for example, when the
same number, whether it is spoofed or not, has made 5,000 calls
to different numbers in the past hour. And it is also a red
flag when the same number is sequentially calling large blocks
of phone numbers. Both of these scenarios indicate robocalling
patterns.
And so a static blacklist of known robocallers would only
work in a very limited amount of situations. But by combining
the caller ID, whether it is real or faked, with real-time
calling pattern analysis, robocalls can effectively be
detected.
And, also, with solutions like these that only look at the
metadata of a call, there is no need to monitor or listen in to
the phone calls, thus assuring customer privacy. The caller ID
data, along with the date and time, across many phone lines,
gives enough of a fingerprint to detect robocallers without
having to analyze the actual content of the call.
And the final concern that has been raised is how to allow
legal robocalls, such as schools and emergency notifications,
to bypass robocall blocking. And this can be accomplished by
building a trusted, real-time whitelist. I have already had the
opportunity to speak with some of the legal robocallers, and
they are very open to working on a solution that allows them to
successfully deliver their calls. They want these illegal
robocallers put out of business as much as the consumer does.
As my final point, I would like to show that there is proof
of consumer demand for this type of service, as well as
commercial viability. After I won the competition, I
commissioned a nationwide survey that indicated that 57 percent
of respondents would use a robocall-blocking service. And,
further, 17 percent said that they would pay a monthly fee for
such a service.
Since the beginning of April, when the FTC announced the
winner of the competition, over 3,600 people have signed up on
the Nomorobo mailing list. I have received over 400 e-mails
asking, or, rather, begging, for me to release this service.
And based on the feedback that I have received, robocalls
are a serious quality-of-life issue, as many people on this
panel have said. I have to agree; I hear time and time again
how consumers feel helpless to stop robocalls. And I think it
hits at a certain core level, and we have mentioned this, but
they are in their homes, with their family, enjoying their
time, and they are being interrupted by a fraudster who is
trying to sell them something that they don't want or they
don't need.
So, members of this committee, I hope I have effectively
demonstrated that the technology to defeat these robocalls
exists today. It can be implemented quickly and easily with no
changes to the current infrastructure. And while there are some
concerns, such as spoofing and privacy, there are also
solutions. The market is large and the problem is so irritating
that consumers have shown a willingness to pay for a solution.
So I thank you for your time, and I am committed to
supporting your efforts in any way that I can.
[The prepared statement of Mr. Foss follows:]
Prepared Statement of Aaron Foss, Freelance Software Developer,
Nomorobo
Thank you, Senator McCaskill, Mr. Chairman, and distinguished
members of the Committee. I appreciate this opportunity to testify.
I am here today to illustrate that the technology exists, right
now, to block illegal robocalls. And, while there are some challenges,
such as Caller ID spoofing and privacy concerns, there also are
effective solutions.
To that end, there are three main points that I will discuss.
First, I am going to talk about my winning FTC Robocall Challenge
entry. Then I will discuss some issues and concerns involved with
blocking robocalls. And finally, I will discuss the commercial
viability of robocall blocking services.
Currently, the Do-Not-Call registry is almost completely
ineffective against illegal, mass dialed, robocallers. To fight back,
the FTC launched a competition to find new and creative solutions to
this problem. They chose my proposal, which I call ``Nomorobo,'' as the
co-winner.
In real-time, Nomorobo analyzes the incoming Caller ID and call
frequency, across multiple phone lines. If it detects a robocaller, the
call is automatically disconnected. All of this happens before the
consumer's phone rings.
As each call is analyzed, a blacklist of robocallers is continually
updated. The system is actually built using the same technology that
the robocallers are using, allowing it to scale, inexpensively, to
handle millions of calls. The more calls that come into the system for
analysis, the better the algorithm works.
Nomorobo works on land lines, voice-over-IP and cell phones on all
of the major carriers and does not require any additional hardware or
software. All that is required by the consumer is a simple, one-time
setup, enabling a free feature called simultaneous ring.
But, as with all new ideas, there's always some skepticism.
Industry players have expressed three major concerns about robocall
blocking: (1) spoofing Caller ID; (2) violating consumer privacy; and
(3) allowing legal robocalls.
It is incredibly easy to spoof the Caller ID to show any phone
number--and almost all of the robocallers do this. But, while you can
falsify the calling number, you cannot falsify calling patterns. It is
a red flag, for example, when the same phone number, spoofed or not,
has made 5,000 calls to different numbers in the past hour. It is also
a red flag when the same phone number is sequentially calling large
blocks of phone numbers. Both of these scenarios indicate robocalling
patterns.
A static blacklist of known robocallers only works in very limited
situations. But, by combining the Caller ID, whether real or faked,
with real-time calling pattern analysis, robocalls can be effectively
detected.
Also, with solutions that only look at the metadata of a call,
there is no need to monitor or listen to the phone call, assuring
consumer privacy. The Caller ID data, along with the date and time,
across many phone lines, gives enough of a fingerprint to detect
robocallers without having to analyze the actual content of the call.
The final concern that has been raised is how to allow legal
robocalls, such as schools and emergency notifications, to bypass
robocall blocking. This can be accomplished by building a trusted,
real-time whitelist. I have had the opportunity to speak with some of
the legal robocalling companies and they are very open to working on a
solution that allows them to successfully deliver their calls. They
want the illegal robocallers put out of business as much as the average
consumer does.
As my final point, I will show proof of consumer demand for this
type of service as well as commercial viability. I commissioned a
nationwide survey that indicated that 57 percent of respondents would
use a robocall blocking service. Further, 17 percent said they would
pay a monthly fee for such a service.
Since the beginning of April, when the FTC announced the winner of
the competition, over 3,600 people have signed up on the Nomorobo
mailing list. I have received over 400 hundred e-mails asking, or
rather, begging for this service to be released.
Based on the feedback that I have received, robocalls are a serious
quality-of-life issue. I hear time and time again how consumers feel
helpless to stop robocalls. It hits at a certain core level. Here they
are, in their homes, with their family, and they are being interrupted
by a fraudster trying to sell them something they do not want or need.
Members of this Committee, I hope that I have effectively
demonstrated that the technology to defeat robocalls exists today. It
can be implemented quickly and easily with no changes to the current
telephone infrastructure. And, while there are some concerns, such as
spoofing and privacy, there are also solutions. Stopping robocalls
would be a huge win for the consumer. The market is large and the
problem is so irritating that consumers have even shown a willingness
to pay for a solution.
I thank you for your time and I am committed to supporting your
efforts in any way that I can.
Senator McCaskill. I appreciate you being here very much.
And let me just say, Mr. Stein, I was fascinated with--
because you have now had experience doing this for years, and
it has worked commercially for your carrier.
Mr. Stein. Absolutely.
Senator McCaskill. And so let me just say for the record
that the first company that is smart enough to do this in the
United States, I am switching carriers to that one.
[Laughter.]
Mr. Stein. Fair enough.
Senator McCaskill. And I think that the American--and I
would like, Mr. Altschul, for you to address this, and Mr.
Rupy.
I don't understand. We have heard from two good witnesses
that the technology is available. And I understand fear of the
consequences and Mencken's quote and that for every action we
have in Congress, there is a reaction. On the other hand, if
you look at the fears, to me, they are much less than what the
reality is now that people are dealing with.
So why is it that Mr. Foss's technology is not quickly
being adapted in these commercial markets? And why is it that
Mr. Stein's patented product has not been licensed to an
American carrier?
Mr. Altschul. I don't know about the license issues, but we
do have concerns about overreaching and blocking legitimate
calls.
As senators, I am sure you are more familiar than you would
like to be with the kind of informational robocalls and text
messages you receive from airlines when flights are delayed
because of weather or other events. The volume of these calls
are unpredictable, and they will flood carrier networks with
identical recorded messages and text messages.
And they will carry a caller ID. That caller ID, if it is
put on a whitelist, can then be spoofed, as I think we all
agree how easy it is to spoof a number, and have the same
fingerprint or pattern as other messages.
One of the things----
Senator McCaskill. Well, how does Mr. Stein's licensed
product--I hate to interrupt you, but if I could get a
conversation between the two of you.
Mr. Altschul. Sure.
Senator McCaskill. Mr. Stein, address the airlines calling
with information that a flight has been delayed.
Mr. Stein. Well, first----
Senator McCaskill. In reality, how does that work----
Mr. Stein. Sure.
Senator McCaskill.--with your technology?
Mr. Stein. Sure. Remember that the technology has been
deployed for a number of years, so I will speak specifically to
the Canadian calling patterns, which, for the record, I don't
have any reason to believe are any different than American.
The reality is that the system, the Telemarketing Guard
system itself, will only begin to monitor and, therefore, take
action once there are reports by enough people that say, this
is an unwanted telemarketer.
Further, once that call comes in, the system will not block
that call. Being a carrier ourselves, we have always viewed it
as our responsibility to put the two people on the phone, not
impede that. But it is to give a moment of pause and to get the
other party, the calling party, to press ``1,'' record their
name, and so forth.
In the event of delayed flights and things like that, these
things tend to go right through. There hasn't been any effect.
We have never seen a complaint like that because----
Senator McCaskill. So no consumer is going----
Mr. Stein.--people have never----
Senator McCaskill.--to call----
Mr. Stein. That is right. No consumer----
Senator McCaskill. Nobody is going to call and say, the
airline let me know my flight was late. And that is what the
initial----
Mr. Stein. That is right.
Senator McCaskill. That is the initial beginning of the
block, is a critical mass of people calling and saying, hey,
these guys are----
Mr. Stein. That is right, because they----
Senator McCaskill.--rip-off people or they are trying to
sell me siding.
Mr. Stein.--they are not objecting. The consumer is not
objecting. And I talk about this benefit, in that nobody other
than the consumers themselves decide what is and what is not an
unwanted telemarketer or robocall. And so that----
Mr. Altschul. But my point is that that number, which is
welcome and legitimate and properly described on caller ID, is
basically the identifier that the carrier and the customer and
Mr. Stein's system has to track wanted and unwanted calls.
Right now, there is no need for scammers to actually pick
numbers that consumers would recognize as the source of
messages, informational messages, they would like to receive.
But there is no limitation on a fraudster's ability to use an
airline's number to fill out the caller ID field in the
robocalls and messages that they send.
Senator McCaskill. Well, let me just address that. So let's
assume in Canada, since 2007, that a fraudster got a hold of
United Airlines' number and started using that.
How would it work with your system, Mr. Stein, if that
happened, if they spoofed a legitimate number that no consumer
would complain about, but they started using it and----
Mr. Stein. Right.
Senator McCaskill. What would happen? How would that work?
Mr. Stein. Two quick comments.
First, the system is quite smart. And over the years that
we have tuned it and built and enhanced it, we have built in a
great many safeguards to prevent this exact thing from
happening. And I won't elaborate in full detail on all those,
but such is to say that if such a thing were to happen and
reports were to start to come in, one would assume that at the
same time the airline is using that phone number, too, and
therefore a lot of those calls are getting accepted by our
customers.
So we would be seeing votes going in both directions, and
the system becomes increasingly skeptical and looks for what
distinguishes the two types of calls, and then is able to break
them down based on many of the other criteria that are no
longer using just, say, the caller ID, which is the thing that
is easy to spoof. There are a lot of other characteristics in a
phone network that are available that we use.
Senator McCaskill. He wins.
Mr. Altschul. Well, give me another chance.
[Laughter.]
Mr. Stein. I would be happy to----
Mr. Altschul. As Mr. Foss testified, his technology is the
same technology or built on the same roots as the technology
these scammers are using. And what we have found, particularly
in the area of policing text messages that come across
carriers' gateways from the Internet is, as the carriers become
more sophisticated in looking at the fingerprints, looking at
the volume of calls, the number, the speed, the number of
identical messages, the fraudsters become increasingly better
educated and sophisticated at the same time.
So this is a cat-and-mouse game. You set a threshold, say,
originally of 10,000 messages a minute or an hour, and any
message volume for identical messages above that would get
caught. Before long, the fraudsters set their threshold at
9,000 messages. You lower the threshold again, the fraudsters
find out their messages aren't going through, they change their
threshold to still stay under the limit. The costs of doing
this really are almost zero.
And so, for every action and every, you know, time you
raise the wall, the bad guys come back at you with a taller
ladder.
Senator McCaskill. Well, I think the point that is being
made, and for Mr. Rupy and Mr. Altschul, the point that is
being made is we have the capability of being as sophisticated
in terms of technology as the bad guys. And there are a number
of different algorithms that could be used to identify the bad
guys that currently our American carriers just aren't bothering
to use.
And that is hard for me--I mean, Mr. Foss is on the
precipice of hopefully rolling out a product that will show
that Canada won't be a decade ahead of us, as opposed to
merely--what are we up to now? Six, 7 years? You know, if the
sky was going to fall, I think Mr. Stein probably wouldn't be
here.
And, Mr. Rupy, I will wait for Mr. Heller to ask questions
to come back and ask your take on this.
Because it worries me that we are going to say, well, you
know, if we do this to try to catch the bad guys, they are just
going to do something else. Can you imagine the amount of money
we could have saved if we just would have just given up on
trying to interdict drugs?
Mr. Altschul. Well, and to be clear----
Senator McCaskill. ``Well, if we do that, if we go after
their airplanes, they are going to do boats. Let's not do the
airplanes. Or if we do boats, they are going to go over, you
know, the Mexican border. Let's don't do that, because then
they will just go over the Mexican border.''
We just keep trying. And I think this is one of these
issues that we really haven't teed up yet to really try hard.
Mr. Altschul. Well, to be clear, wireless carriers, with
respect to SMS text messages, are doing exactly what you have
described, and it has been an iterative learning experience.
And some of the lessons learned--it is just basically a spam
filter, but a spam filter for text messages--are instructional
as to how smart the bad guys are.
Senator McCaskill. We are smart.
Senator Heller?
Senator Heller. Madam Chairwoman, thank you.
Mr. Stein, I want to talk a little bit about Telemarketing
Guard. Is that a unique system in Canada?
Mr. Stein. Yes.
Senator Heller. Are there any other carriers that have
anything that is similar to what you have?
Mr. Stein. No. We--no.
Senator Heller. You talked about years. How long has it
taken you to develop this particular system?
Mr. Stein. We came up with the idea in early 2006. We had
it commercially deployed, built, tested, et cetera,
commercially deployed by, I believe, early 2007.
Senator Heller. Any initial weaknesses to the system,
things that----
Mr. Stein. No, I wouldn't say there were weaknesses. I
would say we learned lots in the initial days, but nothing
concerning, no.
Senator Heller. OK.
Mr. Stein. No complaints from customers, et cetera, nothing
like that.
Senator Heller. Have you been approached by any other
carriers, whether in Canada or the U.S., to borrow or buy the
technology?
Mr. Stein. A little bit. We participated in the FTC's
robocall summit in the fall last year. After that, we had a
couple of calls, some light inquiries, but nothing pursued too
greatly.
Senator Heller. So you got beaten out by Nomorobo?
[Laughter.]
Mr. Stein. Well, in fairness, we didn't submit
Telemarketing Guard to the challenge, as we were not eligible
for it. We had presented at the summit that preceded the
challenge.
Senator Heller. OK. Are you aware of any barriers that may
prohibit bringing this kind of technology from Canada to the
United States?
Mr. Stein. No, I am not.
Senator Heller. OK. OK.
Mr. Foss, congratulations.
Mr. Foss. Thank you.
Senator Heller. And you said you had about 3,600 people now
that have--do they buy your product, they download your
product? What do they do? How does someone know to get involved
in what the FTC has produced in this case?
Mr. Foss. Sure. And that is the funny part, is that it is
not even available yet. It was just the announcement. I set up
a website, I put in my e-mail and said, it is coming soon.
Thirty-six hundred people said, give this to me, whatever it
is. They don't know how much it is going to be, how it is going
to work. They just know that there is a problem. So this is
just basically the press that has been generated by this and
directed them to the website.
Senator Heller. When do you think it will be readily
available?
Mr. Foss. By the end of the summer, actually.
Senator Heller. So you will have some kind of a program to
make sure that the American public are aware of what your
product is?
Mr. Foss. Exactly, exactly. After the competition, I wound
up talking to a bunch of investors. I got enough seed money to
go and build this into a beta to actually go and launch it and
to address some of these exact concerns to see--you know, the
best way is just to prove that it will work.
And one of the things, I think, that Mr. Stein's product is
actually better at than mine, because he is a carrier, is the
worst-case scenario, I think, in Mr. Stein's case is that the
call gets diverted to voice-mail. You know, a lot of these
things--the thinking that went into it before everybody had
voice-mail was that, and especially on mine, is that the call
is going to be disconnected, you are going to lose the call
forever. But now if we can just divert it to voice-mail, much
like spam does into your spam filter, I think everybody would
rather have a voice-mail box with five or six robocalls than
five or six robocalls.
Senator Heller. OK.
You mentioned during your testimony that there were some
industry players that were concerned with this technology. What
are those concerns, and what have you done to address those
concerns?
Mr. Foss. Yes. So the main concern is the caller ID
spoofing. A lot of players feel and what they say is that,
well, the caller ID is always going to be wrong, so therefore
we can't stop this problem.
But, again, I see it a little bit differently. And by using
the caller ID, whether it is real or not, with these calling
patterns, real-time calling patterns, that we can actually
start--again, even if it is faked, it doesn't really matter.
The second is the consumer privacy. A lot of people have
said that this isn't like e-mail, because in an e-mail you can
go and analyze the content, and that in order to do this, you
would have to listen in on everybody's phone calls.
And I don't believe that is correct. I think that using
this caller ID, with the calling patterns--and, again, much
like the other solutions that are here--some other reported
data, the FTC data, you actually have a stab at making this--it
is not going to be perfect.
It is absolutely not going to be 100 percent. But even with
spam filters today, certain spam gets through, sometimes real
e-mails get into your spam folder. And I think that we need to
try it, and I think that we need to start somewhere.
Senator Heller. Mr. Rupy, you said in your testimony that
technology is constantly changing. Do you believe a solution
like this, Nomorobo, is a solution that can work?
Mr. Rupy. Senator, that is a fantastic question, and I have
to say I think it is absolutely fantastic that there are
innovators like Mr. Foss out there who are working to develop
these various solutions. And as Mr. Foss acknowledges, there
are challenges to some of these technological solutions.
And my point on the technological issue is that, like so
many issues that arise in this Internet space, it is a
constantly evolving and moving target. So I think in terms of
designing a single technological silver bullet that can fully
address the robocall issue, that will be an ongoing challenge.
Senator Heller. One more question, if you don't mind.
Senator McCaskill. Sure. Take all the time you would like.
Senator Heller. Mr. Altschul, government agencies cited
their number of complaints. Do you find those numbers to be
accurate?
Mr. Altschul. Carriers receive complaints. The government
agencies at all levels, Federal and state, receive these
complaints. So they are accurate, but our gripe is the way they
are actually displayed and recorded by the Federal
Communications Commission. They are divided across services,
and it really doesn't provide a clear picture of what is going
on or the magnitude of the problem.
Senator Heller. Has the industry had an opportunity to
verify the number of cites and complaints that----
Mr. Altschul. I am not in any way challenging the numbers.
It is how they are reported.
Senator Heller. OK.
Thank you.
Senator McCaskill. Mr. Rupy, when the common carriers see
mass amounts of calling and short calls in a massive quantity
come over the transom, what do you do?
Mr. Rupy. Senator, that is where, during my oral testimony
and the written testimony, several of our member companies have
these network operations centers. And there are measures that
these companies can take to address these mass-calling events.
And that is where some of these working groups that I mentioned
come in.
Our experience----
Senator McCaskill. What do they do now, though? You said
they take different measures. Can you give me an example of one
of the--you know, you don't have to name the carrier, but give
me an example of--let's assume one of my carriers, which is
AT&T, let's assume a massive amount comes over in a short
period of time in a geographically concentric area. Do you know
what they actually do when that happens, if anything?
Mr. Rupy. Senator, I know they take actions. I don't know
what those specific actions are. And we would be happy to
provide that information.
Senator McCaskill. I think that would be important for us
to know.
Mr. Rupy. Absolutely. Sure. And----
Senator McCaskill. Go ahead.
Mr. Rupy. And just to keep in mind, oftentimes these mass-
calling events, I mean, they are not all directly attributable
to robocalling events. So, you know, for example, on September
11th, we had mass-calling events in New York City and
Washington, D.C. So----
Senator McCaskill. Well, I think that is pretty obvious,
though. I mean, obviously everyone understands that.
I am talking about, all of a sudden it is Kansas City--and,
you know, it is interesting. I was on a radio program this
morning talking about this. And they had gone out and done a
man-on-the-street interviewing people. And every single person
they talked to said they had gotten a call about siding. So,
clearly, there had been a massive amount of calling in the
Kansas City area about siding.
And that is what I am talking about. I mean, there is
nothing going on, there is no extraordinary weather event. You
know, if a plane is late, we are talking about maybe 100, 200
people; we are not talking about thousands.
I need to know what, if anything, these carriers are doing.
And do they feel an obligation to do something?
Mr. Rupy. Well, and they are certainly taking action on
those issues, Senator. But I think one of the points that was
raised earlier by various folks on the panel here is that,
under our current legal framework, regardless of whether it is
a mass-calling event or sort of a standard calling volume, we
are under a legal obligation to complete those phone calls
and----
Senator McCaskill. Well, so you are saying that you legally
couldn't adopt Mr. Stein's technology?
Mr. Rupy. As I understand----
Senator McCaskill. It connects; it just decides whether it
goes to voice-mail.
Mr. Rupy. As I understand Mr. Stein's and Mr. Foss's
technology, to a certain degree you have these--the decision is
removed, to a certain degree, from the consumer and is made by
the carrier with----
Senator McCaskill. No, that is not true. That is not true.
I don't think that is true.
Mr. Stein, the carrier is not making the decision, is it?
Mr. Stein. No, the carrier does not make that decision. I
can only speak, of course, to our system.
The system doesn't block a call under any circumstance,
other than if the customer were to say, here is one given
number that I don't want, a blacklist, available on many
services.
In the case of Telemarketing Guard, it impedes the call and
asks the caller to press a digit to record their name. But in
all of those cases, those recorded names, the phone call is
made, et cetera.
And I am not a lawyer, so I can't speak to the legality of
it. I am sure we have a lot of them in the room, though.
[Laughter.]
Senator McCaskill. I would really appreciate, Mr. Rupy, if
you would take back to the legal staff at your organization the
specifics of both Mr. Stein's and Mr. Foss's technology and get
back to us with what specific problems, from a legal framework,
you believe that there are.
I think if this were offered by a carrier, you know, I am
just shaking my head that an American carrier has not tried to
adopt one of these technologies because I think it is such a
winner in an open, capitalistic, competitive market. And by my
television ads that I watch, all the carriers are pretty darn
competitive right now. I mean, they are desperately not just
trying to get new customers; they are trying to hold on to
customers. Because, you know, now that we can take our phone
numbers, there is this incredible desire to see if you can't
get somebody to walk from someone else to you.
And for the life of me, I can't figure out why you all are
not more aggressively going after this very desirable
technology on behalf of consumers.
Mr. Rupy. Senator, we can absolutely provide that
information.
And just to be clear, I mean, our member companies do
offer--and I always encourage consumers to reach out to their
respective carriers to see the services that they are offering.
And they do range from things like, whether it is caller
identification, to conditional call forwarding, to anonymous-
call blocking. There are tools that the carriers are providing
and continuing to develop.
And, again, we operate under that very stringent obligation
to complete those calls. And it is very clear to us that that
is something we need to comply with.
Senator McCaskill. Well, I don't want anybody to break the
law.
[Laughter.]
Senator McCaskill. But I have a feeling we can do this with
the technology that is out there without breaking any law and
maybe even without us having to write any laws. And wouldn't
that be special? Because it is always nice when we can reach a
marketplace solution in the private sector.
And I know that I am getting a nodding head from Senator
Heller right now.
[Laughter.]
Senator McCaskill. It is always better to do it in the
marketplace with a competitive solution as it relates to
capitalism than it is for the government to come in with a
heavy hand and try to impose a solution.
So I think it is pretty important that we hear from you
about what you see the legal missteps would be, since we have
an example of technology that has been used in a country that
also embraces capitalism----
[Laughter.]
Senator McCaskill.--and it seems to be working and working
well for their company. So I would really appreciate you all
with that follow-up.
Do you have any other questions?
Senator Heller. Yes, I do. And thank you, Madam Chairwoman,
and thanks for your comments and to follow up.
And this is for the panel. I guess the bottom line with
this particular hearing is, should the FTC and the FCC be given
enforcement powers or additional enforcement powers, or can
this be solved through the private industry itself?
Mr. Rupy?
Mr. Rupy. Senator, I think as Senator McCaskill mentioned
earlier this morning, the existing legal framework dealing with
robocalls appropriately targets the bad actors who are engaging
in this fraudulent activity.
And I think to the extent that we continue to target that
enforcement and make that enforcement aggressive against those
actors, that is the ideal solution here. Because, as I have
said in my written testimony, our member companies work with
agencies like the FTC to prosecute these actors. We want to
catch them as much as everyone here in this room.
Mr. Altschul. I would agree. I think it requires a holistic
solution. Everybody has to play a role. And, certainly, the
enforcement agencies have a critical role, as do consumers, as
does the industry.
One of the things that our industry has begun looking at,
which is far from yielding any results, is how to better map
and trace these calls and messages when they cross through the
Internet to traditional carrier networks.
As you may know, carrier networks, when they were closed,
used a signaling system called Signaling System 7--there never
was a System 8--as a way of setting up and identifying calls
for billing, tracing, all kinds of things. The Internet uses a
system call SIP, Session Initiation Protocol. And mapping or
being able to marry these two very, very different kinds of
protocols is part of the problem right now the enforcement
agencies and everyone is having in trying to trace this back to
the source of these messages.
And if the technical experts who have begun to work on this
marrying of SIP to SS7 messaging protocols are able to solve
that problem, we will enable, you know, great progress in
identifying and stopping these messages at the source.
Senator Heller. I am going to guess Mr. Stein and Mr. Foss
believe that there is a private-sector solution to these
problems, and I will leave it at that.
I just want to ask one more question for you, Mr. Rupy and
Mr. Altschul: if you have any response to the FTC raising the
issue of abolishing the common carrier exemption. Do you have
any feel on that?
Mr. Rupy. In terms of the common carrier exemption,
Senator, I think, as Senator McCaskill raised in her testimony
this morning, we have these issues where we have sort of
conflicting regulations, one for wireline, one for wireless.
And I think to the extent you start expanding the scope of, you
know, numerous agencies regulating similar players in the
field, that gets to be problematic.
Second, we fully support--and what I thought I heard in the
earlier testimony from the FTC is that, to the extent there is
an entity out there engaging in illegal activity, they are
going to go after that entity, as well they should. And we
fully support that, whether they are a common carrier or
whomever.
Mr. Altschul. As the FCC's Mr. Bash testified, there is an
existing working relationship between the two agencies. They
are both enforcing the same laws. And I think that there are
some institutional advantages that each institution has
developed in their respective areas. I am not aware that it is
a problem that has actually deterred any kind of investigation
or enforcement activity.
Senator Heller. OK.
I want to thank the witnesses for your time and energy.
And, Madam Chairwoman, thank you for holding this hearing.
Senator McCaskill. I appreciate everyone being here.
I will tell you that I know that there are concerns, and
all of the concerns about what can be done are based in wanting
to follow the law and stay true to what your mission is as
carriers, whether it be wireless or wired.
I do want you to know that I am going to follow up in 3
months and ask to find out what your members are doing in this
regard and what they feel like they can do. And whatever
information that you can give us in the next 3 months that
would spell out the problems you would have with adopting
either the technology that Mr. Foss is ready to roll out by the
end of the summer--do you know what it is going to cost, Mr.
Foss?
Mr. Foss. I am actually hoping to offer it for free.
Senator McCaskill. OK. So am I going to have to look at
ads?
Mr. Foss. No, actually, because I figure that on the----
Senator McCaskill. How are you going to do that? We know we
have to look at ads if it is free.
Mr. Foss. I didn't put this in my testimony, but this
problem doesn't only affect the consumer; it affects
businesses.
Senator McCaskill. Right.
Mr. Foss. And as the other panel talked about it, the
PSAPs, the emergency call centers. The FCC put me in touch with
the organization that manages a lot of these 911 centers. I
think there are over 5,000 of them. You know, this do-not-call
list is being implemented.
And, you know, I said to them, I said, if there was a
blacklist, a real-time blacklist, an up-to-date list of the
numbers that you shouldn't be answering, would that be helpful?
And they said that they had never even thought about that, and
if that existed, it would be amazing.
So I think that there is an actual, you know, this data set
of the real-time robocallers and the calls that you shouldn't
pick up on, even I think on the consumer side--or, I am sorry,
on the business side or anybody who has large call centers, you
know, thousands of phone lines.
And I spoke to some that are in financial services, you
know, the Citibanks and the Chases of the world. Every call
that comes in, they have to go and screen for fraudsters. So if
they know before they even send it for screening that they
should immediately dump it, I think that there is a real
valuable asset there.
So I think that by doing it with the consumers and offering
them, you know, a really good service of blocking the
robocalls, my thesis is that I can make money on the business
side.
Senator McCaskill. On the business side.
Mr. Foss. Yes.
Senator McCaskill. OK. Well, you don't need to worry; when
you roll out, I will give it a try.
Mr. Foss. Sounds good. Thank you.
Senator McCaskill. And thank you, Mr. Stein, for coming
from Canada. And we will look forward to following up with our
carriers here in America to see if we can't reach a solution.
Because I do know this: With the technology that is
available, if it is just about chasing these guys, law-
enforcement-wise, around the country, we are never going to get
the results that consumers deserve on this.
So I thank you all very much for being here. We appreciate
it.
[Whereupon, at 11:39 a.m., the hearing was adjourned.]
A P P E N D I X
Response to Written Questions Submitted by Hon. Claire McCaskill to
Lois Greisman
Question 1. Ms. Greisman, the FTC has essentially placed a call for
help with robocalls. Then-FTC Chairman Jon Leibowitz noted last year at
a summit on the issue, ``Law enforcement alone can't stop the
robocalls.'' No matter how many cases the FTC brings, the agency says
there is not much more it can do from an enforcement perspective to
abolish illegal robocalls. As a result, the Commission held a public
competition to find a viable technological solution that could provide
some level of defense against robocalls. Why do you think a
technological solution is the best answer to this problem?
Answer. I do not believe there is one best answer to this problem;
rather, the FTC must simultaneously pursue multiple strategies to fight
illegal robocalls. We launched the Robocall Challenge because
technological advances caused the explosion in illegal robocalls, and
we believe it is important to encourage technological solutions that
can counteract the proliferation of illegal robocalls. But the agency's
other efforts--including law enforcement, coordination with experts,
and consumer education--continue.
As one example, we continue our aggressive and strategic law
enforcement, and the actions we have brought in Federal court have shut
down entities responsible for billions of illegal robocalls. For
instance, the FTC put a robocall operation out of the telemarketing
business and recovered approximately $3 million under a settlement
resolving FTC charges that the defendants bombarded consumers with more
than two billion robocalls, including the ubiquitous ``Rachel from
cardholder services'' calls, sometimes using false Caller ID names,
such as ``SALES DEPT.'' See FTC v. Asia Pacific Telecom, Inc.,
available at http://www.ftc.gov/opa/2012/03/asiapacific.shtm.
Question 2. The FTC selected three winners in its robocall
challenge. Why were those three entrants chosen as winners? What about
their submissions, compared to the rest, does the FTC believe will best
limit fraudulent robocalls for America's consumers?
Answer. The Robocall Challenge submissions were judged by Steve
Bellovin (Chief Technologist from the FTC), Henning Schulzrinne (Chief
Technology Officer at the Federal Communications Commission), and Kara
Swisher (co-Executive Editor of All Things Digital). The judges
reviewed hundreds of entries to find submissions that best met all
three of the judging criteria: (1) Does it work?; (2) Is it easy to
use?; and (3) Can it be rolled out? What follows is a more detailed
explanation of the criteria, which was publicly posted at http://
robocall.challenge.gov/details/criteria:
Does it work? (weighted at 50 percent)
How successful is the proposed solution likely to be in
blocking illegal robocalls? Will it block wanted calls? An
ideal solution blocks all illegal robocalls and no calls that
are legally permitted. (For example, automated calls by
political parties, charities, and health care providers, as
well as reverse 911 calls, are not illegal robocalls.)
How many consumer phones can be protected? What types of
phones? Mobile phones? Traditional wired lines? Voice over
Internet Protocol (``VoIP'') land lines? Proposals that will
work for all phones will be more heavily weighted.
What evidence do you already have to support your idea?
Running code? Experiments? Peer-reviewed publications?
How easy might it be for robocallers to adapt and counter
your scheme? How flexible is your scheme to adapt to new
calling techniques? How have you validated these points?
Remember that the real test of a security system is not whether
or not you can break it; it's whether or not other people can.
Is it easy to use? (weighted at 25 percent)
How difficult would it be for a consumer to learn to use
your solution?
How efficient would it be to use your solution, from a
consumer's perspective?
Are there mistakes consumers might make in using your
solution, and how severe would they be?
How satisfying would it be to use your solution?
Would your solution be accessible to people with
disabilities?
Can it be rolled out? (weighted at 25 percent)
What has to be changed for your idea to work? Can it
function in today's marketplace? (E.g., Does it require changes
to all phone switches world-wide, and require active
cooperation by all of the world's phone companies and VoIP
gateways, or can it work with limited adoption?) Solutions that
are deployable at once will be more heavily weighted, as will
solutions that give immediate benefits with even small-scale
deployment.
Is deployment economically realistic?
How rapidly can your idea be put into production?
The judges selected the winners from among the contestants' many
informed, creative, and intelligent submissions, based on the criteria
laid out above.
While I cannot speak for the judges, I believe the winning
solutions contain promising ideas about how to address difficult
realities such as the limitations of the telecommunications
infrastructure and the prevalence of caller ID spoofing. For example,
one of the winners, Aaron Foss, proposed an innovative method of
deploying a filter, via a cloud-based service that consumers could
access using a simultaneous ring feature on their current telephones.
The other two winners tackled the problem of caller ID spoofing in
novel ways; they each designed their own mechanisms that can help
determine whether an incoming call's caller ID information is authentic
or not. I believe the three winning solutions represent real
breakthroughs compared with what is currently available in the
marketplace.
Question 3. The United States Telecom Association, at the hearing,
said its member companies work with various law enforcement agencies,
including the FTC, to prosecute individuals and entities responsible
for fraudulent robocalls. Would this be an accurate assessment of the
industry from the FTC's point of view?
Answer. Many of the members of the United States Telecom
Association do assist us with investigations of those responsible for
illegal robocalls, and we greatly appreciate this assistance. As I
stated in my testimony, I do believe that carriers could be more
proactive in identifying suspicious activities on their networks that
could be indicative of illegal robocalling.
Question 4. What percent of the FTC's investigations into potential
violations of your telemarketing and robocall rules are initiated by
information voluntarily submitted by industry to your agency? Since the
establishment of the National Do Not Call Registry, how many times have
telecommunications providers alerted the FTC to potential violations of
either your telemarketing rules or robocall rules?
Answer. Generally speaking, industry players have not proactively
alerted the FTC to potential violations of our rules. The more common
scenario is that our attorneys or investigators contact a carrier about
a potential rule violation, and the carrier then assists us in
obtaining available information about that particular call campaign.
Question 5. The FTC and the FCC have clear rules establishing what
is, and what is not, allowable when it comes to robocalls, and both
agencies have taken enforcement actions to stop illegal robocalls. Yet
despite all of these efforts, intrusive and fraudulent robocalls have
proliferated. Technological solutions may very well provide the
American public with relief, but I also think that there is no
substitute for strong law enforcement. As such, I am interested in
learning further about the FTC's and the FCC's efforts and what more
can be done to stop illegal robocalls. What are the limitations your
agency faces in bringing more enforcement cases? Is there a need for
legislation to assist your efforts?
Answer. We do face challenges related to law enforcement against
illegal robocallers. Given automated dialing technology, inexpensive
long distance calling rates, and the ability to move internationally
and employ cheap labor, robocalling has become an attractive marketing
channel to fraudsters. And new technologies make it easy for
robocallers to hide their identities by spoofing and regularly changing
caller ID information, as well as by allowing them to generate calls
from any location in the world where they have access to an Internet
connection. In addition, a single call now traverses the networks of
many different service providers and no single entity knows the entire
path of a call; the result is that every entity must timely provide
data in order for law enforcers to successfully trace a call. These
factors, among others, make investigation and enforcement increasingly
difficult and time-consuming.
Separate from these challenges, and as I stated in my testimony, I
believe the common carrier exemption is outdated and unnecessary. The
telecommunications industry has become much more complex and
diversified, and the line between what is and is not a carrier has
blurred significantly. Currently, numerous entities participate in
delivering the robocall, including the associated caller ID
information, and not all of their functions fit squarely into the
categories of carrier or non-carrier. It would be far more efficient if
the FTC could address illegal telemarketers and those who facilitate
their activities without having to determine which of the entities that
participated in a single call campaign might be considered common
carriers. In other words, the exemption creates an obstacle to
effective law enforcement efforts against robocallers. For these
reasons and in this context, I support elimination of the common
carrier exemption.
______
Response to Written Questions Submitted by Hon. Amy Klobuchar to
Lois Greisman
Question 1. I want to applaud the FTC for undertaking the
``Robocall challenge'' as an innovative way for government to work with
the private sector and software engineers to find solutions. Ms.
Greisman, can you discuss the process for the challenge and how you
chose the awardees? What is the next step for the FTC in encouraging
getting these products to market and helping to fight fraud?
Answer. The Robocall Challenge was the FTC's first public contest
under the America COMPETES Reauthorization Act of 2010. One of our
first steps involved choosing three experts to judge the challenge. Two
of our judges were the Chief Technologists from the FTC and the Federal
Communications Commission--Steve Bellovin and Henning Schulzrinne--who
both have extensive technical backgrounds in telecommunications, Voice
over Internet Protocol (``VoIP'') technology, and security. The third
judge was Kara Swisher, one of the co-founders of All Things Digital
and someone who has broad expertise regarding consumer technology
products and the consumer experience. The judges helped determine the
judging criteria, which were: 1) Does it work? (50 percent); 2) Is it
easy to use? (25 percent); and 3) Can it be rolled out? (25 percent).
For more information regarding these criteria, please visit this
website: http://robocall.challenge.gov/details/criteria.
We publicly announced the Robocall Challenge on October 18, 2012,
and submissions were due by January 17, 2013. We received 798 eligible
submissions. Pursuant to the official rules, an internal panel screened
these submissions to determine, in accordance with the judging
criteria, which submissions warranted further review by the judges. The
internal panel identified 266 submissions that were then reviewed by
the expert judging panel. Following numerous meetings and discussions,
the judges chose seven finalists and assigned numerical scores to each.
Two engineers from Google won the nonmonetary award in the large
organization category. The judges found a tie within the category of
individuals and small organizations; thus, the two winners split the
$50,000 prize.
The goal of the challenge was to stimulate the marketplace and
encourage the development of new ideas. The FTC does not take an active
role in bringing the winning solutions to the market and does not
endorse particular consumer products. To identify and reward the
challenge winners and promote the challenge as a tool to spur
innovation in the marketplace, we held a press conference and produced
videos about the challenge. Through these means and related efforts, we
think we have helped to encourage innovators to focus their talents on
developing a technical solution to the problem of illegal robocalls.
Question 2. Ms. Greisman and Mr. Bash, we know that technology will
continue to evolve. How are the FTC and the FCC working to keep up with
these evolutions in communications to protect consumers from future
scamming operations?
Answer. We issued the Robocall Challenge to spur technological
innovations that would complement our law enforcement efforts to
protect consumers from scammers. As we looked at the marketplace in the
context of e-mail spam, we saw numerous experts deploying technological
solutions to protect consumers against spammers and fraudsters, but
relatively little focus on robocalls. Through the challenge, we sought
to bring more attention to illegal robocalls and prompt rich and vital
initiatives to address the problem. I believe that the challenge
accomplished this goal and that the winners' sophisticated filters and
other similar products can significantly enhance consumer protection.
Notably, none of the four technology experts who created the winning
solutions had ever worked on the robocall problem before. I will add
that while the challenge spurred nearly 800 innovators to submit
proposals, it also prompted others to go to the drawing table. We have
heard that the FTC's recent robocall initiatives gave other
entrepreneurs new connections and ideas to fight illegal robocalls,
which is an important ripple effect. We hope this will help stimulate
the market to develop technology that will combat telephone spam,
similar to efforts to develop technology to reduce e-mail spam.
In addition, we work to ensure that our internal team at the FTC
keeps up with the ongoing evolution of communications technology. For
example, we regularly speak to and work with technical experts who can
help us understand evolving technology, including academics, industry
insiders, and entrepreneurs. We partner with internationally renowned
technological associations--such as the Messaging, Malware and Mobile
Anti-Abuse Working Group and the Internet Engineering Task Force--to
work toward a longer-term goal of changing the telephone network
protocols to allow for authenticated telephone calls. We also use our
evolving knowledge to innovate with respect to our own law enforcement
investigations and targeting. As one public example, last October we
announced our new robocall honeypot, which is a group of phone numbers
that allows the FTC to receive robocalls directly and helps the agency
gather evidence and take quick action.
______
Response to Written Questions Submitted by Hon. Mark Warner to
Lois Greisman
Question 1. Over the past year or so, my office has seen a marked
increase in calls and letters regarding possible abuses by some
telemarketers. Since January 2013, my office has heard from more than
300 people requesting assistance with the Do Not Call List, and since
taking office in 2009, my office has heard from over 1200 people on
this issue. A small sampling of some of the concerns we have received
are also included in this document for the record.*
---------------------------------------------------------------------------
\*\ Selected Constituent Robocall Concerns
``It is an invasion of our privacy, and it ties up our phones and
disrupts our lives to get as many as 15 calls every single day when we
have been on the donotcall list since day 1. Anything you can do about
this issue will be greatly appreciated.''
--Constituent from Arlington, VA 5/26/2012
``I am registered on the ``Do Not Call'' list for my home phone
(not cellphone) and I am still getting many solicitation ``robo calls''
for lower credit card rates, car warranties, and other commercial
products. Some callers block caller ID. I systematically report these
callers via the ``report a violator'' process on the Registry website.
I have been on the do-not-call registry since its inception, and I have
verified this on the Registry site. I also put my elderly mother's home
phone number on the DNC Registry several years ago. She also gets many
solicitation calls. I am well versed on the types of calls that the DNC
system is supposed to address, and the kinds of calls that are
excepted. I am astonished at the number of calls I am getting even as I
am on the DNC list.''
--Constituent from Fairfax, VA 05/04/2012
``xxx-xxx-xxxx [redacted]. This number continues to call with
impunity, even though they are on my FTC Do Not Call Registry, and
several other residents I'm friends with. They are scam artists, trying
to mine personal information, and the FTC hasn't responded to my
concerns. Are you game for going after this group of obvious scammers,
because a lot of vulnerable citizens, could be prey for their scam
which involves lowering debt. They call themselves [redacted], and they
are a company I and others have never done business with. Thank you
kindly.''
--Constituent from Fairfax, VA 06/06/2012
``I have been getting calls on my home phone from a 'Credit Card
Services' for over a year now. I have submitted at least five
complaints on the FTC website and at least two complaints' on the 'Do
Not Call' website. I have asked to speak to a supervisor numerous
times, only to be hung up on. I have told them over and over and over
again to not call me. I have threatened them with FTC complaints. I
have received over 30 calls from this company and have turned in many
complaints to the Federal Trade Commission and nothing seems to work.
If you look on the internet, you will see tens of thousands of
complaints. Therefore, I would like to request that you (my
congressmen) get the Federal Trade Commission to do their job and shut
these people down.''
--Constituent from Alexandria, VA 07/23/2012
``Over the last couple of months, I've been getting an increasing
number of robo-dialer/recorded commercial calls in violation of the Do-
Not-Call registry. Many have been from the same 'crook', often ``Credit
Card Services.'' I've reported most of them on the FTC's Do Not Call
registry. (That is not counting the growing number of political calls,
which unfortunately are not violations of Do Not Call).''
--Constituent from Reston, VA 08/20/2012
``Senator--Please have someone on your staff Google (xxx)xxx-xxxx
[redacted] and you will see several websites dedicated to complaints
about harassing phone calls from this number asking if we want to
refinance our VA loan. We have been on the Do Not Call list since 2006
and have asked them to stop calling us 6-8 times a day. They pointedly
refuse to stop. This is not about freedom of speech, it is invasion of
privacy. I, on behalf of many, many people request my Federal
Government figure a way to make these people stop calling over and over
again.''
--Constituent from Yorktown, VA 08/27/2012
``My name is [redacted] and I reside in Charlottesville, VA. I am
in the fourth grade. I am writing to ask that you help by intervening
in the issue of unsolicited phone calls. Our number is on the Do Not
Call list. In the last two days we've received three such calls.''
--Constituent from Charlottesville, VA 05/23/2012
---------------------------------------------------------------------------
As a supporter of the Do Not Call Act, I sympathize with the
frustration of my constituents. I recognize that the same technology
that is allowing telephone service providers to more efficiently manage
networks is also enabling disreputable callers to abuse the system.
Still, it seems to me that if we can't find a technical solution to
abusive telemarketing calls, that raises many serious questions as
well. I encourage you to think more creatively about possible
solutions, and about any legislative authorities that would better
enable the FTC to keep pace with technology. For instance, have similar
problems occurred in other countries? If so, are there any solutions
adopted in other markets that might be applicable in the U.S.?
Answer. Yes, the same problems are occurring in other countries. We
have undertaken a global search for solutions, and we did identify the
``Telemarketing Guard'' by Primus Telecommunications Canada, whose
Chief Technology Officer Matthew Stein testified on July 10 after also
appearing at our Robocall Summit the previous fall. We have actively
encouraged carriers and others to bring Telemarketing Guard or a
similar solution to consumers in the United States. Telemarketing Guard
is currently only available to approximately one million Canadian
consumers.
Unfortunately, we are unaware of successful solutions that have
been more broadly adopted in other countries. Instead, the FTC is
actively participating in a joint search for such solutions. Our Office
of International Affairs (``OIA'') coordinates with our international
counterparts on related issues. For example, our OIA participates in
several multinational networks that coordinate on broad strategic
matters related to illegal telemarketing, including through the London
Action Plan (``LAP'') on international spam enforcement cooperation and
the Centre of Operations Linked to Telemarketing. Through our
involvement in the LAP's Do Not Call Working Group, we are actively
engaged with the multinational organization's initiatives to develop an
international strategy related to caller ID spoofing. One example is
the LAP's upcoming October meeting, which is being held in coordination
with the Messaging, Malware and Mobile Anti-Abuse Working Group. The
FTC, with the Canadian Radio-television and Telecommunications
Commission and the Australian Communications and Media Authority, will
lead a discussion of proposed solutions--technological, policy and
enforcement--that can be considered for global telecommunications
systems. Also at that meeting, we are leading a panel on telephony
abuse, which includes caller ID spoofing.
We are also fully engaged with international communities of
technical experts that are working to address this problem, such as the
Internet Engineering Task Force. In addition, we have collaborated with
foreign law enforcement authorities on particular cases, for example
working closely with Canadian law enforcement on FTC v. Direct
Financial Management, Inc., No. 10 C 7194 (N.D. Ill. Feb. 8, 2012), and
FTC v. Economic Relief Technologies, LLC, No. 1:09-cv-03347 (N.D. Ga.
Jul. 22, 2010).
Question 2. In 2012, the Federal Trade Commission (FTC) challenged
innovators to come up with a solution that would block illegal
commercial robocalls on landlines and mobile phones. One of the
proposed solutions creates a filtering system, similar to an e-mail
spam filter, that intercepts and filters out illegal robocalls using a
technology that ``blacklists'' and ``whitelists'' phone numbers. The
proposal envisions a consumer-facing system, however, others have
suggested that a network-based system might be more efficient and less
burdensome for consumers.
Do you believe that a filtering system would be effective? If so,
do you believe it should be implemented by networks or by consumers? If
not, do you have ideas for a better solution?
Answer. I believe effective solutions for blocking illegal
robocalls could be based on any number of possible technical
approaches. An effective solution might, for example, be based on
filtering, and could be designed to be implemented by networks,
consumers, or otherwise. However, it is important to consider not only
whether the proposed solutions would be effective to block illegal
robocalls, but also whether they would be easy to use, and whether they
could be rolled out in a timely manner. For example, a network-based
solution could require extensive investment and active participation by
carriers, which might make such a solution more difficult to roll out
than a solution that consumers could implement on their own, with
little or no reliance on carriers. In any event, the FTC actively
encourages carriers to pursue all efforts to curb illegal robocalls,
regardless of the specific technical approach or approaches adopted.
______
Response to Written Questions Submitted by Hon. Dan Coats to
Lois Greisman
Question 1. I commend the work the Federal Communications
Commission (FCC) and the Federal Trade Commission (FTC) have done in
establishing a national Do-Not-Call Registry pursuant to their
authorities under the Telephone Consumer Protection Act (TCPA). The
registry is nationwide in scope, applies to all telemarketers (with the
exception of certain non-profit organizations), and covers both
interstate and intrastate telemarketing calls. Recently, I have heard a
number of concerns from my state regarding the regulation of high
volume auto-dialer initiated voice over Internet protocol (VOIP)
``broadcasted'' calls. My understanding is that these calls can put
10,000 calls per minute onto Indiana's landline telephone network, by
using VOIP technology, in an attempt to get around Indiana's Do Not
Call List. Does the technology exist to identify these high volume,
auto-dialer initiated calls in real time?
Answer. I am not currently aware of any such identification
technology that is broadly available to U.S. consumers. There are
certain call-blocking ``apps'' that work only on wireless smartphones.
The FTC launched the Robocall Challenge to encourage parties to create
solutions that would identify and block illegal, high-volume,
autodialed calls, which are generally made using voice over Internet
protocol technology. The Challenge was designed to stimulate the
marketplace to put such technological solutions into the hands of U.S.
consumers, and we believe it was enormously fruitful. The winning
solutions, including that of Aaron Foss, who testified at the hearing
on July 10th, contained promising ideas about how to address illegal
robocalls using a combination of call pattern analytics and crowd-
sourced data.
Question 1a. My understanding is that when phone calls are made,
there are usually two user-facing identifiable pieces of information: a
phone number and a Caller ID Name (CNAM). I understand that the CNAM
can be used to display the calling party's name alongside the phone
number, to help users easily identify a caller. I have also been told
that there are numerous CNAM lookup services which allow you to pay a
small fee to lookup the CNAM of a specified caller (by phone number).
Do any mechanisms exist to prevent telemarketers from blocking CNAM
lookups by individuals?
Answer. I am unaware of any technological mechanisms that would
prevent telemarketers from blocking CNAM lookups by individuals.
However, with certain limited exceptions, a telemarketer violates the
FTC's Telemarketing Sales Rule (TSR) if it fails to transmit an
accurate telephone number and, when made available by the
telemarketer's carrier, its CNAM, to any caller identification service
used by the call recipient. 16 C.F.R. 310.4(a)(8). Thus, telemarketers
violate the TSR if they block their telephone numbers, causing a
consumer's caller ID or telephone to show ``blocked'' or
``unavailable.'' In addition, it is illegal to assist and facilitate a
practice prohibited by the TSR; such liability attaches if the entity
knows or consciously avoids knowing of the prohibited activity. 16
C.F.R. 310.3(b). As a result, carriers or CNAM lookup services that
help telemarketers hide their identities by providing false caller ID
information or blocking the telemarketers' phone numbers, or that
otherwise facilitate illegal activity, may be liable under the TSR.
______
Response to Written Questions Submitted by Hon. Claire McCaskill to
Eric J. Bash
Question 1. The FTC focuses on deceptive telemarketing through the
lens of consumer protection. The FCC, as regulator of the
telecommunications industry, brings its expertise on the wireline and
wireless telephone networks themselves. Does the FCC have any concerns
about or see any barriers to the winning technological solutions chosen
by the FTC?
Answer. Henning Schulzrinne, the FCC's Chief Technology Officer,
was one of three judges who determined the winners of the FTC-sponsored
competition. Other FCC staff members have also spoken informally with
the winners of the FTC Robocall Challenge to gain a better
understanding of their winning ideas. We understand that the winning
ideas are currently in the development or implementation phases. While
there are questions about some details, including whether caller ID
spoofing may affect their use of caller ID information to identify
robocallers, we believe the ideas are promising. The competition
explicitly focused on ideas that could be implemented quickly, even if
they could not suppress all illegal robocalls. Longer term approaches
that increase the trustworthiness of caller ID information may make
solutions such as those identified in the FTC-sponsored competition
work even better.
Question 2. At the hearing, you said that additional legislation
could be useful to better enforce against individuals or entities that
provide or facilitate phony numbers used to spoof caller IDs. You also
mentioned that the FCC has previously suggested revising the Truth in
Caller ID Act to give the FCC direct regulatory authority over so-
called third-party spoofing providers. From your agency's perspective,
would changing the Truth in Caller ID Act be the most effective way for
the FCC to help stop caller ID spoofing? Are there any other
legislative solutions the FCC believes would better equip it to take
enforcement actions against such entities or individuals?
Answer. In addition to recommending that Congress give the FCC
authority to regulate third-party spoofing providers, the FCC has also
suggested that Congress expand the Truth in Caller ID Act in several
other ways, by:
broadening the scope of the statute to prohibit spoofing by
persons outside of the United States when directed at people
inside the United States;
clarifying whether the existing restrictions should apply to
Voice over Internet Protocol providers that enable only
outbound calls; and
stating explicitly that text messaging is covered by the
statute.
The FCC recommended that Congress take these additional steps to
secure the integrity of telephone numbers as a reliable identifier of a
call's origin, particularly as VoIP technology increasingly replaces
the traditional technologies upon which telecommunication service is
widely based, and as text messaging increasingly supplements voice
communications.
Technological solutions that empower consumers to block illegal
robocalls so that they do not receive them in the first instance may
also be helpful in thwarting illegal robocalls. An industry standards
organization is currently working with FCC technology staff to design a
system whereby originating carriers and certain VoIP callers would
cryptographically sign calls so that receiving carriers can validate
that callers in fact have the right to use the telephone number they
are using. The Commission staff hopes that the joint effort may lead to
implementable specifications in about a year.
Question 3. The FCC's distinction in its rules for wireline and
wireless phones stems from the Telephone Consumer Protection Act of
1991. Needless to say, the wireless industry has changed dramatically
since then. Would revisiting that statute to eliminate the
anachronistic distinction be something that would allow the FCC to be
more aggressive in taking on fraudulent robocalls?
Answer. The restrictions on robocalls in the Telephone Consumer
Protection Act (TCPA) and the FCC's implementing rules are generally
stricter for calls to wireless numbers than to wireline/residential
ones. Section 227(b)(1)(A) of the TCPA and FCC rules prohibit non-
emergency autodialed or prerecorded calls to wireless numbers,
regardless of content, without prior express consent. Section
227(b)(1)(B) and FCC rules prohibit prerecorded telemarketing calls to
residential/wireline numbers without prior express consent. Neither
autodialed calls nor purely informational calls are covered by the
latter provision concerning calls to residential lines. (Note that the
TCPA does not distinguish between fraudulent robocalls and other
robocalls, for either residential/landline or wireless numbers; as
such, while the Commission is certainly very concerned about fraudulent
robocalls, whether a call is fraudulent is not an element of legal
analysis under the TCPA.)
In light of increasing consumer reliance on wireless services since
the TCPA was enacted more than twenty years ago, the distinctions in
the statute between wireless and residential/wireline numbers may well
be outdated. These distinctions can be a source of confusion to
consumers, complicate compliance efforts for law-abiding callers and
marketers, and introduce additional steps for law enforcement, in terms
of both the factual discovery and legal analysis needed to investigate
and pursue those who violate the law. As a result, harmonizing the
legal standards that apply to robocalls to residential/wireline and
wireless numbers may well benefit consumers, callers and telemarketers,
as well as law enforcement.
Question 4. What are the limitations your agency faces in bringing
more enforcement cases? Is there a need for legislation to assist your
efforts?
Answer. As discussed at the hearing, two major impediments to the
FCC taking stronger enforcement action against illegal robocallers are
the difficulty of identifying wrongdoers, and limitations on the FCC's
power. Amendments to the Truth in Caller ID Act such as those the FCC
has proposed (see above), coupled with development and implementation
of technological means to improve caller ID authentication (also
discussed above), would help to address the first of the FCC's
enforcement challenges. Congress could enhance the FCC's enforcement
powers against illegal robocallers by making it easier for the agency
to impose significant forfeitures, in at least three ways: (1) allow
the FCC to impose a forfeiture on a non-licensee robocaller without
first issuing a citation; (2) extend the current statute of limitations
from one year to at least two; (3) increase the maximum forfeiture that
the agency can impose on non-licensee robocallers.
______
Response to Written Question Submitted by Hon. Amy Klobuchar to
Eric J. Bash
Question. Ms. Greisman and Mr. Bash, we know that technology will
continue to evolve. How are the FTC and the FCC working to keep up with
these evolutions in communications to protect consumers from future
scamming operations?
Answer. The Commission recognized in 2003 and 2008 orders that
``[i]t is clear from the statutory language and the legislative history
that Congress anticipated that the FCC, under its TCPA rulemaking
authority, might need to consider changes in technologies.'' In those
orders, the Commission made it clear that as automated calling moved
away from random or sequential dialing, the TCPA could still be applied
to newer or different calling technologies, including predictive
dialers that relied more primarily on defined lists of telephone
numbers rather than random or sequential dialing. We will continue to
monitor and address new technologies in this area as warranted, and
Commission staff is actively fostering industry standards that, in the
long term, should help to reduce the number of illegal robocalls and
the malicious caller ID spoofing often associated with them. In the
short term, we also plan to work with key telecommunication providers
to address the problem of consumers being inundated with calls if their
numbers happen to be used as caller ID by illegal robocallers.
______
Response to Written Questions Submitted by Hon. Mark Warner to
Eric J. Bash
Question 1. Over the past year or so, my office has seen a marked
increase in calls and letters regarding possible abuses by some
telemarketers. Since January 2013, my office has heard from more than
300 people requesting assistance with the Do Not Call List, and since
taking office in 2009, my office has heard from over 1200 people on
this issue. A small sampling of some of the concerns we have received
are also included in this document for the record.*
---------------------------------------------------------------------------
\*\ Selected Constituent Robocall Concerns
``It is an invasion of our privacy, and it ties up our phones and
disrupts our lives to get as many as 15 calls every single day when we
have been on the donotcall list since day 1. Anything you can do about
this issue will be greatly appreciated.''
--Constituent from Arlington, VA 5/26/2012
``I am registered on the ``Do Not Call'' list for my home phone
(not cellphone) and I am still getting many solicitation ``robo calls''
for lower credit card rates, car warranties, and other commercial
products. Some callers block caller ID. I systematically report these
callers via the ``report a violator'' process on the Registry website.
I have been on the do-not-call registry since its inception, and I have
verified this on the Registry site. I also put my elderly mother's home
phone number on the DNC Registry several years ago. She also gets many
solicitation calls. I am well versed on the types of calls that the DNC
system is supposed to address, and the kinds of calls that are
excepted. I am astonished at the number of calls I am getting even as I
am on the DNC list.''
--Constituent from Fairfax, VA 05/04/2012
``xxx-xxx-xxxx [redacted]. This number continues to call with
impunity, even though they are on my FTC Do Not Call Registry, and
several other residents I'm friends with. They are scam artists, trying
to mine personal information, and the FTC hasn't responded to my
concerns. Are you game for going after this group of obvious scammers,
because a lot of vulnerable citizens, could be prey for their scam
which involves lowering debt. They call themselves [redacted], and they
are a company I and others have never done business with. Thank you
kindly.''
--Constituent from Fairfax, VA 06/06/2012
``I have been getting calls on my home phone from a 'Credit Card
Services' for over a year now. I have submitted at least five
complaints on the FTC website and at least two complaints' on the 'Do
Not Call' website. I have asked to speak to a supervisor numerous
times, only to be hung up on. I have told them over and over and over
again to not call me. I have threatened them with FTC complaints. I
have received over 30 calls from this company and have turned in many
complaints to the Federal Trade Commission and nothing seems to work.
If you look on the internet, you will see tens of thousands of
complaints. Therefore, I would like to request that you (my
congressmen) get the Federal Trade Commission to do their job and shut
these people down.''
--Constituent from Alexandria, VA 07/23/2012
``Over the last couple of months, I've been getting an increasing
number of robo-dialer/recorded commercial calls in violation of the Do-
Not-Call registry. Many have been from the same 'crook', often ``Credit
Card Services.'' I've reported most of them on the FTC's Do Not Call
registry. (That is not counting the growing number of political calls,
which unfortunately are not violations of Do Not Call).''
--Constituent from Reston, VA 08/20/2012
``Senator--Please have someone on your staff Google (xxx)xxx-xxxx
[redacted] and you will see several websites dedicated to complaints
about harassing phone calls from this number asking if we want to
refinance our VA loan. We have been on the Do Not Call list since 2006
and have asked them to stop calling us 6-8 times a day. They pointedly
refuse to stop. This is not about freedom of speech, it is invasion of
privacy. I, on behalf of many, many people request my Federal
Government figure a way to make these people stop calling over and over
again.''
--Constituent from Yorktown, VA 08/27/2012
``My name is [redacted] and I reside in Charlottesville, VA. I am
in the fourth grade. I am writing to ask that you help by intervening
in the issue of unsolicited phone calls. Our number is on the Do Not
Call list. In the last two days we've received three such calls.''
--Constituent from Charlottesville, VA 05/23/2012
---------------------------------------------------------------------------
As a supporter of the Do Not Call Act, I sympathize with the
frustration of my constituents. I recognize that the same technology
that is allowing telephone service providers to more efficiently manage
networks is also enabling disreputable callers to abuse the system.
Still, it seems to me that if we can't find a technical solution to
abusive telemarketing calls, that raises many serious questions as
well. I encourage you to think more creatively about possible
solutions, and about any legislative authorities that would better
enable the FTC to keep pace with technology. For instance, have similar
problems occurred in other countries? If so, are there any solutions
adopted in other markets that might be applicable in the U.S.?
Answer. The Commission staff has previously discussed telemarketing
and related consumer issues with its Canadian counterparts, to the
mutual benefit of both groups. Our recent research shows that, in
addition to Canada, the United Kingdom, Australia, and India have all
addressed problems with unwanted telemarketing calls to consumers. For
example, the UK has a ``Telephone Preference Service,'' which appears
to be similar to our National Do-Not-Call Registry. Similarly, India
and Australia also have do-not-call lists. In the UK, a technology is
available that blocks all calls until the caller enters an identifying
phone number, thereby establishing that the call is a human-originated
call rather than a robocall. In Canada, a blocking service has been
implemented that is aimed at stopping unwanted calls from known
robocall or telemarketer numbers, based, in part, on filtering
technology that relies on telemarketers identified by consumers (i.e.,
crowd-sourced). While we must, of course, focus on the specific
statutory requirements of the TCPA, we will also continue to monitor
the situations in other countries to ensure that we are aware of
solutions that they may develop to problems that we have in common.
Question 2. In 2012, the Federal Trade Commission (FTC) challenged
innovators to come up with a solution that would block illegal
commercial robocalls on landlines and mobile phones. One of the
proposed solutions creates a filtering system, similar to an e-mail
spam filter, that intercepts and filters out illegal robocalls using a
technology that ``blacklists'' and ``whitelists'' phone numbers. The
proposal envisions a consumer-facing system, however, others have
suggested that a network-based system might be more efficient and less
burdensome for consumers. Do you believe that a filtering system would
be effective? If so, do you believe it should be implemented by
networks or by consumers? If not, do you have ideas for a better
solution?
Answer. The FCC staff spoke informally with the winners of the FTC
Robocall Challenge, and we understand that the winning ideas are
currently in the development or implementation phases. There are
questions about some details, including whether caller ID spoofing may
affect their use of caller ID information to identify robocallers, and
they may work better if the integrity of caller ID can be improved. We
will continue to monitor the progress of these proposed solutions,
including whether they should be implemented on telecommunications
networks or by consumers, or through a combination of the two
approaches. We will also work with telecommunication service providers
to encourage the development of open interfaces that allow third-party
services to offer innovative ways for consumers to manage their
incoming phone calls.
______
Response to Written Questions Submitted by Hon. Dan Coats to
Eric J. Bash
Question 1. I commend the work the Federal Communications
Commission (FCC) and the Federal Trade Commission (FTC) have done in
establishing a national Do-Not-Call Registry pursuant to their
authorities under the Telephone Consumer Protection Act (TCPA). The
registry is nationwide in scope, applies to all telemarketers (with the
exception of certain non-profit organizations), and covers both
interstate and intrastate telemarketing calls. Recently, I have heard a
number of concerns from my state regarding the regulation of high
volume auto-dialer initiated voice over Internet protocol (VOIP)
``broadcasted'' calls. My understanding is that these calls can put
10,000 calls per minute onto Indiana's landline telephone network, by
using VOIP technology, in an attempt to get around Indiana's Do Not
Call List. Does the technology exist to identify these high volume,
auto-dialer initiated calls in real time?
Answer. Technology exists that can identify--and block--a high-
volume of calls in certain instances, such as calls originating from a
single number, or sharing the same electronic signature, such as call
length, call source and destination numbers, or certain VoIP call
attributes. Large businesses often purchase this type of technology to
protect their corporate networks from voice SPAM, VoIP Denial of
Service attacks, and other activities the business seeks to prevent.
Question 1a. My understanding is that when phone calls are made,
there are usually two user-facing identifiable pieces of information: a
phone number and a Caller ID Name (CNAM). I understand that the CNAM
can be used to display the calling party's name alongside the phone
number, to help users easily identify a caller. I have also been told
that there are numerous CNAM lookup services which allow you to pay a
small fee to lookup the CNAM of a specified caller (by phone number).
Do any prohibitions exist to prevent this practice by telemarketers?
Answer. CNAM databases link Calling Party Numbers (CPNs) to the
individuals and entities to whom the numbers have been assigned. Some
terminating providers maintain their own CNAM database and others
purchase CNAM database services from third-party providers that
aggregate the listing information from a variety of sources. Typically
this aggregation is done with real-time information feeds and may
involve a chain of feeds through several layers of providers and
resellers. When a phone call is made, Caller ID services often dip into
the CNAM database to look up the name or other identifying information
of the caller. We are not aware of any specific legal restrictions
prohibiting access to CNAM databases. Commission staff would be happy
to discuss these issues in further detail with your staff.
______
Response to Written Questions Submitted by Hon. Claire McCaskill to
Kevin G. Rupy
Question 1. Your member companies are by no means the problem, but
I believe your industry should be more proactive in being part of the
solution if we are going to seriously address the proliferation of
fraudulent robocalls. In your testimony, you described past and present
actions of providers to help combat the problem. Do you believe your
industry has done as much as it could or should to assist law
enforcement and consumers? Why or why not?
Answer. Yes, we believe our industry does as much as it can to
assist both law enforcement and consumers in this regard. The
telecommunications industry is, along with the consumer, a victim of
unwanted calls that annoy consumers and diminish the value and
stability of telecommunications services. Unfortunately, a large number
of criminals, now able to use cybercrime techniques and international
boundaries to evade national jurisdiction, present challenges to law
enforcement, consumers and industry alike. The telecommunications
industry is highly motivated to control abuse, and is responding to the
growth of abuse by creating the right technologies, systems and
processes to mitigate it. Industry is not only assisting, but in most
cases leading enforcement, technology development and collaborative
actions needed to address this issue.
USTelecom members have long worked collectively and coordinated
with private and government stakeholders to address issues relating to
illegal robocalls. For example, in a 2010 FTC action against a
robocaller that in one year made more than 370 million calls to
consumers nationwide, the agency specifically acknowledged the help
that USTelecom member companies AT&T and Verizon provided in the
investigation and resolution of the case.
In terms of assistance to our customers, no area is more
challenging to address than mass calling events originating outside of
our networks over multiple IP-based platforms using spoofed caller ID,
many of which involved auto-dialers or pre-recorded human voices, often
referred to as robocalls. Since no technology currently exists that
enables carriers to identify in real time whether any single call
traversing their network is legitimate or illegitimate, it is not
currently practical to deploy services that can identify the illegal
robocall needle in the high-volume call traffic haystack. As reflected
in Attachment One, carriers have no way of distinguishing between legal
or illegal robocalls that may be terminating on their network--only the
consumer is in a position to make that determination.
Nevertheless, carriers do their best to protect their customers in
the context of suspicious mass calling events, as outlined in greater
detail in our answer to your next question. Our members have long been
providing--and will continue to develop--various services consumers can
use to help mitigate the robocall problem. The scope and availability
of these services differ by carrier, but may include basic caller-ID
functionality, conditional call-forwarding, anonymous call-blocking,
block lists and other related services. Unfortunately, these services
are susceptible to evasion by caller-ID spoofing, which can be
accomplished at relatively low cost from anywhere in the world using
readily available technologies such as a personal computer and free
software.
Question 2. Mr. Rupy, you explained at the hearing that your member
companies' network operations centers monitor call traffic over their
networks and initiate investigations into suspicious mass-calling
events. You also added that your member companies address such
suspicious mass-calling events through different measures. Could you
provide specific details on what measures your member companies take
when they notice a suspicious mass-calling event?
Answer. As discussed in our testimony, many USTelecom member
companies maintain network operations centers that monitor network
traffic, conduct traffic data forensics and initiate mass-calling
investigations. During suspected mass-calling events, providers can
undertake various measures to mitigate their effect, including routing
traffic to an alternate tandem, and coordinating with the providers
sending the incoming traffic. For example, when a carrier realizes that
a connecting provider is sending an unusually large amount of traffic
onto its network, it may contact the connecting provider to request
that its customer cease generating the traffic. Of course, given the
interconnected nature of the Internet and the public switched telephone
network, the company delivering the large call-traffic volume may be
only one of several intermediaries simply passing along traffic
received from yet another provider.
Finally, many companies maintain call fraud bureaus that will
initiate investigations after a suspected mass calling event. Using
traffic data forensics and other investigative tools, providers will
try to identify the parties behind a particular mass calling event.
When they can identify the entities behind these calls, USTelecom's
members have sued the perpetrators, and often engage law enforcement
agencies and the Federal Trade Commission to investigate and prosecute
illegal robocall incidents.
Question 3. What issues, specifically, with regards to robocalls
are the standards-setting groups you cited in your testimony addressing
that would better protect American consumers from fraudulent robocalls?
What kinds of solutions and best practices have been and will be
adopted by industry members to address the robocall problem?
Answer. USTelecom's member companies have an extensive record of
working with standards-setting groups and other industry associations
to address robocalls. In particular, they have worked with and continue
to work with the Alliance for Telecommunications Industry Solutions
(ATIS) to develop standards and best practices to address the robocall
problem, with the Internet Engineering Task Force (IETF) to develop
standards for secure call authentication and with the Communications
Fraud Control Association (CFCA) to combat communications fraud.
ATIS has developed various guidelines and best practices that help
network management personnel address traffic management issues that may
arise during mass calling events. For example, ATIS helped public
safety agencies optimize their deployment of Emergency Notification
Systems to better ensure call completion without overwhelming affected
networks. ATIS has also published reference information for responsible
companies on the use of auto-dialers, and will publish an updated
section related to network security later this year. ATIS is also
planning to update existing documents as they relate to the deployment
of next generation networks in order to address various network
management issues, including mass calling events.
The IETF is the standards organization responsible for most Voice
over Internet Protocol (VoIP) standards. The IETF has formed an active
Secure Telephone Identity Revisited (STIR) Working Group, whose
priority will be to develop standards for use in IP-based
communications networks for authenticating callers.
Through public-private partnerships like the CFCA, industry
stakeholders work alongside law enforcement to identify best practices
and solutions to a broad range of telecommunications-related issues,
including robocalls. Given its collaborative public-private nature, the
CFCA fosters critical relationships between individual industry
stakeholders and law enforcement. These professional relationships are
crucial to investigating and prosecuting individuals that engage in
fraudulent activities occurring over communications networks, including
illegal robocalls.
The CFCA also provides a forum for industry stakeholders and law
enforcement to coordinate on issues relating to the latest scams,
evolving investigations and cases, and other related fraud matters.
This invaluable coordination increases the abilities of public and
private stakeholders to stay ahead of the constantly evolving robocall
environment, and thereby more effectively combat the bad actors
operating in this area.
Question 4. In their written and oral testimony, witnesses from the
FTC and the FCC proposed a number of statutory changes that would
better equip their agencies to combat fraudulent robocalls. For
inclusion in the hearing record, I ask that you provide your comments
on the following proposed statutory changes by September 9, 2013:
Elimination of the Federal Trade Commission Act's common carrier
exemption.
Answer. As Chairwoman McCaskill noted in her August 16, 2013 letter
to USTelecom, in the area of fraudulent robocalls ``America's
telecommunications providers are not the problem.'' We agree, and
believe that this makes the elimination of the common carrier exception
somewhat beside the point. Because the FCC already has full authority
to pursue appropriate remedies against carriers, USTelecom is concerned
that elimination of the common carrier exception could lead to
regulation of the communications industry by two separate agencies,
thereby creating the potential for duplicative or conflicting
regulatory requirements, resulting in additional consumer confusion and
frustration. More broadly, robocalls are among the many issues that
USTelecom maintains requires Congress to create a new framework that
reflects today's converged technological world.
Question 4a. Changes to the FCC's enforcement authorities
including:
Allowing the FCC to impose a forfeiture on non-licensee
robocalls violators without first issuing citation;
Answer. USTelecom supports full enforcement of relevant laws by
agencies against entities engaging in illegal robocall activities. The
FTC already has authority to enforce existing Do-Not-Call provisions,
including the authority to seek civil penalties, restitution for
victims of telemarketing scams and disgorgement of ill-gotten gains. As
discussed below, USTelecom believes that in lieu of incremental
approaches, Congress should instead focus on a new framework that
better reflects the realities of today's converged marketplace.
(b) Expanding the statute of limitations from one year to at least
two years; and
Answer. Given the immediacy of illegal robocalling incidents, the
current one year time-frame on the statute of limitations is sufficient
for ensuring that ample time is available to investigate and prosecute
such incidents.
(c) Increasing the maximum forfeiture that the FCC can impose on
non-licensee robocallers.
Answer. It is unlikely that increasing the maximum forfeiture
available to the FCC will favorably impact the proliferation of these
calls. In instances where such calls are originating from overseas, the
threat of increased forfeitures will likely have no effect on the
decision to engage in such activities. The better alternative is for
the FCC to more aggressively pursue and prosecute bad actors operating
in this area.
Question 4b. Revisions to the Truth-In-Caller ID Act [of 2009]
including:
Answer. In light of the evolving, interconnected and interdependent
global Internet network of networks, USTelecom cannot vouch for the
efficacy of any of these proposals. However, USTelecom supports
targeted and enhanced enforcement efforts that specifically target the
entities engaged in illegal robocall activity. USTelecom pledges to
continue to work with policymakers to address the problem and to
cooperate in government enforcement actions against firms and
individuals that abuse our open communications networks in order to
perpetrate fraud on consumers, enterprise, and carriers alike.
Expanding the scope of the prohibition to apply to persons
outside of the United States when spoofing is directed at
people inside the United States;
Answer. USTelecom does not support expanding the Truth in Caller-ID
Act of 2009 prohibitions to persons outside of the United States when
spoofing is directed at people inside the United States. Significant
jurisdictional issues would arise from the application of domestic law
to international operators, and it is therefore highly questionable
whether efforts to enforce such prohibitions would be effective. In
addition, it is possible that such an expansion of domestic law could
encourage other countries to pass extra-territorial laws to the
detriment of both consumers and U.S.-based companies providing
communications or other consumer services abroad.
(b) Clarifying whether the existing restrictions should apply to
VoIP providers that enable only outbound calls; and
Answer. USTelecom does not oppose the FCC clarifying that the
regulations relating to the Truth in Caller-ID Act of 2009 apply to
VoIP providers that enable only outbound calls, to the extent such an
ambiguity currently exists.
(c) Giving the FCC authority to regulate third-party spoofing
services.
Answer. The FCC already has the authority to regulate third-party
spoofing services. In its 2010 order addressing caller-ID spoofing, the
FCC declined to impose additional obligations on such third-party
caller ID services. It stated, however, that its decision to do so ``in
no way immunizes them from the obligation to comply with the Act.'' The
FCC further stated that where a third-party caller ID spoofing service
causes the transmission or display of false or misleading caller ID
information with the intent to defraud, cause harm, or wrongfully
obtain anything of value, ``such service will be in violation of the
Truth in Caller ID Act and our rules.''
The solutions proposed in each of these questions are at best
incremental approaches that reflect increasingly obsolete statutes in
the context of today's rapidly evolving technological world. Robocalls
are among the many issues that USTelecom maintains require Congress to
create a new framework reflecting today's converged technologies. It is
doubtful that the drafters of the Federal Trade Commission Act, the
Communications Act, the Telephone Consumer Protection Act, or other
similar statutes ever envisioned circumstances under which functionally
equivalent services would be regulated by separate Federal agencies,
sometimes applying different standards and consumer protections, even
though those services could be delivered through technologies that
often cannot be constrained by state or national boundaries. USTelecom
hopes the Committee will begin the process of developing legislation
that would remedy these types of circumstances with the goal of
developing a pro-consumer, pro-competitive framework for the
Information Age.
Attachment One
Attachment One (con't)
______
Response to Written Questions Submitted by Hon. Mark Warner to
Kevin G. Rupy
Question 1. Over the past year or so, my office has seen a marked
increase in calls and letters regarding possible abuses by some
telemarketers. Since January 2013, my office has heard from more than
300 people requesting assistance with the Do Not Call List, and since
taking office in 2009, my office has heard from over 1200 people on
this issue. A small sampling of some of the concerns we have received
are also included in this document for the record.*
---------------------------------------------------------------------------
\*\ Selected Constituent Robocall Concerns
``It is an invasion of our privacy, and it ties up our phones and
disrupts our lives to get as many as 15 calls every single day when we
have been on the donotcall list since day 1. Anything you can do about
this issue will be greatly appreciated.''
--Constituent from Arlington, VA 5/26/2012
``I am registered on the ``Do Not Call'' list for my home phone
(not cellphone) and I am still getting many solicitation ``robo calls''
for lower credit card rates, car warranties, and other commercial
products. Some callers block caller ID. I systematically report these
callers via the ``report a violator'' process on the Registry website.
I have been on the do-not-call registry since its inception, and I have
verified this on the Registry site. I also put my elderly mother's home
phone number on the DNC Registry several years ago. She also gets many
solicitation calls. I am well versed on the types of calls that the DNC
system is supposed to address, and the kinds of calls that are
excepted. I am astonished at the number of calls I am getting even as I
am on the DNC list.''
--Constituent from Fairfax, VA 05/04/2012
``xxx-xxx-xxxx [redacted]. This number continues to call with
impunity, even though they are on my FTC Do Not Call Registry, and
several other residents I'm friends with. They are scam artists, trying
to mine personal information, and the FTC hasn't responded to my
concerns. Are you game for going after this group of obvious scammers,
because a lot of vulnerable citizens, could be prey for their scam
which involves lowering debt. They call themselves [redacted], and they
are a company I and others have never done business with. Thank you
kindly.''
--Constituent from Fairfax, VA 06/06/2012
``I have been getting calls on my home phone from a 'Credit Card
Services' for over a year now. I have submitted at least five
complaints on the FTC website and at least two complaints' on the 'Do
Not Call' website. I have asked to speak to a supervisor numerous
times, only to be hung up on. I have told them over and over and over
again to not call me. I have threatened them with FTC complaints. I
have received over 30 calls from this company and have turned in many
complaints to the Federal Trade Commission and nothing seems to work.
If you look on the internet, you will see tens of thousands of
complaints. Therefore, I would like to request that you (my
congressmen) get the Federal Trade Commission to do their job and shut
these people down.''
--Constituent from Alexandria, VA 07/23/2012
``Over the last couple of months, I've been getting an increasing
number of robo-dialer/recorded commercial calls in violation of the Do-
Not-Call registry. Many have been from the same 'crook', often ``Credit
Card Services.'' I've reported most of them on the FTC's Do Not Call
registry. (That is not counting the growing number of political calls,
which unfortunately are not violations of Do Not Call).''
--Constituent from Reston, VA 08/20/2012
``Senator--Please have someone on your staff Google (xxx)xxx-xxxx
[redacted] and you will see several websites dedicated to complaints
about harassing phone calls from this number asking if we want to
refinance our VA loan. We have been on the Do Not Call list since 2006
and have asked them to stop calling us 6-8 times a day. They pointedly
refuse to stop. This is not about freedom of speech, it is invasion of
privacy. I, on behalf of many, many people request my Federal
Government figure a way to make these people stop calling over and over
again.''
--Constituent from Yorktown, VA 08/27/2012
``My name is [redacted] and I reside in Charlottesville, VA. I am
in the fourth grade. I am writing to ask that you help by intervening
in the issue of unsolicited phone calls. Our number is on the Do Not
Call list. In the last two days we've received three such calls.''
--Constituent from Charlottesville, VA 05/23/2012
---------------------------------------------------------------------------
As a supporter of the Do Not Call Act, I sympathize with the
frustration of my constituents. I recognize that the same technology
that is allowing telephone service providers to more efficiently manage
networks is also enabling disreputable callers to abuse the system.
Still, it seems to me that if we can't find a technical solution to
abusive telemarketing calls, that raises many serious questions as
well. I encourage you to think more creatively about possible
solutions, and about any legislative authorities that would better
enable the FTC to keep pace with technology. For instance, have similar
problems occurred in other countries? If so, are there any solutions
adopted in other markets that might be applicable in the U.S.?
Answer. Given the interdependent, interconnected, and global nature
of the Internet, we would suspect that unwanted robocalls are an
international issue. While USTelecom is not familiar with the
availability, effectiveness, or nature of solutions adopted in other
countries, the association and its member companies were interested in
the testimony that a Canadian company provided to the Subcommittee
regarding the deployment of a patented technology to address unwanted
robocalls. Our member companies are seeking more information about this
technology. However, as noted in our testimony and below, American law
governing common carrier and privacy obligations with regard to voice
telephone calls, together with consumers' historical needs and
expectations with regard to call completion, may not make every
international comparison useful, even if a particular solution can be
implemented under another nation's laws or traditions.
Question 2. In 2012, the Federal Trade Commission (FTC) challenged
innovators to come up with a solution that would block illegal
commercial robocalls on landlines and mobile phones. One of the
proposed solutions creates a filtering system, similar to an e-mail
spam filter, that intercepts and filters out illegal robocalls using a
technology that ``blacklists'' and ``whitelists'' phone numbers. The
proposal envisions a consumer-facing system, however, others have
suggested that a network-based system might be more efficient and less
burdensome for consumers. Do you believe that a filtering system would
be effective? If so, do you believe it should be implemented by
networks or by consumers? If not, do you have ideas for a better
solution?
Answer. Our member companies are providing--and will continue to
develop--various technologies and services to help mitigate the
robocall problem. These include basic caller-ID functionality, enhanced
caller authentication and authorization, conditional call-forwarding,
anonymous call-blocking, and other services that may vary by provider.
The rapid and ever-changing nature of the robocall problem,
however, makes the potential for a technological ``silver bullet,''
such as a filtering system, highly problematic. An open communications
network is inherently vulnerable to abuse. This abuse can be managed,
but (as explained below) only at the expense of some legitimate calls
being delayed or blocked. The existing legal framework for phone calls
under which USTelecom members operate generally does not permit such
delaying or blocking. For example, USTelecom member companies in recent
months have been working with Federal and state authorities on ways to
mitigate the effects of criminal Telephony Denial of Service (TDoS)
attacks directed towards public safety answering points (PSAPs). During
such events, telephone providers may implement corrective measures to
alleviate overwhelming call volumes. However, such corrective measures
cannot be applied more broadly. For example, in the event a carrier
inadvertently blocks a legitimate and critical robocall (e.g., one
originating from a public safety entity), the positive public service
aspects of such legitimate calls would be negated.
Therefore, policymakers should proceed cautiously when
contemplating the creation or facilitation of regimes using yet-to-be
developed technologies that could prevent critical--possibly life-
saving--information from reaching the public. This is particularly
challenging due to the relative ease with which illegal robocallers can
``spoof'' legitimate phone numbers. Spoofing technology can easily fool
consumers into taking calls they should avoid. For example, spoofing
the number of the local municipal hospital can dupe a senior citizen
into believing that a fraudulent effort to sell phony medical products
or services is actually a legitimate call from a whitelisted number. In
addition, solutions implementing call blocking features based upon a
whitelist could potentially block an important--albeit unexpected--
message from a legitimate caller. Conversely, solutions that rely
extensively on blocking calls populated by a blacklist could very well
result in the blocking of legitimate calls from callers whose own phone
numbers have been illegally spoofed.
The blocking of select phone calls based on CNAM data is fraught
with risk since it is impossible to identify legitimate robocalls from
illegitimate robocalls as they are occurring. In particular, public
safety agencies are increasingly using automated phone calls for
``push-911'' services. Such systems send a recorded message to phone
numbers en masse, listed and unlisted, in a geographical calling area.
They have been used by public safety entities to great effect, most
recently when residents of Watertown, Massachusetts, were advised by
public safety agencies to shelter in place when their neighborhood
became the epicenter of the manhunt for one of the Boston Marathon
bombing suspects.
Even non-public safety entities utilize robocalls for public safety
purposes. For example, KFOR-TV, the NBC affiliate for Oklahoma City,
Oklahoma, instituted the ``4Warn'' storm alert system, a free public
service that allows Oklahoma residents to opt in to receive a voice
message on their home, office or cell phone any time there is a tornado
warning issued in their county. More than 34,000 people have signed up
for the 4Warn service. During a 2010 tornado event, the service was
used to send more than 28,000 warnings in less than 24 hours.
A better solution to filtering, which appeared to be the consensus
of the regulatory participants in last fall's FTC robocall workshop,
would be the development of strong caller authentication and
authorization mechanisms within the industry that will enable better
management of the problem. The development of standards in this area
for use in IP-based communications networks is the priority of the STIR
Working Group recently activated within the IETF. However, such
solutions are dependent upon a full transition to IP-based
communications networks, a process that is currently in the early
stages.
______
Response to Written Questions Submitted by Hon. Dan Coats to
Kevin G. Rupy
Question 1. Does the technology exist to identify high volume,
auto-dialer initiated calls in real time?
Answer. While high-volume and random or sequential calling patterns
can be identified, there are no currently available technologies that
can reliably identify in real time whether calls are being initiated by
auto-dialers, or what types of software and/or hardware are being used
to initiate such calls. Moreover, given a mix of human-dialed calls
from individual consumers, call centers and similar mass-calling
locations (e.g., political campaign headquarters) and auto-dialer
initiated calls spoofing legitimate numbers, current technologies
cannot reliably distinguish between the two, nor between legal and
illegal mass calling events.
Question 2. Do any prohibitions exist to prevent a telemarketer
from purchasing CNAM data?
Answer. USTelecom is not aware of any existing statutory or
regulatory prohibitions preventing a telemarketer from purchasing CNAM
data.
______
Response to Written Question Submitted by Hon. Claire McCaskill to
Michael F. Altschul
Question. Your member companies are by no means the problem, but I
believe your industry should be more proactive in being part of the
solution if we are going to seriously address the proliferation of
fraudulent robocalls. In your testimony, you described past and present
actions of providers to help combat the problem. Do you believe your
industry has done as much as it could or should to assist law
enforcement and consumers? Why or why not?
Answer. The wireless industry is proud of its ongoing record of
providing assistance to law enforcement. In particular, the FTC has
noted the industry's assistance and cooperation (``The Commission would
like to acknowledge the extraordinary cooperation that
telecommunications carriers AT&T Mobility and Verizon Wireless provided
in the investigation of the case.'' See http://www.ftc.gov/opa/2009/05/
robocalls.shtm. Also, ``The FTC acknowledges the invaluable assistance
it received from Verizon Wireless, AT&T, and CTIA--The Wireless
Association in this matter.'' See http://www.ftc.gov/opa/2011/02/
loan.shtm.)
As I noted in my testimony, the wireless industry also has
conducted its own investigations and brought lawsuits under the TCPA
when they have been able to find the violators in the United States.
Unfortunately, carriers experience the same difficulties law
enforcement encounters in trying to trace calls to their source--these
robocallers ``spoof'' caller ID, use proxy servers, and route calls
through multiple networks, which, together, make it time consuming and
often impossible to trace the source of these calls back to their
origin.
______
Response to Written Questions Submitted by Hon. Mark Warner to
Michael F. Altschul
Question 1. Over the past year or so, my office has seen a marked
increase in calls and letters regarding possible abuses by some
telemarketers. Since January 2013, my office has heard from more than
300 people requesting assistance with the Do Not Call List, and since
taking office in 2009, my office has heard from over 1200 people on
this issue. A small sampling of some of the concerns we have received
are also included in this document for the record.*
---------------------------------------------------------------------------
\*\ Selected Constituent Robocall Concerns
``It is an invasion of our privacy, and it ties up our phones and
disrupts our lives to get as many as 15 calls every single day when we
have been on the donotcall list since day 1. Anything you can do about
this issue will be greatly appreciated.''
--Constituent from Arlington, VA 5/26/2012
``I am registered on the ``Do Not Call'' list for my home phone
(not cellphone) and I am still getting many solicitation ``robo calls''
for lower credit card rates, car warranties, and other commercial
products. Some callers block caller ID. I systematically report these
callers via the ``report a violator'' process on the Registry website.
I have been on the do-not-call registry since its inception, and I have
verified this on the Registry site. I also put my elderly mother's home
phone number on the DNC Registry several years ago. She also gets many
solicitation calls. I am well versed on the types of calls that the DNC
system is supposed to address, and the kinds of calls that are
excepted. I am astonished at the number of calls I am getting even as I
am on the DNC list.''
--Constituent from Fairfax, VA 05/04/2012
``xxx-xxx-xxxx [redacted]. This number continues to call with
impunity, even though they are on my FTC Do Not Call Registry, and
several other residents I'm friends with. They are scam artists, trying
to mine personal information, and the FTC hasn't responded to my
concerns. Are you game for going after this group of obvious scammers,
because a lot of vulnerable citizens, could be prey for their scam
which involves lowering debt. They call themselves [redacted], and they
are a company I and others have never done business with. Thank you
kindly.''
--Constituent from Fairfax, VA 06/06/2012
``I have been getting calls on my home phone from a 'Credit Card
Services' for over a year now. I have submitted at least five
complaints on the FTC website and at least two complaints' on the 'Do
Not Call' website. I have asked to speak to a supervisor numerous
times, only to be hung up on. I have told them over and over and over
again to not call me. I have threatened them with FTC complaints. I
have received over 30 calls from this company and have turned in many
complaints to the Federal Trade Commission and nothing seems to work.
If you look on the internet, you will see tens of thousands of
complaints. Therefore, I would like to request that you (my
congressmen) get the Federal Trade Commission to do their job and shut
these people down.''
--Constituent from Alexandria, VA 07/23/2012
``Over the last couple of months, I've been getting an increasing
number of robo-dialer/recorded commercial calls in violation of the Do-
Not-Call registry. Many have been from the same 'crook', often ``Credit
Card Services.'' I've reported most of them on the FTC's Do Not Call
registry. (That is not counting the growing number of political calls,
which unfortunately are not violations of Do Not Call).''
--Constituent from Reston, VA 08/20/2012
``Senator--Please have someone on your staff Google (xxx)xxx-xxxx
[redacted] and you will see several websites dedicated to complaints
about harassing phone calls from this number asking if we want to
refinance our VA loan. We have been on the Do Not Call list since 2006
and have asked them to stop calling us 6-8 times a day. They pointedly
refuse to stop. This is not about freedom of speech, it is invasion of
privacy. I, on behalf of many, many people request my Federal
Government figure a way to make these people stop calling over and over
again.''
--Constituent from Yorktown, VA 08/27/2012
``My name is [redacted] and I reside in Charlottesville, VA. I am
in the fourth grade. I am writing to ask that you help by intervening
in the issue of unsolicited phone calls. Our number is on the Do Not
Call list. In the last two days we've received three such calls.''
--Constituent from Charlottesville, VA 05/23/2012
---------------------------------------------------------------------------
As a supporter of the Do Not Call Act, I sympathize with the
frustration of my constituents. I recognize that the same technology
that is allowing telephone service providers to more efficiently manage
networks is also enabling disreputable callers to abuse the system.
Still, it seems to me that if we can't find a technical solution to
abusive telemarketing calls, that raises many serious questions as
well. I encourage you to think more creatively about possible
solutions, and about any legislative authorities that would better
enable the FTC to keep pace with technology. For instance, have similar
problems occurred in other countries? If so, are there any solutions
adopted in other markets that might be applicable in the U.S.?
Answer. Both in light of Primus' testimony at July's hearing and
the fact that many robocalling operations, when ultimately identified,
are located off-shore, it is likely that this phenomena has an
international dimension to it. However, because CTIA's focus is
domestic in nature, we do not have great familiarity with what
solutions or attempted solutions may have been used in other markets.
Additionally, even if technology solutions are deployed successfully in
other markets, they would need to be evaluated to determine whether
they could be deployed here in a manner that would be consistent with
wireless carriers' regulatory and legal obligations.
Question 2. In 2012, the Federal Trade Commission (FTC) challenged
innovators to come up with a solution that would block illegal
commercial robocalls on landlines and mobile phones. One of the
proposed solutions creates a filtering system, similar to an e-mail
spam filter, that intercepts and filters out illegal robocalls using a
technology that ``blacklists'' and ``whitelists'' phone numbers. The
proposal envisions a consumer-facing system, however, others have
suggested that a network-based system might be more efficient and less
burdensome for consumers. Do you believe that a filtering system would
be effective? If so, do you believe it should be implemented by
networks or by consumers? If not, do you have ideas for a better
solution?
Answer. Many of the filtering systems submitted for evaluation in
the FTC's ``Robocall Challenge'' contest were based on Caller ID, which
is easily spoofed, notwithstanding the fact that such spoofing is
illegal. Given this vulnerability, I am skeptical that they will work.
Additionally, to the extent that filtering systems were deployed at the
network level, they would require carriers to screen the content of
traffic addressed to their customers, something very likely to raise
privacy concerns. And finally, even if carriers screened traffic, it
could still be difficult to identify and separate ``bad'' robomessages
from ``good'' auto-dialed messages such as a high volume of identical
messages announcing airline flight delays or a school system letting
families know of a weather delay or cancellation.
______
Response to Written Questions Submitted by Hon. Dan Coats to
Michael F. Altschul
Question 1. I commend the work the Federal Communications
Commission (FCC) and the Federal Trade Commission (FTC) have done in
establishing a national Do-Not-Call Registry pursuant to their
authorities under the Telephone Consumer Protection Act (TCPA). The
registry is nationwide in scope, applies to all telemarketers (with the
exception of certain non-profit organizations), and covers both
interstate and intrastate telemarketing calls. Recently, I have heard a
number of concerns from my state regarding the regulation of high
volume auto-dialer initiated voice over Internet protocol (VOIP)
``broadcasted'' calls. My understanding is that these calls can put
10,000 calls per minute onto Indiana's landline telephone network, by
using VOIP technology, in an attempt to get around Indiana's Do Not
Call List. Does the technology exist to identify these high volume,
auto-dialer initiated calls in real time?
Answer. Network traffic management technologies exist that can
identify a high volume of calls delivered to a carrier at an
interconnection point. However, robo-callers can thwart these
technologies by routing calls over different paths, limiting the volume
of calls presented at any one point, using a mix of messages and a mix
of spoofed Caller ID addresses to disguise the common origin of these
calls. Moreover, there are lawful high volume auto-dialer calls sent
with the recipient's express consent (airline flight delays, school
closings, etc.) and there is no technology that provides real-time
identification of lawful versus unlawful high volume calls.
Question 1a. My understanding is that when phone calls are made,
there are usually two user-facing identifiable pieces of information: a
phone number and a Caller ID Name (CNAM). I understand that the CNAM
can be used to display the calling party's name alongside the phone
number, to help users easily identify a caller. I have also been told
that there are numerous CNAM lookup services which allow you to pay a
small fee to lookup the CNAM of a specified caller (by phone number).
Do any prohibitions exist to prevent this practice by telemarketers?
Answer. I am not aware of any such prohibitions, but question
whether such look-ups will be useful in changing the behavior of serial
robocallers, as those entities are most likely spoofing their numbers
to defeat Caller ID or routing traffic to make identification of its
origin difficult. See, for example, http://800notes.com/forum/ta-
19b1ccea03917e7/scammers-now-spoofing-good-phone-numbers and http://
www.cou
rthousenews.com/2011/08/16/39024.htm. Additionally, the blocking of
calls based on CNAM data could result in the blocking of legitimate
calls.
______
Response to Written Questions Submitted by Hon. Mark Warner to
Matthew Stein
Question 1. Over the past year or so, my office has seen a marked
increase in calls and letters regarding possible abuses by some
telemarketers. Since January 2013, my office has heard from more than
300 people requesting assistance with the Do Not Call List, and since
taking office in 2009, my office has heard from over 1200 people on
this issue. A small sampling of some of the concerns we have received
are also included in this document for the record.*
---------------------------------------------------------------------------
\*\ Selected Constituent Robocall Concerns
``It is an invasion of our privacy, and it ties up our phones and
disrupts our lives to get as many as 15 calls every single day when we
have been on the donotcall list since day 1. Anything you can do about
this issue will be greatly appreciated.''
--Constituent from Arlington, VA 5/26/2012
``I am registered on the ``Do Not Call'' list for my home phone
(not cellphone) and I am still getting many solicitation ``robo calls''
for lower credit card rates, car warranties, and other commercial
products. Some callers block caller ID. I systematically report these
callers via the ``report a violator'' process on the Registry website.
I have been on the do-not-call registry since its inception, and I have
verified this on the Registry site. I also put my elderly mother's home
phone number on the DNC Registry several years ago. She also gets many
solicitation calls. I am well versed on the types of calls that the DNC
system is supposed to address, and the kinds of calls that are
excepted. I am astonished at the number of calls I am getting even as I
am on the DNC list.''
--Constituent from Fairfax, VA 05/04/2012
``xxx-xxx-xxxx [redacted]. This number continues to call with
impunity, even though they are on my FTC Do Not Call Registry, and
several other residents I'm friends with. They are scam artists, trying
to mine personal information, and the FTC hasn't responded to my
concerns. Are you game for going after this group of obvious scammers,
because a lot of vulnerable citizens, could be prey for their scam
which involves lowering debt. They call themselves [redacted], and they
are a company I and others have never done business with. Thank you
kindly.''
--Constituent from Fairfax, VA 06/06/2012
``I have been getting calls on my home phone from a 'Credit Card
Services' for over a year now. I have submitted at least five
complaints on the FTC website and at least two complaints' on the 'Do
Not Call' website. I have asked to speak to a supervisor numerous
times, only to be hung up on. I have told them over and over and over
again to not call me. I have threatened them with FTC complaints. I
have received over 30 calls from this company and have turned in many
complaints to the Federal Trade Commission and nothing seems to work.
If you look on the internet, you will see tens of thousands of
complaints. Therefore, I would like to request that you (my
congressmen) get the Federal Trade Commission to do their job and shut
these people down.''
--Constituent from Alexandria, VA 07/23/2012
``Over the last couple of months, I've been getting an increasing
number of robo-dialer/recorded commercial calls in violation of the Do-
Not-Call registry. Many have been from the same 'crook', often ``Credit
Card Services.'' I've reported most of them on the FTC's Do Not Call
registry. (That is not counting the growing number of political calls,
which unfortunately are not violations of Do Not Call).''
--Constituent from Reston, VA 08/20/2012
``Senator--Please have someone on your staff Google (xxx)xxx-xxxx
[redacted] and you will see several websites dedicated to complaints
about harassing phone calls from this number asking if we want to
refinance our VA loan. We have been on the Do Not Call list since 2006
and have asked them to stop calling us 6-8 times a day. They pointedly
refuse to stop. This is not about freedom of speech, it is invasion of
privacy. I, on behalf of many, many people request my Federal
Government figure a way to make these people stop calling over and over
again.''
--Constituent from Yorktown, VA 08/27/2012
``My name is [redacted] and I reside in Charlottesville, VA. I am
in the fourth grade. I am writing to ask that you help by intervening
in the issue of unsolicited phone calls. Our number is on the Do Not
Call list. In the last two days we've received three such calls.''
--Constituent from Charlottesville, VA 05/23/2012
---------------------------------------------------------------------------
As a supporter of the Do Not Call Act, I sympathize with the
frustration of my constituents. I recognize that the same technology
that is allowing telephone service providers to more efficiently manage
networks is also enabling disreputable callers to abuse the system.
Still, it seems to me that if we can't find a technical solution to
abusive telemarketing calls, that raises many serious questions as
well. I encourage you to think more creatively about possible
solutions, and about any legislative authorities that would better
enable the FTC to keep pace with technology. For instance, have similar
problems occurred in other countries? If so, are there any solutions
adopted in other markets that might be applicable in the U.S.?
Answer. Primus Canada confirms that issues related to mass
unsolicited calling, including abusive telemarketing calls (together,
``telemarketing''), are not unique to the U.S. and are of a similar
significant concern to its customers in Canada. In response to these
concerns, Primus Canada invented, developed and deployed a patented
technological solution called Telemarketing Guard to assist its
customers with this issue.
Telemarketing Guard provides customers with control over how they
wish to deal with telemarketing calls. When a Primus Canada customer
receives a call identified as a telemarketing call by the Telemarketing
Guard system, the call is impeded and does not go directly to the
customer. Instead, a message is played advising that the customer does
not accept telemarketing calls and invites the caller to announce
themselves. The customer then has the choice to accept the call, refuse
the call or send the call to voice-mail.
Importantly, Telemarketing Guard uses the actions of customers to
identify potential unsolicited telemarketing calls. When a customer
receives an unscreened telemarketing call, the customer is able to
report the call to the Telemarketing Guard system. When a threshold of
customers reporting the same number is reached, the system begins to
monitor the calling phone number and applies a number of behavioral
characteristics (e.g., frequency of calling, time of day concentration,
sequential calling, etc.) to determine whether the call should be
identified as a telemarketing call on a going forward basis. In
essence, the system promotes and relies on customer engagement to
identify potential telemarketing calls.
Notably, the response by Primus Canada's customers has been
exceptional. Based on internal surveys, the service has increased
customer satisfaction and become one of the leading reasons that
customers choose to keep their phone service with Primus Canada.
Accordingly, Primus Canada is of the view that Telemarketing Guard
represents the very type of creative solution contemplated in this
Question for the Record.
Question 2. In 2012, the Federal Trade Commission (FTC) challenged
innovators to come up with a solution that would block illegal
commercial robocalls on landlines and mobile phones. One of the
proposed solutions creates a filtering system, similar to an e-mail
spam filter, that intercepts and filters out illegal robocalls using a
technology that ``blacklists'' and ``whitelists'' phone numbers. The
proposal envisions a consumer-facing system, however, others have
suggested that a network-based system might be more efficient and less
burdensome for consumers. Do you believe that a filtering system would
be effective? If so, do you believe it should be implemented by
networks or by consumers? If not, do you have ideas for a better
solution?
Answer. As noted in response to the first Question for the Record,
Primus Canada provides a service called Telemarketing Guard that
enables its customers to control how they wish to address mass
unsolicited calling (``telemarketing'').
Telemarketing Guard service is distinct from technologies that rely
on the use of blacklist and whitelists solutions (``list solutions'')
to intercept and filter out telemarketing calls, including illegal
robocalls, as it relies on dynamic information to identify potential
telemarketing calls. Specifically and as described in response to the
first Question for the Record, Telemarketing Guard uses the actions of
customers and the application of behavioural characteristics to
determine whether a call should be identified as a telemarketing call.
Primus Canada is of the view that the use of dynamic information
has a number of significant advantages relative to the reliance on the
type of static information that is generally associated with
administered list solutions. For example, the use of static information
requires significant manual administration, oversight and intervention.
This is necessitated by the fact that being placed on a blacklist has a
number of significant ramifications to the calling party. As a result,
a process is required to validate that a number should be blacklisted
to protect against the erroneous or mischievous reporting of telephone
numbers. A dispute process is also required to address claims that a
number should not have been, or should no longer be, placed on the
blacklist.
In comparison, the use of dynamic information by the Telemarketing
Guard system alleviates these concerns. For example, concerns of
erroneous or mischievous reporting are addressed as a call is
identified as a potential unsolicited call only after a threshold of
reports by customers is reached and behavioral characteristics are
applied. Similarly, dispute processes are not required as a number will
cease being identified as a potential unsolicited caller if customers
stop reporting calls from that number.
As for implementation, Primus Canada views Telemarketing Guard as
both a network-based and customer-facing solution. Indeed,
Telemarketing Guard relies on customer provided information and
engagement to identify telemarketing calls. Customers may also enable
and disable the service at will, though few select the latter option.
On the other hand, implementation in the network ensures that customers
can benefit from the service without, for example, having to purchase
equipment or software, actively participate in reporting or continually
update individual lists.
For these reasons, Primus Canada has selected to implement
Telemarketing Guard in its network and in a manner that relies on
dynamic information to identify potential telemarketing calls.
______
Response to Written Questions Submitted by Hon. Dan Coats to
Matthew Stein
I commend the work the Federal Communications Commission (FCC) and
the Federal Trade Commission (FTC) have done in establishing a national
Do-Not-Call Registry pursuant to their authorities under the Telephone
Consumer Protection Act (TCPA). The registry is nationwide in scope,
applies to all telemarketers (with the exception of certain non-profit
organizations), and covers both interstate and intrastate telemarketing
calls. Recently, I have heard a number of concerns from my state
regarding the regulation of high volume auto-dialer initiated voice
over Internet protocol (VOIP) ``broadcasted'' calls. My understanding
is that these calls can put 10,000 calls per minute onto Indiana's
landline telephone network, by using VOIP technology, in an attempt to
get around Indiana's Do Not Call List.
Question 1. Does the technology exist to identify these high
volume, auto-dialer initiated calls in real time?
Answer. Yes, the technology to identify and address high volume
auto-dialer initiated calls exists. In fact, Primus Canada has invented
and deployed a service since 2007 that enables its customers in Canada
to address such examples of mass unsolicited calling.
Primus Canada provides a service called Telemarketing Guard to all
of its telephone customers in Canada. This service enables its
customers to report a received telemarketing call (including auto-
dialer initiated calls) to the Telemarketing Guard system.
When a threshold of customers reporting the same number is reached,
the system begins to monitor the calling phone number and applies a
number of behavioral characteristics (e.g., frequency of calling, time
of day concentration, sequential calling, etc.) to determine whether
the call should be identified as a telemarketing call on a going
forward basis.
When a Primus Canada customer receives a call identified as a
telemarketing call by the system, the call is impeded and does not go
directly to the customer. Instead, a message is played advising that
the customer does not accept telemarketing calls and invites the caller
to announce themselves. The customer then has the choice to accept the
call, refuse the call or send the call to voice-mail.
Accordingly, in the example put forward in the question, the auto-
dialer initiated VoIP calls would be identified and impeded by the
Telemarketing Guard system when the threshold of customers reporting
the number is reached.
In essence, Telemarketing Guard promotes and relies on the choices
and actions of Primus Canada's customers to identify unwanted
telemarketing calls. If enough customers accept a call from an
identified telemarketer, the number will similarly cease to be
considered a telemarketing call by the Telemarketing Guard system.
Accordingly, Primus confirms that the technology exists to identify
high volume, auto-dialer initiated calls.
Question 2. My understanding is that when phone calls are made,
there are usually two user-facing identifiable pieces of information: a
phone number and a Caller ID Name (CNAM). I understand that the CNAM
can be used to display the calling party's name alongside the phone
number, to help users easily identify a caller. I have also been told
that there are numerous CNAM lookup services which allow you to pay a
small fee to lookup the CNAM of a specified caller (by phone number).
Do any prohibitions exist to prevent this practice by telemarketers?
Answer. Primus is not aware of any prohibitions that exist that
prevent this practice by telemarketers.
______
Response to Written Questions Submitted by Hon. Mark Warner to
Aaron Foss
Question 1. Over the past year or so, my office has seen a marked
increase in calls and letters regarding possible abuses by some
telemarketers. Since January 2013, my office has heard from more than
300 people requesting assistance with the Do Not Call List, and since
taking office in 2009, my office has heard from over 1200 people on
this issue. A small sampling of some of the concerns we have received
are also included in this document for the record.*
---------------------------------------------------------------------------
\*\ Selected Constituent Robocall Concerns
``It is an invasion of our privacy, and it ties up our phones and
disrupts our lives to get as many as 15 calls every single day when we
have been on the donotcall list since day 1. Anything you can do about
this issue will be greatly appreciated.''
--Constituent from Arlington, VA 5/26/2012
``I am registered on the ``Do Not Call'' list for my home phone
(not cellphone) and I am still getting many solicitation ``robo calls''
for lower credit card rates, car warranties, and other commercial
products. Some callers block caller ID. I systematically report these
callers via the ``report a violator'' process on the Registry website.
I have been on the do-not-call registry since its inception, and I have
verified this on the Registry site. I also put my elderly mother's home
phone number on the DNC Registry several years ago. She also gets many
solicitation calls. I am well versed on the types of calls that the DNC
system is supposed to address, and the kinds of calls that are
excepted. I am astonished at the number of calls I am getting even as I
am on the DNC list.''
--Constituent from Fairfax, VA 05/04/2012
``xxx-xxx-xxxx [redacted]. This number continues to call with
impunity, even though they are on my FTC Do Not Call Registry, and
several other residents I'm friends with. They are scam artists, trying
to mine personal information, and the FTC hasn't responded to my
concerns. Are you game for going after this group of obvious scammers,
because a lot of vulnerable citizens, could be prey for their scam
which involves lowering debt. They call themselves [redacted], and they
are a company I and others have never done business with. Thank you
kindly.''
--Constituent from Fairfax, VA 06/06/2012
``I have been getting calls on my home phone from a 'Credit Card
Services' for over a year now. I have submitted at least five
complaints on the FTC website and at least two complaints' on the 'Do
Not Call' website. I have asked to speak to a supervisor numerous
times, only to be hung up on. I have told them over and over and over
again to not call me. I have threatened them with FTC complaints. I
have received over 30 calls from this company and have turned in many
complaints to the Federal Trade Commission and nothing seems to work.
If you look on the internet, you will see tens of thousands of
complaints. Therefore, I would like to request that you (my
congressmen) get the Federal Trade Commission to do their job and shut
these people down.''
--Constituent from Alexandria, VA 07/23/2012
``Over the last couple of months, I've been getting an increasing
number of robo-dialer/recorded commercial calls in violation of the Do-
Not-Call registry. Many have been from the same 'crook', often ``Credit
Card Services.'' I've reported most of them on the FTC's Do Not Call
registry. (That is not counting the growing number of political calls,
which unfortunately are not violations of Do Not Call).''
--Constituent from Reston, VA 08/20/2012
``Senator--Please have someone on your staff Google (xxx)xxx-xxxx
[redacted] and you will see several websites dedicated to complaints
about harassing phone calls from this number asking if we want to
refinance our VA loan. We have been on the Do Not Call list since 2006
and have asked them to stop calling us 6-8 times a day. They pointedly
refuse to stop. This is not about freedom of speech, it is invasion of
privacy. I, on behalf of many, many people request my Federal
Government figure a way to make these people stop calling over and over
again.''
--Constituent from Yorktown, VA 08/27/2012
``My name is [redacted] and I reside in Charlottesville, VA. I am
in the fourth grade. I am writing to ask that you help by intervening
in the issue of unsolicited phone calls. Our number is on the Do Not
Call list. In the last two days we've received three such calls.''
--Constituent from Charlottesville, VA 05/23/2012
---------------------------------------------------------------------------
As a supporter of the Do Not Call Act, I sympathize with the
frustration of my constituents. I recognize that the same technology
that is allowing telephone service providers to more efficiently manage
networks is also enabling disreputable callers to abuse the system.
Still, it seems to me that if we can't find a technical solution to
abusive telemarketing calls, that raises many serious questions as
well. I encourage you to think more creatively about possible
solutions, and about any legislative authorities that would better
enable the FTC to keep pace with technology. For instance, have similar
problems occurred in other countries? If so, are there any solutions
adopted in other markets that might be applicable in the U.S.?
Answer. I am the co-winners of the FTC Robocall Challenge and I
think that there most definitely are technological solutions to this
problem. Many of the entries to the FTC Robocall Challenge had very
creative uses of inexpensive technology. Computer processing power is
getting faster and cheaper by the day. Building a system to fingerprint
robocaller calling patterns is definitely within reach.
Question 2. In 2012, the Federal Trade Commission (FTC) challenged
innovators to come up with a solution that would block illegal
commercial robocalls on landlines and mobile phones. One of the
proposed solutions creates a filtering system, similar to an e-mail
spam filter, that intercepts and filters out illegal robocalls using a
technology that ``blacklists'' and ``whitelists'' phone numbers. The
proposal envisions a consumer-facing system, however, others have
suggested that a network-based system might be more efficient and less
burdensome for consumers.
Do you believe that a filtering system would be effective? If so,
do you believe it should be implemented by networks or by consumers? If
not, do you have ideas for a better solution?
Answer. I do believe that a filtering system would be effective in
reducing the amount of robocalls that get to consumers' phones. Even
simple blocking techniques would dramatically reduce the number of
calls that interrupt and annoy consumers.
I believe that the solution should be jointly implemented by the
networks and consumers. The carriers should offer it as an additional
service, but it would have to be enabled (opt-in) by the consumer. Most
enhanced services such as call waiting and call forwarding are offered
this way today. Consumers should ultimately have the tools available to
them to block the calls that they don't want to receive.
______
Response to Written Questions Submitted by Hon. Dan Coats to
Aaron Foss
I commend the work the Federal Communications Commission (FCC) and
the Federal Trade Commission (FTC) have done in establishing a national
Do-Not-Call Registry pursuant to their authorities under the Telephone
Consumer Protection Act (TCPA). The registry is nationwide in scope,
applies to all telemarketers (with the exception of certain non-profit
organizations), and covers both interstate and intrastate telemarketing
calls. Recently, I have heard a number of concerns from my state
regarding the regulation of high volume auto-dialer initiated voice
over Internet protocol (VOIP) ``broadcasted'' calls. My understanding
is that these calls can put 10,000 calls per minute onto Indiana's
landline telephone network, by using VOIP technology, in an attempt to
get around Indiana's Do Not Call List.
Question 1. Does the technology exist to identify these high
volume, auto-dialer initiated calls in real time?
Answer. I think that there most definitely are technological
solutions to this problem. Many of the entries to the FTC Robocall
Challenge had very creative uses of inexpensive technology. Computer
processing power is getting faster and cheaper by the day. Building a
system to fingerprint robocaller calling patterns is definitely within
reach.
Question 2. My understanding is that when phone calls are made,
there are usually two user-facing identifiable pieces of information: a
phone number and a Caller ID Name (CNAM). I understand that the CNAM
can be used to display the calling party's name alongside the phone
number, to help users easily identify a caller. I have also been told
that there are numerous CNAM lookup services which allow you to pay a
small fee to lookup the CNAM of a specified caller (by phone number).
Do any prohibitions exist to prevent this practice by telemarketers?
Answer. I am aware of some companies that allow high-volume callers
to display customized CNAM data however I don't know about the legality
around this practice.