[Senate Hearing 115-806]
[From the U.S. Government Publishing Office]
S. Hrg. 115-806
ABUSIVE ROBOCALLS
AND HOW WE CAN STOP THEM
=======================================================================
HEARING
before the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
APRIL 18, 2018
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available online: http://www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
56-117 PDF WASHINGTON : 2024
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
JOHN THUNE, South Dakota, Chairman
ROGER WICKER, Mississippi BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri MARIA CANTWELL, Washington
TED CRUZ, Texas AMY KLOBUCHAR, Minnesota
DEB FISCHER, Nebraska RICHARD BLUMENTHAL, Connecticut
JERRY MORAN, Kansas BRIAN SCHATZ, Hawaii
DAN SULLIVAN, Alaska EDWARD MARKEY, Massachusetts
DEAN HELLER, Nevada TOM UDALL, New Mexico
JAMES INHOFE, Oklahoma GARY PETERS, Michigan
MIKE LEE, Utah TAMMY BALDWIN, Wisconsin
RON JOHNSON, Wisconsin TAMMY DUCKWORTH, Illinois
SHELLEY MOORE CAPITO, West Virginia MAGGIE HASSAN, New Hampshire
CORY GARDNER, Colorado CATHERINE CORTEZ MASTO, Nevada
TODD YOUNG, Indiana JON TESTER, Montana
Nick Rossi, Staff Director
Adrian Arnakis, Deputy Staff Director
Jason Van Beek, General Counsel
Kim Lipsky, Democratic Staff Director
Chris Day, Democratic Deputy Staff Director
Renae Black, Senior Counsel
C O N T E N T S
----------
Page
Hearing held on April 18, 2018................................... 1
Statement of Senator Thune....................................... 1
Letter dated April 16, 2018 to Hon. John Thune and Hon. Bill
Nelson from Marc Rotenberg, EPIC President; Alan Rotenberg,
EPIC Senior Counsel; and Christine Bannan, EPIC
Administrative Law and Policy Fellow....................... 96
Letter dated April 17, 2018 to Hon. John Thune and Hon. Bill
Nelson from Richard Hunt, President and CEO, Consumer
Bankers Association........................................ 98
Letter dated April 18, 2018 to Hon. John Thune and Hon. Bill
Nelson from Meredith Atwell Baker, President and CEO, CTIA. 99
Statement of Senator Blumenthal.................................. 3
Statement of Senator Markey...................................... 21
Statement of Senator Tester...................................... 24
Statement of Senator Klobuchar................................... 24
Statement of Senator Cortez Masto................................ 89
Statement of Senator Baldwin..................................... 93
Witnesses
Adrian Abramovich, Former President, Marketing Strategy Leaders
(Dissolved 1/29/2016).......................................... 4
Prepared statement........................................... 6
Rosemary Harold, Chief, Enforcement Bureau, Federal
Communications Commission...................................... 25
Prepared statement........................................... 27
Lois Greisman, Associate Director, Marketingerg, Practices
Division, Bureau of Consumer Protection, Federal Trade
Commission..................................................... 28
Prepared statement........................................... 30
Kevin Rupy, Vice President, Law and Policy, USTelecom............ 54
Prepared statement........................................... 56
Scott Delacourt, Partner, Wiley Rein LLP, On Behalf of the U.S.
Chamber Institute for Legal Reform............................. 58
Prepared statement........................................... 59
Margot Freeman Saunders, Senior Counsel, National Consumer Law
Center......................................................... 65
Prepared statement........................................... 67
Appendix
Letter dated April 17, 2018 to Hon. John Thune and Hon. Bill
Nelson from American Bankers Association, Consumer Bankers
Association, Credit Union National Association, Electronic
Transactions Association, Independent Community Bankers of
America, National Association of Federally-Insured Credit
Unions, National Council of Higher Education Resources, and
Student Loan Servicing Alliance................................ 103
Letter dated April 28, 2017 to Marlene H. Dortch, Secretary,
Federal Communications Commission from Brian Scarpelli, Senior
Policy Council, ACT | The App Association; Thomas E. Goode,
General Counsel, ATS; Krista L. Witanowski, Assistant Vice
President, Regulatory Affairs, CTIA; Kevin G. Rupy, Vice
President, Law & Policy, USTelecom............................. 104
Response to written questions submitted to Adrian Abramovich by:
Hon. Catherine Cortez Masto.................................. 122
Response to written questions submitted to Rosemary Harold by:
Hon. John Thune.............................................. 123
Hon. Maria Cantwell.......................................... 123
Hon. Catherine Cortez Masto.................................. 124
Response to written questions submitted to Lois Greisman by:
Hon. Maria Cantwell.......................................... 126
Hon. Tom Udall............................................... 127
Hon. Catherine Cortez Masto.................................. 127
Response to written questions submitted to Kevin Rupy by:
Hon. Maria Cantwell.......................................... 130
Hon. Richard Blumenthal...................................... 131
Hon. Tom Udall............................................... 131
Hon. Catherine Cortez Masto.................................. 133
Response to written questions submitted to Scott Delacourt by:
Hon. John Thune.............................................. 135
Hon. Maria Cantwell.......................................... 136
Hon. Catherine Cortez Masto.................................. 137
ABUSIVE ROBOCALLS
AND HOW WE CAN STOP THEM
----------
WEDNESDAY, APRIL 18, 2018
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 10:09 a.m. in
room SR-253, Russell Senate Office Building, Hon. John Thune,
Chairman of the Committee, presiding.
Present: Senators Thune [presiding], Wicker, Blunt, Heller,
Gardner, Blumenthal, Nelson, Cantwell, Klobuchar, Tester,
Udall, Baldwin, Markey, Peters, Hassan, and Cortez Masto.
OPENING STATEMENT OF HON. JOHN THUNE,
U.S. SENATOR FROM SOUTH DAKOTA
The Chairman. Good morning. In the United States Senate, we
often have heated disagreements over important issues facing
our country. Even in the Commerce Committee, which has a
longstanding tradition of reaching bipartisan compromise when
possible, we don't always see eye-to-eye when it comes to
contentious issues. But today we are here to address an issue
that I'm sure we can all agree on: unwanted, abusive, and
illegal robocalls have got to stop.
Unsolicited robocalls consistently rank among the top
consumer complaints to the Federal Trade Commission and the
Federal Communications Commission. Beyond just being annoying,
many of those who send out unwanted robocalls do so with the
intent to defraud consumers. As more phone systems move from
copper wires to the Internet, it has become easier and cheaper
for bad actors to make illegal robocalls from anywhere in the
world.
These new technologies have also made it easier for
scammers to hide from law enforcement and to seek to gain their
victims' trust by displaying fake caller ID information. Known
as ``spoofing,'' this technique allows a fraudulent call to
show up on recipients' caller ID as a number within their area
code, or even with many of the same digits as their own phone
number, making it appear like a trustworthy local number. I am
sure that many of us, as well as many of our constituents, have
experienced this phenomenon.
The goal of scammers using spoofed robocalls is often to
get money out of unsuspecting recipients, and some of their
methods can be particularly malicious. For instance, given that
yesterday was tax day, one common scam, especially at this time
of year, is the ``IRS scam.'' This scam involves the caller
pretending to represent the IRS in order to scare the victim
into providing money or personal information to avoid phony tax
penalties.
Perhaps the biggest negative effect of the increasing
prevalence of unwanted robocalls is that they frustrate
recipients to the point that they are less likely to answer
legitimate calls.
It's important to remember that robocalls are not
inherently negative. Many important services are carried out
via robocall where companies and call recipients have pre-
established relationships and where the consumer has agreed to
participate in these types of calls. Indeed, some entities,
like hospitals and pharmacies, use robocalls to remind a
patient of an upcoming appointment or that a prescription is
ready for pickup. In addition, automakers often use robocalls
to warn vehicle owners of urgent safety recalls. Missing calls
like these can have life-or-death consequences for recipients.
Today we have the opportunity to hear from enforcement
officials responsible for combating illegal robocallers and
from industry representatives who can speak to new methods for
preventing consumers from receiving unwanted calls in the first
place.
We also have the opportunity to hear from Mr. Adrian
Abramovich, who, according to the FCC, allegedly made almost
100 million robocalls in a three-month period in 2016.
On October 10, 2017, the Committee sent Mr. Abramovich a
letter of inquiry regarding the FCC's notice of apparent
liability, asking several questions about his conduct. On
November 3, 2017, through his counsel, Mr. Abramovich informed
the Committee that he would not be providing information in
response to the Committee's inquiry.
This past March, I invited Mr. Abramovich to appear
voluntarily for today's hearing, but through his counsel, he
declined. In light of Mr. Abramovich's decision to decline the
Committee's invitation and refusal to provide information in
response to the Committee's inquiry, a subpoena requiring Mr.
Abramovich's appearance before the Committee was issued.
Mr. Abramovich, your participation in today's hearing is
important. According to the FCC, you allegedly made nearly 100
million robocalls to American consumers purporting to be a
well-known travel or hospitality company, such as TripAdvisor,
Expedia, Marriott, or Hilton. If a robocall recipient answered
and pressed ``1'' for more information, the consumer would be
directed to a Mexican hotel and resort chain engaged in selling
timeshares and vacation packages that had contracted with you,
Mr. Abramovich, to receive calls generated by your network.
Mr. Abramovich, I expect that today you will shed some
light on your past conduct and provide the Committee with your
unique perspective on the technologies and practices behind
abusive robocalls. With this information, and that of the
second panel, the Committee should better understand this
problem and what steps might be necessary to end this abusive
practice.
Finally, before I turn to the Ranking Member, who today
Senator Blumenthal is serving in that role, I would like to
just note that the recent omnibus appropriations bill included
Committee-approved legislation he sponsored and I say ``he
sponsored,'' Senator Nelson, with Senators Fischer, Klobuchar,
Blunt, and Duckworth to empower the FCC to combat spoofing
originating from international locations. We'll be eager to
hear how new law will be implemented and what more needs to be
done.
So with that, I'm going to turn to Senator Blumenthal for
an opening statement.
STATEMENT OF HON. RICHARD BLUMENTHAL,
U.S. SENATOR FROM CONNECTICUT
Senator Blumenthal. Thank you, Senator Thune, and thank you
for having this hearing today, which deals with a pernicious
and prevalent problem. There is bipartisan loathing for
robocalls, and today we will hear from some of the government
officials who have responsibility for stopping them, but also
from someone who has been responsible, Mr. Abramovich, for
perpetrating them.
They are rightly abhorred by consumers. They are not only
oppressive and obnoxious, but they are extraordinarily
prevalent, despite enforcement efforts by the Federal Trade
Commission under existing law. The simple fact is that the Do
Not Call list is totally ineffectual against them. The evidence
is that consumers still are plagued with them.
And that is why today I am introducing the ROBOCOP bill,
Repeated Objectionable Bothering of Consumers on Phones Act.
The ROBOCOP bill will require phone companies to offer
effective tools to block robocalls to consumers at no extra
cost to them. At the same time, it will enable emergency calls
or others for legitimate purposes to continue as a robust
mechanism.
And I'm very proud to be joined by a number of my
colleagues, including Senator Markey, of this Committee, who
has been a leader, and Senator Baldwin, who is also on the
Committee.
I join Senator Thune in the hope that, Mr. Abramovich, you
will answer fully and completely the questions that we have for
you today. You have become the face of this problem. You may
think it is unjust, and that your appearance here today, as
you've said in your testimony, will impact your settlement with
the FCC.
But the fact of the matter is that you have a duty to
answer these questions, and Senator Thune has recited a
proposed fine of $120 million that the FCC has proposed. The
fine is a result of more than 100 million illegal robocalls
during a 3-month period in 2016. That is a phenomenal record of
consumer abuse. The robocalls involved in this campaign
displayed misleading or inaccurate caller ID information
designed to make the calls appear to be originated locally to
the recipient.
So I hope that you will help us, in fact, shed some light
on this problem and that you will explain any inability to
answer our questions. If you answer them selectively, you will,
of course, jeopardize your Fifth Amendment right if you wish to
invoke it, but you have an obligation to be forthcoming here
today and to help alleviate some of the harm that you have done
already. And I hope that we will learn more in support of the
legislation that I've introduced, the ROBOCOP bill, but also
other legislation that can take action against this continuing
and abusive consumer harm that literally hits everyone.
No one is immune from robocalls. Whether you own a cell
phone or a landline, there is no escaping them. Unwanted calls
reach our most vulnerable and susceptible populations,
particularly I know this as a member of the Special Committee
on Aging because seniors and older Americans are often
targeted, and they are often victims of the scams that are
advanced through robocalls.
In 2017, the FCC made it crystal clear that carriers can
identify and block these calls from known scam numbers, and I
hope that today's hearing will also result in more vigorous
enforcement of existing laws along with support for new laws
that will enable tougher penalties, stronger deterrents, and
better consumer protection.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Blumenthal.
Mr. Abramovich, I understand you have an opening statement.
And so we would ask you at this point to proceed with that.
Welcome.
STATEMENT OF ADRIAN ABRAMOVICH, FORMER PRESIDENT, MARKETING
STRATEGY LEADERS (DISSOLVED 1/29/2016)
Mr. Abramovich. Yes, sir.
Good morning to everyone. Chairman Thune, Ranking Member
Nelson, and other members of the Committee, my name is Adrian
Abramovich. I have been engaged in business with long distance
telephone providers, wireless services providers, and
conducting marketing activities for more than 15 years.
On June 22, 2007, the FCC initiated a forfeiture action
against me with a proposed penalty fine of $120 million and
alleging that I perpetrated one of the largest spoof robocall
campaign ever. These allegations obviously have generated
immense publicity, to the point that I am here today before a
Senate Committee of the United States of America.
In no way did I seek more publicity or to engage in public
discussion about the pending FCC action or my defenses. I filed
a response to the FCC, I denied engaging in the fraudulent
activities and the misrepresentation alleged by the FCC, and
sought to reduce the amount of the proposed forfeiture. It was
always my intent with the FCC to negotiate toward an
appropriate fine within my ability to pay such amount.
I did not come here today to testify because putting a
further spotlight on my pending case can only hurt my chances
to resolve this matter with the FCC. Having to come here today
will no doubt portray me as the face of these unwanted
robocalls, will prejudice my ongoing case with the FCC, and
might also incriminate me with potential criminal charges.
I am here now because the Committee served me with a
subpoena. Instead of refusing to answer questions, I will make
a good faith effort to answer questions within my industry-wide
knowledge of telemarketing and the type of calls you are
investigating. However, I will invoke my Fifth Amendment
privilege not to answer questions seeking specific factual
information regarding the allegations made by the FCC against
me. With regard to the FCC allegations, I will refer to and
incorporate my response to the FCC, which has been filed with
this Committee.
Because the FCC allegations will certainly be discussed
today, I will briefly address the main points of my defense.
I have denied and continue to deny any intent to defraud,
cause harm, or wrongfully obtain anything of value. The resorts
associated with telemarketing activities were indeed real
resorts, offering real vacation packages. The packages were
exclusively available to qualified persons, all the terms and
conditions were clearly explained, including the timeshare
presentation requirement. And the FCC does not cite a single
complaint about the quality of vacation, accommodation, of
amenities.
The extent of my activities has been significantly
overstated. I am not the king pin of robocalling that is
alleged. While the allegations made in my case might be the
biggest the FCC investigated, the FTC also regulates the
telemarketing activities and conducts enforcement. In my
response, I cite to several other cases involving as much or
more call volume than my case and the same exact spoofing.
One specific case is the Caribbean Cruise Line. This
specific case alleges that the defendants made 15 more daily
spoofed calls than the allegations against me, falsely claimed
that they were associated with a political survey, and falsely
claimed that the cruises were free, none of which is alleged in
my case.
In the Caribbean Cruise Line, the enforcement efforts
targeted all the participants in the autodial campaign,
including lead generation, travel provider, and the carrier. In
my case, I'm the only target, and my proposed fine is 10 times
all the fines imposed in the Caribbean Cruise case against all
the participants.
The effect on consumers has been also overstated in my
case. The amount of actual calls getting through to consumers
is much, much less than the number of calls dialed. Ninety
percent of the calls detailed by the FCC were less than a
minute. Less than 2 percent of any consumers have meaningful
interaction with these calls.
In an effort to help the Committee here today, I can
generally speak about these phone calls. One of the main issues
you have in addressing these calls is that the technology is
easy to obtain and can be used by anyone. There is available
open software that allows anyone to make thousands of automated
phone calls with a click of a button. This software is totally
customizable. But the biggest issue to stop robocall is the
availability of carriers to accommodate these type of calls.
There are companies that advertise on the web right now that
offer long distance carrier services for ``Dialer/Short
Duration Termination,'' also known as robocalls. To me, this is
where the enforcement needs to focus on to stop this activity.
In conclusion, as you have noticed today, English is not my
first language. And I have, of course, prepared this statement
with the assistance of my counsel. Throughout my questioning, I
might need for you to repeat or rephrase a question, and I
might also need to confer with my attorney prior to answering a
question. I will do my best to answer all your questions here
and to cooperate in this hearing.
Thank you.
[The prepared statement of Mr. Abramovich follows:]
Prepared Statement of Adrian Abramovich, Former President, Marketing
Strategy Leaders (Dissolved 1/29/2016)
Chairman Thune, Ranking Member Nelson and the other members of the
Committee:
Introduction
My name is Adrian Abramovich, I have been engaged in business with
long distance telephone providers, wireless service providers and
conducting marketing activities for more than 15 years. On June 22,
2017, the Federal Communications Commission initiated a forfeiture
action against me with a proposed penalty of $120,000,000 and alleging
that I perpetrated one of the largest spoofed robocall campaigns ever.
These allegations obviously have generated immense publicity, to the
point that I am here today before a Senate Committee of the United
States of America.
In no way did I seek more publicity or to engage in public
discussion about the pending FCC action or my defenses. I filed a
response to the FCC, I denied engaging in the fraudulent activities and
the misrepresentation alleged by the FCC and sought to reduce the
amount of the proposed forfeiture. It was always my intent with the FCC
to negotiate towards an appropriate fine within my ability to pay such
amount. (A copy of my June 27, 2017 ``Response'' is attached hereto as
Exhibit A).
I did not want to come here today to testify because putting a
further spotlight on my pending case can only hurt my chances to
resolve this matter with the FCC. Having to come here today will no
doubt portray me as the face of these robocalls, will prejudice my
ongoing case with the FCC and may also incriminate me with potential
criminal charges.
I am here now because the Committee served me with a subpoena.
Instead of refusing to answer questions, I will make a good faith
effort to answer questions within my industry wide knowledge of
telemarketing and the type of calls you are investigating. However, I
will invoke my 5th amendment privilege to not answer questions seeking
specific factual information regarding the allegations made by the FCC
against me. With regard to the FCC allegations I will refer to and
incorporate my Response to the FCC which has been filed with this
Committee.
Conduct Alleged by the FCC
Because the FCC allegations will certainly be discussed today, I
will briefly address the main points of my defense:
(a) I have denied and continue to deny any intent to defraud, cause
harm or wrongfully obtain anything of value. The resorts
associated with my telemarketing activities were indeed real
resorts, offering real vacation packages, the packages were
exclusively available only to qualified persons, all the terms
and conditions were clearly explained (including the timeshare
presentation requirement); and the FCC does not cite to a
single complaint about the quality of the vacation,
accommodations or amenities;
(b) The extent of my activities has been significantly overstated. I
am not the king pin of robocalling that is alleged. While the
allegations made in my case may be the biggest for the FCC, the
Federal Trade Commission also regulates telemarketing
activities and conducts enforcement. In my Response, I cite to
several other cases involving as much or more call volume than
my case and the exact same spoofing.
(c) One Specific case is the Caribbean Cruise Line case. This
specific case alleges that the defendants made 15 times more
daily spoofed robocalls than the allegations against me,
falsely claimed that they were associated with a political
survey, and falsely claimed that the cruises were free. None of
which is alleged in my case.
(d) In the Caribbean Cruise Line case, the enforcement efforts
targeted all the participants in the autodial campaign,
including lead generation, travel provider and the carrier. In
my case I am the only target and my proposed fine is ten times
all the fines imposed in the Caribbean Cruise case against all
the participants.
(e) The effect on consumers has also been overstated in my case. The
amount of actual calls getting through to consumers is much
less than the number of calls dialed. 96 percent of all calls
detailed by the FCC were less than 1 minute. The majority of
those do not bother anyone. Less than 2 percent of any
consumers have any meaningful interaction with these calls.
Information for the Committee
In an effort to help the committee here today. I can generally
speak about these phone calls and how to help limit them. One of the
main issues you have in addressing these calls is that the technology
is easy to obtain and can be used by anyone. Anyone can start a large
autodial campaign from a home office.
With regard to DIALING and SPOOFING
There is available open source software that can be misused by
someone to make thousands of automated phone calls with the click of a
button. This software is totally customizable based on the needs of any
particular campaign.
There are also hosted auto-dialer services that are harder to be
misused because of more control by the company, but they can still be
improperly used and regulation of these companies may help.
There are websites right now you can find on google that offer
volume pricing for using their ``robocalling'' system that can handle
``millions upon millions of calls''. I found these advertisements using
google a few days ago.
With regard to LONG DISTANCE PROVIDERS
Once you have this software all you need is to then install your
now customized auto-dialer platform to a cloud service and using the
right long distance company to start placing calls.
There are companies that advertise on the web right now that offer
long distance carrier service for ``Dialer/Short Duration Termination''
calls. These are robocalls. Clearly regulation needs to address the
carriers and providers and require the major carriers to detect
robocalls activity.
Conclusion
As you have notice today, English is not my first language, and I
have of course prepared this statement with the assistance of counsel.
Throughout my questioning I may need for you to repeat or rephrase a
question and I may also need to confer with my attorney prior to
answering a question. I will do my best to answer your questions here
today and to cooperate in this legislative hearing.
Exhibit A
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Mr. Abramovich.
Mr. Abramovich. Thank you.
The Chairman. In your prepared testimony, you say that you
have been engaged in business with long distance telephone
providers, wireless service providers, and conducting marketing
activities for more than 15 years.
Mr. Abramovich. Yes, sir.
The Chairman. How many robocalls would you estimate to have
made during that time?
Mr. Abramovich. I'm not going to answer that specific
question for my activities, and I invoke the privilege not to
answer, no.
The Chairman. In your prepared testimony, you state that
the effect on consumers has been overstated in your case
because fewer than 2 percent of consumers had a meaningful
interaction with these calls, and 2 percent perhaps sounds
small, but if the allegations against you are correct, that
means you made nearly 100 million robocalls during one 3-month
period.
Mr. Abramovich. Mm-hmm.
The Chairman. So 2 percent would be nearly 2 million
people. Over a year, that would be nearly 8 million people.
Mr. Abramovich. Mm-hmm.
The Chairman. Does that sound like a small effect on
consumers?
Mr. Abramovich. Again, I'm not here to talk about my
specific case. I invoke my privilege not to testify about
things that might be used against me in the forfeiture case.
But I can talk about general questions you might have about
robocallings, telemarketing activities, and maybe can give you
some insight on how those work.
I'm not prepared to discuss my specific case because I am
subject to a $120 million forfeiture against me right now. So I
cannot talk about my specific case. But I'm here on a good
faith effort to help the Committee to somehow come at these
robocalls.
The Chairman. Mr. Abramovich, based on the information that
you provided in your opening statement, I believe you may have
waived your Fifth Amendment privilege.
Mr. Abramovich. Hmm?
The Chairman. In fact, during your opening statement, you
just spoke in detail about the core issues under consideration
at this hearing. You cannot now claim privilege to avoid
answering questions on the subject matter contained in that
statement. You are also here under subpoena, and, therefore,
must answer. So if you refuse to answer this question, the
Committee may seek to hold you in contempt of Congress for
failing to respond.
Mr. Abramovich. Yes, but----
[Mr. Abramovich speaking with his counsel.]
Mr. Abramovich.--under advice of my Counsel, I'm not going
to answer specific questions.
The Chairman. All right. I'm going to try one more time,
and then I'm going to flip it to Senator Blumenthal.
Mr. Abramovich, the FCC alleges that your calls falsely
claim to be affiliated with well-known travel and hospitality
companies, including TripAdvisor, Expedia, Marriott, and
Hilton.
Mr. Abramovich. Mm-hmm.
The Chairman. However, in your prepared testimony, you
state that the resorts associated with your telemarketing
activities were indeed real resorts.
Mr. Abramovich. Mm-hmm.
The Chairman. Which resorts did you work with? Did
TripAdvisor, Expedia, Marriott, or Hilton ever authorize you to
use their names during these calls?
Mr. Abramovich. I never misrepresented any of those
hospitality companies. All the resorts are legitimate.
Everything was included in the vacations. There was no
fraudulent activity. The customers knew what packages they were
purchasing. It's not a good business practice call customers
saying that this is a promotion from Marriott, and then one of
the agents might come back and say, ``No, this is not Marriott,
this is another resort in Mexico,'' and this type of business
is not going to work. This is going to be flooded by
chargebacks by misrepresentation. So it's not going to work.
They are--on the web pages, everything is clearly stated.
They know what they're purchasing. They're getting discount
vacations because they're going to have a 90-minute timeshare
presentation. I mean, there is not a single complaint of
customers saying that they did not receive what they paid for.
The Chairman. The FCC alleges that you received payment for
your work, and your response to the FCC's charges, which you
submitted as an appendix to your testimony, you state that
lead-generating activities do not generate per-call revenue. So
how are you compensated?
Mr. Abramovich. This is a misunderstanding. Some companies
might offer a per-call service, which is very different. Those
companies usually use what they call the avatar service where
it's a voice recognition system, there is no robocalling
involved. And they, in fact, indeed get paid maybe a dollar or
two dollar per minute because they are somehow profiling the
client before they get transferred to a call center.
In my case, I cannot answer the question because it's
specific to my activities.
The Chairman. Do you know how many of those consumers
actually received the vacations that were pitched to them?
Mr. Abramovich. How many?
The Chairman. Yes.
Mr. Abramovich. Excuse me?
The Chairman. How many of the consumers that got calls
where they had vacations pitched to them, how many of them
actually received or took those vacations?
Mr. Abramovich. They all received the vacation. Let me
explain how it works. Once they are explained to about the
vacations and the hotels where they're going to stay, it's all-
inclusive, and the customer must submit a copy of their credit
cards. He has a voucher signed by the client accepting the
terms and conditions. If that document is not faxed back to the
resort or the company, they will eventually refund the money to
the client.
They must have a signature from the client accepting all
the terms and conditions for these packages. We cannot control
all the agents. In some cases, if the client is not happy with
the vacation or the services, they might call their credit card
company and get their money back. I mean, they are protected.
There is no fraud in this case.
The Chairman. Mr. Abramovich, can you explain what
neighborhood spoofing is?
Mr. Abramovich. Yes. Neighborhood spoofing is when you are
making a phone call and make it look like it's coming from your
local area.
The Chairman. Do you engage in that practice?
Mr. Abramovich. Again, I'm not going to answer questions
specific to my activities. Remember, I have a pending FCC
investigation forfeiture amount for $100 million. I might be
facing criminal fines.
The Chairman. Thank you.
Mr. Abramovich. I can give you some explanation, like I
said, general questions that you might have.
The Chairman. Just one final question. In your written
testimony, you state that regulation may help with respect to
hosted autodialer services and companies that provide long
distance carrier service. Can you comment on whether you think
that----
Mr. Abramovich. Yes. I was watching a lot of hearings on
the C-SPAN channel lately, and I think that they come with this
idea that they do not originate on the technological side. But
I think that the most important factor on these robocalls are
the voice over IP carriers that are advertising the short
duration call. When they advertise short duration call, that
means they're going to accept all the calls you can throw at
them. It doesn't matter what caller ID you use, they never ask.
It's going to be profitable for the long distance. For
example, if you call AT&T directly, they're not going to accept
that type of traffic because that type of company does not deal
with those type of calls. But if you call a small voice over IP
carrier, they're going to somehow blend the dialer traffic with
the conversational calls and make it look like everything is
normal. So that way they are fueling the robocalls.
And I think a good idea would be to focus on those five or
six companies that are actually offering services. And they
actually clearly state on the page, We accept short duration
call for robocalling. Start your company today. Prepayment
accepted. You can use any caller ID you want. And you can
customize the software too, spoofing is very easy. You can do
that within a day. It's very simple. So if those carriers allow
all those calls to go through, the major networks won't see
that the calls are coming from a robocaller.
The Chairman. Yes.
Senator Blumenthal.
Senator Blumenthal. Thanks, Mr. Chairman.
Mr. Abramovich, you say in your statement, quote, I have
denied and continue to deny any intent to defraud, cause harm,
or wrongfully obtain anything of value, end quote. That
statement relates to the activities involved in the FCC action,
does it not?
Mr. Abramovich. Yes. I have submitted my response to the
FCC as well as the Committee. And I have nothing additional----
Senator Blumenthal. Do you understand, Mr. Abramovich, that
that statement, in effect, is a response that waives a Fifth
Amendment privilege as to questions pertaining to those
activities?
Mr. Abramovich. May I consult with my lawyer for a second?
[Mr. Abramovich speaking with his counsel.]
Mr. Abramovich. I'm not a lawyer, and I cannot answer that
question.
Senator Blumenthal. You cannot selectively invoke a Fifth
Amendment privilege. You can't decide to answer some questions
and then decide you don't want to answer other questions about
the same activities involving the same legal culpability. Do
you understand that fact?
[Mr. Abramovich speaking with his counsel.]
Mr. Abramovich. Same answer. I'm not an attorney and----
Senator Blumenthal. Let me try a couple of specific
questions then, Mr. Abramovich. The robocalls involved in your
activities involved misleading or inaccurate information,
caller ID information, designed to make the calls seem like
they appeared from one location when in fact they came from
another, correct?
Mr. Abramovich. Well, most robocallers use that technology
because there's not a legal way to make a solicited phone call.
Senator Blumenthal. Doesn't that mislead the recipient of
the call as to location?
[Mr. Abramovich speaking with his counsel.]
Mr. Abramovich. I cannot speak to that and I'm not going to
answer that question.
Senator Blumenthal. You're invoking the Fifth Amendment?
Mr. Abramovich. I'm invoking the Fifth Amendment, yes. I
can't answer that----
Senator Blumenthal. Mr. Abramovich, the FCC has also
alleged that these calls were harmful to carriers.
Mr. Abramovich. To carriers?
Senator Blumenthal. Because they burdened or overwhelmed
networks, and they alienated customers of those carriers. Do
you deny it?
Mr. Abramovich. In general terms, I can talk about that.
They are actually small carriers?
Senator Blumenthal. No. I'm asking about your specific
activities.
Mr. Abramovich. But I cannot talk about my specific
activity.
Senator Blumenthal. But you've denied that there is any
harm to anyone from your activities, correct?
Mr. Abramovich. Um, I'm not denying there is no harm. What
I'm saying is that--Senator, you're asking about the carriers,
right? The carriers and the flood of the calls? I don't think
there is any harm to the carriers. They are actually offering
short duration calls. They know they are going to receive a
massive amount of calls, and then they're going to profit from
those calls.
Senator Blumenthal. So you're not invoking the Fifth
Amendment privilege as to that question.
Mr. Abramovich. Because it's in general terms.
Senator Blumenthal. No, I'm asking about your activities.
Did they cause harm to carriers?
Mr. Abramovich. I cannot answer to that question.
Senator Blumenthal. And I'm asking about your activities.
Isn't it a fact they caused harm to consumers?
Mr. Abramovich. I plead the Fifth Amendment. I cannot
answer to that question. Like I said earlier, I have a pending
investigation with the FCC, and all I say will probably hurt
me.
Senator Blumenthal. Let me ask you, What are the companies
that you used to undertake your robocalling operations?
Mr. Abramovich. Again, I invoke my Fifth Amendment.
Senator Blumenthal. Would you agree with me, Mr.
Abramovich, that some of the consumers who were called and
solicited for resort activities were unqualified?
Mr. Abramovich. In the timeshare industry, they are usually
looking for young people between the years of 30, 45 years old,
people that can actually buy a timeshare. There is no
obligation whatsoever.
Senator Blumenthal. In your activities, isn't it a fact
that some of the consumers who were called were unqualified for
those solicitations by their economic and income measures?
Mr. Abramovich. But I cannot talk about my activities,
Senator. I'm sorry.
Senator Blumenthal. Let me just finally ask you a question
about the impact of people who receive robocalls. I have heard
from many of my constituents, like many members of this panel,
about the intrusive and invasive effect of these calls. One was
Catherine Larson of Sandy Hook, Connecticut. She was getting an
average of 7 to 10 robocalls a day, and she had to take them
because her son was deployed abroad in the military. In fact,
he was in a war zone. She had to change her number, her phone
rang so often. The effect of these calls was pernicious and
intrusive. Can you say these robocalls harm no one?
Mr. Abramovich. Um----
Senator Blumenthal. That's what you say in your testimony.
Mr. Abramovich. Yes. From a general point of view, not from
my case, from a general point of view, I think bad guys like
Rachel or the IRS or the alarm companies, they are defrauding
customers. I think it might be harmful for consumers. But I
think there should be somehow a law where the good guys
offering solicitation over the phone should be able to make
some calls offering legitimate services or products where, for
example, the government might have some control over them, say,
``OK,'' for example, and just an idea, and I'm talking off the
top of my head. Okay, you're going to have this car or this,
this is what you're going to offer, this is the message that
you're going to play, right? And the government or the FTC can
have control at least of the good guys.
I mean, because this is the thing, when there's a robocall,
automatically they are criminals. They don't leave a message,
they're criminals, it's a scam. There are scams, but not all
are scams, some are legitimate people trying to sell something.
Senator Blumenthal. Well, it strikes me, Mr. Abramovich,
that without prejudging the result in your case, that a high
percentage of the calls were not only intrusive, but
potentially scams, and that's why the FCC has levied a fine
that is virtually unprecedented in its history, and that's why
you're here today. And although you say you are not the king
pin, certainly you're not the only one, but you are the face of
this problem today, and I am going to ask the Chairman to
consider a contempt proceeding because of your selective
invocation of the Fifth Amendment. And I thank you for being
here today.
The Chairman. Thank you, Senator Blumenthal.
Senator Markey evidently has a couple questions that he
would like to ask as well.
STATEMENT OF HON. EDWARD MARKEY,
U.S. SENATOR FROM MASSACHUSETTS
Senator Markey. Thank you, Mr. Chairman, very much.
Mr. Abramovich, you represent nearly 100 million reasons
why we need robust protections from the epidemic of robocalls
and robotexts afflicting the Nation. You and the companies you
control are alleged to have made almost 100 million spoofed
robocalls where you configured the calls in such a manner that
the caller ID suggested that the calls were local calls.
Mr. Abramovich. Mm-hmm.
Senator Markey. And that's what the Telephone Consumer
Protection Act of 1991 is designed to stop. I am the author of
that law, which you are charged with violating. And I support
the actions which the Federal Communications Commission has
taken to enforce my law. The efficiency and the magnitude of
your robocall campaign is truly historic. And you were able to
become the king pin of robocalls because these technologies are
so readily available and easily usable.
In your testimony, you stated that many of the calls you
orchestrated were only for a short duration, but that misses
the point, Mr. Abramovich. The interruption to consumers comes
the moment the phone starts to ring, whether it's during dinner
or it's at a time when you're on the go. That's what the
problem is. It might only last a minute, but it's a minute that
is completely disturbing to the receiver of the call. Do you
agree with that, Mr. Abramovich?
Mr. Abramovich. In a general context, I agree to that. I'm
not talking about specifics on my case, but I have been
receiving four or five robocalls a day from my local number
lately, and more after the FCC headlines, I'm receiving more
spoofed calls than ever, myself.
Senator Markey. And you don't like it when you get those
calls.
Mr. Abramovich. I just decline the call. I never answer the
phone.
Senator Markey. But do you understand why it irritates
people? Do you understand why they don't want these unwanted
calls, Mr. Abramovich?
Mr. Abramovich. Yes, I understand.
Senator Markey. Well, that's what this is all about. That's
what the intent of the law is meant to achieve, it's to protect
people at home, to protect people in their own privacy from
having unwanted calls come in. And your understanding of that
is obviously key, and your business model was obviously meant
to circumvent that sense of protection which people want.
So how easy would it be, Mr. Abramovich, for me to go back
to my office, download automated phone call technologies and
begin calling thousands of consumers with spoofed numbers? How
hard would that be?
Mr. Abramovich. How easy?
Senator Markey. Or how easy?
Mr. Abramovich. Right now, I understand that you, Senator,
asked how easy it was. You can find several options on the
Internet. For example, you have software that is open source,
it's totally customizable to your needs. All you do is Google,
and try for example, ``voice over IP provider, short duration
calls,'' and it will pop up probably five, six, seven, and most
of them are U.S.-based.
Senator Markey. How many people would I have to employ if I
wanted to make, say, 10,000 robocalls a day?
Mr. Abramovich. Uh, on the systems side?
Senator Markey. Yes.
Mr. Abramovich. I would say from the general knowledge that
I have, I would say one.
Senator Markey. One person.
Mr. Abramovich. One, and probably some technical support.
Senator Markey. And how would consumers stop these calls
absent an enforcement action by the Federal Communications
Commission?
Mr. Abramovich. Uh----
Senator Markey. Can they say, ``Stop''?
Mr. Abramovich. No. I heard some on the hearings that they
said that they tried to stop the voice over IP providers, and
they said it was tough because I guess there are so many. But
at the end of the day, the people who made those calls need the
voice over IP, which is not AT&T, Verizon, they are the
smallest ones. They're actually looking for that type of
business because it's lucrative. They can make easily $1 or $2
million a year just by charging the robocaller for those calls.
People say it's a penny of the dollar. Yes, but in such
amounts, generally speaking, it's a lot of money for the
carriers, and they just look the other way because it's
profitable for them.
Senator Markey. So you can make a lot of money compromising
the privacy of families all across America. And, you know, that
was the intent of the law that I authored, and that's what the
Federal Communications Commission is now enforcing. But here's
what I would say, because I led a letter with 14 of my Senate
colleagues today calling on Chairman Pai at the FCC to adopt
key protections: one, a comprehensive definition of
``autodialer,'' ensuring all callers must receive permission
before robocalling or robotexting a consumer, and preserving
consumers' right to revoke consent should they no longer wish
to receive calls or texts. I think that the Federal
Communications Commission needs to take that action as soon as
possible to stop the use of these technologies that harass
consumers. Would those actions help to limit, Mr. Abramovich--
--
Mr. Abramovich. This is----
Senator Markey.--the ability of companies to be able to
harass individuals?
Mr. Abramovich. There was a problem because a few years ago
before they came back with the express consent, it's the common
knowledge that the robocalls has been increasing over the years
right?
A few years ago, I remember that there were lead providers
that would provide you with leads that people actually wanted
to receive, they were associated with the business partners,
and somehow some people could call them, and there was no need
for other people to make millions and millions of calls. You
could make thousands of calls with those leads without making
millions. I think that it is increasing now because the express
consent law was passed. They basically killed the lead list
provider, they went out of business, there were no more leads.
Now they go and start dialing randomly.
Senator Markey. Right.
Mr. Abramovich. This is true, most of the numbers are bad,
they don't even connect, it's voice-mails, most of them go to
voice-mails, and others are busy, others just simply don't
answer the phone. There's no way that the legal telemarketing
can offer any product anymore.
Senator Markey. Exactly. That's the point. People don't
want to have the phone start ringing at 7 at night and go all
night long. They have a right to not be called. They shouldn't
have to hang up time after time night after night. It is not a
business model that's consistent with how American families
want to have their lives lived in the evening. And so that's
why we need these laws, and that's why we need the FCC to
tighten up these definitions even more.
I think you, Mr. Chairman.
The Chairman. All right. Thank you, Senator Markey.
Actually, we have a second panel to get to. We have votes
at noon, so we have a hard stop there. I, frankly, personally,
and I think other members of the panel would say, too, that
we're disappointed in the failure to provide answers to a lot
of what I think are good faith questions. But as I stated
previously, it's my opinion that you may have waived your Fifth
Amendment rights based on the information you provided in your
opening statement. The Committee may seek to hold you in
contempt of Congress for failing to respond, but because I do
want to get to the----
STATEMENT OF HON. JON TESTER,
U.S. SENATOR FROM MONTANA
Senator Tester. Mr. Chairman, can I just----
The Chairman. Yes.
Senator Tester. Just give me 20 seconds. No question.
The Chairman. All right.
Senator Tester. First of all, Mr. Abramovich, if you didn't
want to draw attention to yourself, you should have sent back
the request that the Chairman made and answered the questions.
Then you potentially would not have been here today and you
would not have the cameras focused on you.
Second of all, if you don't think 2 percent is a lot,
that's twice the population that lives in Montana, 2 million
people--that you hit.
Third of all, if I want to buy something, I'll call you,
don't call me.
Thank you, Mr. Chairman.
The Chairman. All right. Senator Klobuchar.
STATEMENT OF HON. AMY KLOBUCHAR,
U.S. SENATOR FROM MINNESOTA
Senator Klobuchar. Yes. Also I want to join in with what
Senator Tester just said, Mr. Abramovich. This whole business
model is put up to make you money and then to violate the
privacy of 229 million numbers which are now registered on the
Do Not Call list, that's 229 million people. And what's been
happening is that we've gotten increased complaints because
people like you have found ways to get around it, and it's
violating their privacy and it's oftentimes selling them stuff
that they shouldn't be buying and that they're not initiating
their own calls. And with the world changing, with texts and
autotexts, and with the world changing with the scams, we are
reintroducing and updating some of the legislation we have, and
that's one thing that we can do.
But I am pleased that the Chairman had this hearing and
that Senator Nelson did as well because I think that we also
have to hold people accountable who have been skirting the law
and getting around the law and potentially violating the law at
others' expense.
The Chairman. Thank you.
Mr. Abramovich, we're going dismiss you and ask our second
panel to come forward at this time.
Mr. Abramovich. Can I say just one last thing?
The Chairman. Mm-hmm.
Mr. Abramovich. I think there's a lot of publicity around
my case. Like I said before, the FCC enforced action to other
people in the past that made 15, 20 million calls a day, and
they are not here. I think the publicity is harming my case in
some way. They made me the face of the robocalls and I think
it's not the case. I mean, there are people that made 20, 30
million calls a day, and they just receive a fine from the FTC
for $7 million, and they settled for $5-, $400,000. And they
are punishing me with a forfeiture fine of $120 million.
The Chairman. We'll have a chance to ask them about that on
the next panel. We have the FTC and the FCC both here.
Mr. Abramovich. I would like to hear. OK.
The Chairman. Thank you.
[Panel 2 coming forward.]
The Chairman. Welcome. We have Ms. Rosemary Harold, who is
Chief of Enforcement Bureau at the FCC; Ms. Lois Greisman, who
is the Associate Director, Marketing Practices Division, Bureau
of Consumer Protection, at the FTC; Mr. Kevin Rupy, who is Vice
President of Law and Policy at the USTelecom Association; Mr.
Scott Delacourt, who is a Partner with Wiley Rein representing
the U.S. Chamber of Commerce; and Ms. Margot Saunders, who is
the Senior Counsel of the National Consumer Law Center.
So thank you all for being here. And in the interest of
time, if you could move fairly quickly through your oral
remarks and confine those, if possible, to 5 minutes, and then
we'll make sure that your entire statements get included as a
part of the written record.
So we'll start on my left, and your right.
Ms. Harold, thank you and welcome.
STATEMENT OF ROSEMARY HAROLD, CHIEF, ENFORCEMENT BUREAU,
FEDERAL COMMUNICATIONS COMMISSION
Ms. Harold. Good morning, Chairman Thune and other members
of the panel. I am happy to speak with you and answer questions
about our enforcement activities at the FCC regarding illegal
robocalls and spoofed calls.
As many people have already said, unwanted unlawful calls
are not merely a serious irritation, they also can trick people
out of significant amounts of money and often target vulnerable
populations. Unwanted robocalls are our FCC's number one source
of complaints.
The recent omnibus legislation will assist our enforcement
efforts. It allows us to act against spoofed calls that
originate outside of the United States as well as against
spoofed text messages. Thank you, Chairman Thune and other
members of the Committee, for your leadership in the area.
The FCC uses several statutory provisions to take action
against unlawful calls. The Consumer Protection Act of 1991, or
TCPA, and accompanying FCC rules generally prohibit autodialed
calls or prerecorded or artificial voice messages to emergency
telephone lines, hospitals, and cell phones. The law also
generally prohibits unsolicited, prerecorded advertising
messages to residential telephones.
The Truth in Caller ID Act prohibits callers from
falsifying or spoofing caller ID information with the intent to
defraud, cause harm, or wrongfully obtain anything of value.
Consumers depend on caller ID information to help them decide
whether to answer a phone call and whether to trust the caller
on the other end of the line. Most large-scale unlawful
robocall schemes today also employ spoofing.
We, at the FCC, have extensive ongoing enforcement efforts
underway. Last year, we issued two notices of apparent
liability and citations against two robocallers. In addition to
Mr. Abramovich, Mr. Philip Roesel was a target of a different
case. The evidence there showed that these individuals, along
with their affiliated companies, made a total of more than 117
million apparently illegal spoofed calls. Because those cases
remain ongoing, I cannot discuss the status of the case or much
about them.
The FCC does work with the FTC on investigations and other
actions. The agencies cooperate and share information pursuant
to an MOU, a memorandum of understanding, and our roles are
largely complementary, not duplicative. For example, the FCC
has exclusive jurisdiction to enforce the anti-spoofing law.
The two agencies also co-host events to raise awareness. On
April 23rd, we are co-hosting an industry expo where private
companies will showcase innovative products that consumers can
use to combat illegal robocalls themselves. In addition, the
FCC has established relationships with industry to help us with
our enforcement.
Telephone carriers have access to information and technical
expertise that helps us to pinpoint the source of unlawful
calls. Some of our most important efforts are ones you may
never hear about. Together with the industry, we have been
unable to shut down some unlawful robocall schemes early on.
Major telephone carriers and industry associations have
banded together to share critical information about fraudulent
activity. We also appreciate the significant effort of consumer
protection groups to educate consumers.
With respect to rulemakings, the FCC, under Chairman Pai,
is looking at ways to stop illegal robocalls before they even
reach consumers. Last November, the FCC decided that voice
service providers may block calls where spoofed caller IDs are
invalid or unassigned or numbers that we know don't originate
calls, such as in the recent IRS scams. Such calls are almost
certainly illegal. In addition, the FCC right now is asking
about other ways to identify and block illegal calls without
also blocking legal ones.
The FCC is working closely with industry also to adopt the
adoption of call authentication, a technological means by which
telephone calls can be securely ``signed'' by their senders to
ensure that caller ID isn't being spoofed.
The FCC has brought together experts and stakeholders in
various ways to discuss the issues and try to solve at least
parts of the problem, including the Robocall Strike Force, an
ongoing inquiry proceeding, and most recently through a North
American Numbering Council working group.
Moreover, we've moved to help responsible lawful callers
avoid calling numbers that have been reassigned to a new
consumer.
Last month, the FCC proposed a reassigned numbers data base
that legit callers should check to avoid calling the wrong
consumer.
Finally, as you know, the D.C. Circuit recently issued a
decision regarding the Commission's 2015 TCPA Omnibus Order.
The Commission is actively reviewing that decision and
determining what responsive actions would be appropriate. We
are confident, however, that the court decision does not affect
the enforcement actions that are ongoing against Mr. Abramovich
or Philip Roesel because those actions were based on legal
authority that the court did not address.
Thank you for your time. And I'm happy to take any
questions you may have for me.
[The prepared statement of Ms. Harold follows:]
Prepared Statement of Rosemary Harold, Chief, Enforcement Bureau,
Federal Communications Commission
Good morning Chairman Thune, Ranking Member Nelson, and Members of
the Committee. My name is Rosemary Harold, and I am Chief of the
Enforcement Bureau of the Federal Communications Commission. I am happy
to speak with you and answer questions about the Commission's
enforcement actions and authority to combat illegal robocalls and
spoofed calls.
Unwanted, unlawful calls are not merely a serious aggravation; many
robocall and spoofing schemes are designed to trick people out of
significant amounts of money. These schemes often are most effective in
harming vulnerable populations, such as senior citizens. Unwanted
robocalls are the Commission's number one source of consumer
complaints. The recent Omnibus legislation will provide significant
assistance in our enforcement efforts. It allows us to take action
against spoofed calls that originate outside the United States, and
against spoofed text messages. Chairman Thune and Ranking Member
Nelson, we are especially grateful for your leadership in this area.
FCC Regulatory Authority. The FCC uses several statutory provisions
to take action against unlawful calls. The Telephone Consumer
Protection Act of 1991, or TCPA, and accompanying Commission rules
generally prohibit autodialed calls or prerecorded or artificial voice
messages to emergency telephone lines, hospitals, and cell phones. The
law also prohibits unsolicited, prerecorded advertising messages to
residential telephone lines, except under limited circumstances. The
Commission's Do-Not-Call rules require telemarketers to honor
consumers' desires not to receive telemarketing calls.
The Truth in Caller ID Act prohibits callers from falsifying or
``spoofing'' caller ID information with the intent to defraud, cause
harm, or wrongfully obtain anything of value. Consumers depend on
caller ID information to help them decide whether to answer a phone
call and whether to trust the caller on the other end of the line.
Unlawful spoofing can deceive recipients about the true identity of the
caller and impede the ability of carriers and law enforcement to
pinpoint the source of abusive calls. Most large-scale unlawful
robocall schemes employ caller ID spoofing. In particular, many schemes
utilize neighbor spoofing where the spoofed caller ID matches the area
code and first three numbers of the phone number being called.
FCC's Enforcement Work. The Commission has extensive ongoing
enforcement efforts, although much of the work is conducted behind the
scenes, long before a formal, public action. Last year, for example,
the Commission issued notices of apparent liability (NALs) and
citations against two massive robocallers and spoofers, Adrian
Abramovich and Philip Roesel. The evidence in those investigations
showed that these two individuals, along with their affiliated
companies, made more than 96 million and 21 million apparently illegal,
spoofed robocalls, respectively. And the Commission has proposed
forfeitures of $120 million and $82.1 million, respectively, in these
cases. Because the details of these ongoing investigations are not
public, I cannot provide further information about these cases at this
time.
FCC/FTC Coordination: The FCC works with the Federal Trade
Commission (FTC) throughout ongoing investigations and other actions.
The agencies cooperate, share information, and render assistance
pursuant to a Memorandum of Understanding. The FCC and FTC roles are
largely complementary, and not duplicative. For example, the FCC has
exclusive jurisdiction to enforce the Truth In Caller ID Act's
provisions against spoofing. On March 23, we co-hosted with the FTC a
Joint Policy Forum to learn what is being done to help consumers and
the challenges that remain. On April 23, we are co-hosting with the FTC
the ``Stop Illegal Robocalls Expo,'' where 17 tech companies will
showcase their innovative technologies, devices, and applications for
consumers to combat illegal robocalls. In addition to FTC coordination,
the Enforcement Bureau regularly coordinates with the CFPB, Department
of the Treasury, Department of Justice, and Department of Homeland
Security.
Industry Cooperation: We have also established relationships with
industry to assist in enforcement. Telephone carriers have access to
information and technical expertise that can help with early detection
of potentially unlawful calls and pinpoint the source of the calls.
Frankly, some of our most successful efforts are the ones you may never
hear about: when we work with industry to identify and shut down
unlawful robocall schemes early on. Major telephone carriers and their
industry associations have banded together to share critical
information about fraudulent call activity. We also appreciate the
critical effort of consumer protection groups to inform and educate
consumers.
Rulemakings. Stopping illegal robocalls before they even reach
consumers can put a big dent in the problem, and under Chairman Pai's
leadership, the Commission is looking at different ways to make that
happen.
Last November, the Commission decided that voice service providers
may block calls where spoofed Caller ID displays invalid or unassigned
numbers, or numbers that we know don't originate calls, as in the
recent IRS scam. Such calls are almost certainly illegal and can be
blocked.
The Commission is also asking about other ways to identify and
block illegal calls, without blocking lawful calls. For example, can
call analytics reliably identify calling patterns that result from
illegal calls--such as large bursts of calls over a short time from
numbers that don't usually make calls that way?
The Commission is also working closely with industry to speed the
adoption of call authentication--a means by which telephone calls can
be securely ``signed'' by their senders, so that we know that the
Caller ID isn't being spsoofed. The Commission has worked to bring the
relevant experts and stakeholders together, through the Robocall Strike
Force; a Notice of Inquiry; and most recently through a North American
Numbering Council working group.
We've also moved to help responsible, lawful callers avoid calling
phone numbers that have been reassigned to a new consumer. Just last
month, the Commission proposed a reassigned numbers database that
callers could check to avoid calling the wrong consumer.
ACA International Decision. The DC Circuit recently issued a
decision regarding the Commission's 2015 TCPA Omnibus Order. The
Commission is reviewing that decision and determining what responsive
actions might be appropriate. We are confident, however, that the court
decision does not affect the enforcement actions against Adrian
Abramovich or Philip Roesel or other investigations we are pursuing
because those actions were based on legal authority outside the scope
of the recent D.C. Circuit decision.
Thank you again for the opportunity to speak with you this morning.
I welcome any questions you may have.
The Chairman. Thank you, Ms. Harold.
Ms. Greisman.
STATEMENT OF LOIS GREISMAN, ASSOCIATE DIRECTOR,
MARKETING PRACTICES DIVISION, BUREAU OF CONSUMER PROTECTION,
FEDERAL TRADE COMMISSION
Ms. Greisman. Good morning, Chairman Thune, Ranking Member
Blumenthal, and members of the Committee. I'm honored to have
the opportunity this morning to discuss the FTC's work to fight
illegal robocalls. As each of you has made clear, there is no
shortage of adjectives to describe the detested robocalls that
batter our phones and mobile devices. At best, these calls
cause intense annoyance; at worse, fraudulent calls cause
wrenching economic harm.
In 2017, the FTC received more than 7 million complaints
about unwanted calls. Consistently, more than 60 percent of
those complaints are about robocalls. In just the first 3
months of 2018, we've received 1.4 million complaints, with
robocalls driving the numbers. Some 900,000 of the 1.4 million
complaints are about robocalls. The complaint numbers are
compelling and demand action. That's precisely what the FTC has
been doing, deploying a three-pronged approach to tackle
illegal robocalls; namely, law enforcement, the promotion of
technological solutions, and, of course, robust consumer and
business education.
First, law enforcement. I submit to you that the Commission
has been relentless in its attacks against unwanted calls.
Since 2014, when we started enforcing Do Not Call provisions,
no less than 135 enforcement actions against 439 companies and
356 individuals have been filed. 125 of those cases have been
resolved, and the Commission has collected $121 million in
monetary relief in civil penalties, and that amount does not
include the historic $280 million civil penalty judgment
against Dish.
The recent cases alone have stopped literally billions of
illegal robocalls, many of which use spoofed caller ID. We have
targeted many pernicious king pins in the robocall ecosystem,
many of whom are interconnected and providing dialing platform,
lead generators, telemarketers, and sellers. Many of the people
recently sued by the FTC have known and worked with one another
for years. One was so bold as to use his own voice for the
robocall recording. Another ensured that his dialer was
programmed so as not to call anyone at the FTC.
These connections are highlighted in a recently filed case
against Alliance and its founder, Joe Gotra, who are alleged to
have bombarded consumers with illegal calls for home alarm
systems. These calls so outraged consumers that some of them
went so far as to schedule an appointment for installation so
that they could tell the person to their face to stop calling
them.
We will continue to coordinate our work with State
enforcers, with Federal law enforcement, the FCC, the IRS,
Postal Inspection Service, and Department of Justice.
Still, we know sustained law enforcement alone will not
solve the problem. The second prong focuses on technological
solutions. Toward that end, the FTC has hosted four robocall
contests. In fact, two of the winners brought call-blocking
products to the market, Nomorobo and RoboKiller. Moreover, the
FTC has supported industry initiatives, such as the industry-
led Robocall Strike Force, and has provided comment on the
FCC's rulemaking efforts to expand voice service providers
authorization to block unwanted calls. The recent joint FTC-FCC
forum highlighted much of this work.
No silver bullet is in sight, but real progress is being
made. Indeed, when the FTC announced its first robocall
challenge in 2012, few, if any, call-blocking tools were in the
marketplace. Today, hundreds are available. The upcoming April
23 expo that Ms. Harold mentioned that we're jointly hosting
will highlight these tools to the public.
The FTC has also implemented a strategy to facilitate
technological solutions. Each business day, the agency releases
about 22,000 phone numbers that consumers complain about. This
data is used to improve the functionality of call-blocking
solutions.
The third prong of the FTC's work is consumer and business
education. Often with assistance from your offices, the FTC
continues to push out a large quality of--a large quantity of
high quality educational messages to consumers and businesses.
In connection with the recent forum, we released information on
call-blocking tools, infographics on what's available for
landlines and mobile devices, and how to choose the right one.
We also work closely with sellers and telemarketers so they
have clarity about what is legal and what is illegal.
In short, I'm very proud of the work the FTC has done to
curb illegal robocalls, halting billions and spurring
innovation. But I am keenly aware that we must steadfastly
tackle this vexing consumer protection problem, and I commit to
you that we will do just that.
Thank you very much.
[The prepared statement of Ms. Greisman follows:]
Prepared Statement of Lois Greisman, Associate Director, Division of
Marketing Practices, Bureau of Consumer Protection, Federal Trade
Commission
Chairman Thune, Ranking Member Nelson, and members of the
Committee, 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 includes more than 229 million active telephone numbers,\3\ has
been tremendously successful in protecting consumers' privacy from
unwanted calls by the thousands of legitimate telemarketers who
subscribe to the Registry each year.\4\ Subsequently, changes in
technology led to a new source of immense frustration--the blasting of
prerecorded messages that primarily rely on Voice over Internet
Protocol (``VoIP'') technology.\5\ In 2008, the Commission responded by
amending the TSR to prohibit the vast majority of prerecorded sales
calls.\6\
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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. See generally The
Telemarketing Sales Rule, 16 C.F.R. Part 310.
\3\ See Do Not Call Registry Data Book 2017: Who is using the Do
Not Call Registry available at https://www.ftc.gov/policy/reports/
policy-reports/commission-staff-reports/national-do-not-call-registry-
data-book-fy-3.
\4\ For example, in Fiscal Year 2017, more than 17,000
telemarketers accessed the Do Not Call Registry. See id.
\5\ See Section II(A), infra.
\6\ 73 Fed. Reg. 51164 (Aug. 29, 2008); 16 C.F.R.
Sec. 310.4(b)(1)(v).
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Illegal robocalls remain a significant consumer protection problem
because they repeatedly disturb consumers' privacy and frequently use
fraud and deception to pitch goods and services, leading to significant
economic harm. Illegal robocalls are also frequently used by criminal
impostors posing as trusted officials or companies. Consumers are
justifiably frustrated--in Fiscal Year 2017 the FTC received more than
4.5 million robocall complaints.\7\ The FTC is using every tool at its
disposal to fight these illegal calls.\8\ This testimony describes the
Commission's efforts to stop telemarketer violations, including our
aggressive law enforcement, initiatives to spur technological
solutions, and robust consumer and business outreach.
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\7\ The FTC's Fiscal Year 2017 began October 1, 2016 and ended
September 30, 2017. Total unwanted-call complaints for FY 2017
including both robocall complaints and complaints about live calls from
consumers whose phone numbers are registered on the Do Not Call
Registry, exceed 7million. Note, however, that the FTC identified a
technical problem with complaint submissions that resulted in
artificially high complaint counts in July and August. See Do Not Call
Registry Data Book 2017: Complaint Figures for FY 2017 available at
https://www.ftc.gov/policy/reports/policy-reports/commission-staff-
reports/national-do-not-call-registry-data-book-fy-1.
\8\ See FTC Robocall Initiatives,https://www.consumer.ftc.gov/
features/feature-0025-robocalls.
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I. Law Enforcement
Since establishing the Do Not Call Registry in 2003,\9\ the
Commission has fought vigorously to protect consumers' privacy from
unwanted calls. Indeed, since the Commission began enforcing the Do Not
Call provisions of the TSR in 2004, the Commission has brought 135
enforcement actions seeking civil penalties,\10\ restitution for
victims of telemarketing scams, and disgorgement of ill-gotten gains
against 439 corporations and 356 individuals. From the 125 cases that
have been resolved thus far, the Commission has collected over $121
million in equitable monetary relief and civil penalties.
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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
https://www.ftc.gov/news-events/press-releases/2003/09/ftc-files-
motion-stay-pending-appeal-oklahoma-dnc-ruling; Press Release,
Statement of FTC Chairman Timothy J. Muris (Sept. 26, 2003), available
at https://www.ftc.gov/news-events/press-releases/2003/09/statement-
ftc-chairman-timothy-j-muris. 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 https://www.ftc.gov/news-events/press-
releases/2003/09/statement-ftc-chairman-timothy-j-muris-0. 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 https://
www.ftc.gov/news-events/press-releases/2004/02/appeals-court-upholds-
constitutionality-national-do-not-call.
\10\ As is true of all TSR violations, telemarketers who violate
the Do Not Call provisions are subject to civil penalties of up to
$40,000 per violation. 15 U.S.C. Sec. 45(m)(1)(A); 16 C.F.R.
Sec. 1.98(d).
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A. Robocall Law Enforcement
On September 1, 2009, TSR provisions went into effect prohibiting
the vast majority of robocalls selling a good or service.\11\ 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
against robocalls, filing 45 cases against 163 companies and 121
individuals responsible for billions of illegal robocalls.\12\ From the
42 cases that have concluded thus far, the Commission has collected
more than $29 million in civil penalties, redress, or disgorgement. Set
forth below are details regarding several of our recent robocall
enforcement actions.
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\11\ Like the other provisions of the TSR, the robocall provisions
do not apply to non-sales calls, such as calls placed calls that are
purely political, informational, or survey calls. Also, the provisions
allow robocalls to members or prior donors of charities. See generally
``Complying with the Telemarketing Sales Rule'' (June 2016), available
at https://www.ftc.gov/tips-advice/business-center/guidance/complying-
telemarketing-sales-rule. 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.
Sec. 310.4(b)(1)(v)(D), and for certain calls placed by telemarketers
who solicit charitable contributions, 16 C.F.R. Sec. 310.4(b)(1)(v)(B).
\12\ The FTC filed 12 of the 45 cases before the rule change went
into effect on September 1, 2009.
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1. Recent Enforcement Activities
i. Alliance Security
Just a few weeks ago, the FTC filed a complaint and motion for
preliminary injunction in Federal district court alleging that Alliance
Security Inc. (``Alliance'') and its founder, Jasjit ``Jay'' Gotra,
directly and through its authorized telemarketers, called more than a
million consumers whose numbers are on the Do Not Call Registry.\13\
Alliance installs home security systems, and makes outbound calls to
solicit the sale of the systems and associated security monitoring
services.
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\13\ Alliance and Gotra are recidivist violators of the
Telemarketing Sales Rule that were under a 2014 FTC order for prior
illegal calling practices. See U.S. v. Versatile Marketing Solutions,
Inc., 1:14-cv-10612-PBS (D. Mass. Mar. 10, 2014) available at https://
www.ftc.gov/enforcement/cases-proceedings/122-3162/versatile-marketing-
solutions-inc-also-dba-vms-alarms-et-al. Based on this pattern of
behavior, the FTC's most recent enforcement action seeks a preliminary
and permanent injunction that bans Alliance and Gotra from
telemarketing. FTC v. Jasjit Gotra, 1:18-cv-10548 (D. Mass. Mar. 23,
2018) available at https://www.ftc.gov/enforcement/cases-proceedings/
x140022/jasjit-gotra-alliance-security.
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The FTC's complaint alleges that since 2014, Alliance and Gotra
made or helped others make at least two million calls to consumers that
violate the TSR, including more than a million calls to numbers on the
DNC Registry.\14\ Many of these calls began as illegal robocalls using
``spoofed'' Caller ID numbers and information.\15\ Defendants then
transferred the calls to a live agent, but continued to hide the
identity of the caller--even taking pains to prohibit agents from
naming Alliance.\16\ In some cases, Alliance's agents deceptively held
themselves out as a competitor, such as ADT, when calling
consumers.\17\ Some consumers were so frustrated by the barrage of
unwanted calls from Alliance that they scheduled an alarm installation
just to plead in person for an end to the calls.\18\
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\14\ FTC v. Jasjit Gotra, 1:18-cv-10548 (D. Mass. Mar. 23, 2018)
available at https://www
.ftc.gov/enforcement/cases-proceedings/x140022/jasjit-gotra-alliance-
security.
\15\ Id.
\16\ Id.
\17\ Id.
\18\ Id.
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The FTC's complaint alleges that Alliance's disregard for
consumers' privacy went beyond the telephone and reached into their
personal data.\19\ Alliance also performed undisclosed, unauthorized
credit checks on consumers who received unsolicited telemarketing calls
from Alliance or its telemarketers, in violation of the Fair Credit
Reporting Act (``FCRA''), 15 U.S.C. Sec. 1681 et seq.\20\ Alliance
typically ran a credit check on every consumer who ``pressed 1'' in
response to a call placed by Alliance or one of its telemarketers and
expressed interest in obtaining an alarm system--without informing the
consumer.\21\
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\19\ Id.
\20\ To protect consumers' privacy and safeguard their financial
information, the FCRA prohibits unauthorized access to credit reports
and credit scores. Under the FCRA, 15 U.S.C. Sec. 1681b(f), it is
unlawful for any ``person to use or obtain a consumer report for any
purpose unless,'' that person has a specific permissible purpose
enumerated in 15 U.S.C. Sec. 1681b(a).
\21\ FTC v. Jasjit Gotra, 1:18-cv-10548 (D. Mass. Mar. 23, 2018)
available at https://www.ftc.gov/enforcement/cases-proceedings/x140022/
jasjit-gotra-alliance-security. Indeed, the complaint further alleges
that defendants attempted to pull credit reports or scores on President
Trump and former President Obama, and Vice President Pence and former
Vice President Biden, among others.
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Two of Alliance's authorized telemarketers and their principals
agreed to settle charges that they made illegal calls on Alliance's
behalf.\22\ One telemarketer and its principal will be permanently
barred from telemarketing and is subject to a civil penalty of
$2,296,500, that is suspended based on inability to pay.\23\ The second
telemarketer and its principal will be permanently banned from selling
home security and medical alert devices, making robocalls or helping
anyone else make them, using spoofed caller ID numbers, and calling
phone numbers on the Do Not Call Registry, unless a consumer directly
contacts the principal to request a call.\24\ The second telemarketer
is also subject to a civil penalty of $3,293,512, which will be
partially suspended due to their inability to pay, upon payment of
$300,000 to the Commission.\25\ The FTC is seeking strong injunctive
relief and civil penalties against the remaining defendants, Alliance
and Gotra, in Federal district court.\26\
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\22\ Id.
\23\ Id.
\24\ Id.
\25\ Id.
\26\ Id.
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ii. Higher Goals Marketing
In December 2017, the FTC filed an action in Federal district court
against Higher Goals Marketing LLC to halt an alleged debt-relief scam
that defrauded numerous consumers struggling with credit card debt.\27\
The complaint alleges that the Higher Goals Marketing defendants used
illegal robocalls to contact consumers, pitching their fake debt-relief
services and charging hefty up-front fees, causing millions of dollars
in injury.\28\ Defendants guaranteed that consumers would substantially
and permanently lower their credit card interest rates, and would save
thousands of dollars in interest payments.\29\ In reality, the
complaint alleges, the scheme was unable to deliver the promised
results to most consumers.\30\ Since the FTC filed this action, all
defendants stipulated to a Preliminary Injunction, which the Court
entered on December 28, 2017.\31\ Thanks to the filing of the FTC's
enforcement action, the defendants' operation is shut down, and the
Court has appointed a receiver to oversee the two corporate
defendants.\32\
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\27\ See FTC v. Higher Goals Marketing LLC, 6:17-cv-02048-GAP-KRS
(M.D. Fla. Dec. 4, 2017) available at https://www.ftc.gov/enforcement/
cases-proceedings/172-3045/higher-goals-marketing-llc.
\28\ Id.
\29\ Id.
\30\ Id. The Commission also alleges that several defendants
previously worked for a nearly identical telemarketing operation shut
down in 2016 by court order at the request of the FTC. These defendants
set up a new operation selling similar bogus credit-card interest-rate-
reduction services within weeks of the court order shuttering the
earlier operation. Id.
\31\ Id.
\32\ See id.
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iii. Jones and Ramsey Cases
Also in 2017, the Commission filed two lawsuits, FTC v. Justin
Ramsey and FTC v. Aaron Michael Jones, that shut down operations
responsible for billions of illegal robocalls. The Ramsey and Jones
defendants bombarded consumers with robocalls pitching home security
systems and extended auto warranties.\33\ The FTC obtained a settlement
order in the Ramsey action that bans Ramsey and his company from
placing robocalls to individuals to sell goods or services, initiating
sales calls to numbers listed on the DNC Registry, and selling data
lists containing phone numbers listed on the Registry.\34\ Ramsey and
his company also agreed to a $2.2 million civil penalty, suspended upon
payment of $65,000.\35\ In the Jones action, the court entered final
orders permanently banning Jones and his companies from all
telemarketing activities, including initiating robocalls, calling
numbers on the DNC Registry, and selling data lists containing
consumers' phone numbers and other information.\36\ The default
judgment order against Jones also imposes a $2.7 million civil penalty
against him, payable to the Commission.\37\
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\33\ FTC v. Justin Ramsey, 9:17-cv-80032-KAM (S.D. Fla. Jan. 13,
2017), available at https://www.ftc.gov/enforcement/cases-proceedings/
132-3254/justin-ramsey; FTC v. Michael Aaron Jones, 8:17-cv-00058 (M.D.
Fla. Jan. 13, 2017), available at https://www.ftc.gov/enforcement/
cases-proceedings/152-3152/allorey-inc. Evidence reviewed by FTC staff
in connection with the Ramsey case indicated that a portion of the
unlawful telemarketing calls targeted ``distressed seniors.''
\34\ FTC v. Justin Ramsey, 9:17-cv-80032-KAM (S.D. Fla. Apr. 11,
2017), available at https://www.ftc.gov/enforcement/cases-proceedings/
132-3254/justin-ramsey.
\35\ Id.
\36\ FTC v. Michael Aaron Jones, 8:17-cv-00058 (M.D. Fla. May 31,
2017), available at https://www.ftc.gov/enforcement/cases-proceedings/
152-3152/allorey-inc.
\37\ Id.
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Over the past three years the FTC, often in conjunction with its
law enforcement partners, initiated eleven new actions targeting
defendants we alleged are responsible for billions of illegal robocalls
hawking home security systems, free vacations, medical alert devices,
energy savings, and credit card interest rate reductions.\38\ Many of
the defendants in these cases are now banned from robocalling or
telemarketing.\39\
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\38\ FTC v. Jasjit Gotra, 1:18-cv-10548 (D. Mass. Mar. 23, 2018)
available at https://www
.ftc.gov/enforcement/cases-proceedings/x140022/jasjit-gotra-alliance-
security; FTC v. Higher Goals Marketing LLC, 6:17-cv-02048-GAP-KRS
(M.D. Fla. Dec. 4, 2017) available at https://www.ftc.gov/enforcement/
cases-proceedings/172-3045/higher-goals-marketing-llc; FTC v. Justin
Ramsey, 9:17-cv-80032-KAM (S.D. Fla. Jan. 13, 2017), available at
https://www.ftc.gov/enforcement/cases-proceedings/132-3254/justin-
ramsey; FTC v. Michael Aaron Jones, 8:17-cv-00058 (M.D. Fla. Jan. 13,
2017), available at https://www.ftc.gov/enforcement/cases-proceedings/
152-3152/allorey-inc; U.S. v. Consumer Education.info, Inc., 1:16-cv-
02692 (D. Col. Nov. 1, 2016), available at https://www.ftc.gov/
enforcement/cases-proceedings/152-3081/consumer-education
info-inc; FTC et al., v. Life Management Services of Orange County,
LLC, 6:16-CV-982-Orl (M.D. Fla. June 8, 2016), available at https://
www.ftc.gov/enforcement/cases-proceedings/152-3216/life-management;
U.S. v. Lilly Management and Marketing, LLC, 6:16-cv-485-Orl (M.D. Fla.
Mar. 17, 2016), available at https://www.ftc.gov/enforcement/cases-
proceedings/152-3115/usa-vacation-station; U.S. v. KFJ Marketing Inc.,
2:16-cv-01643 (C.D. Cal. Mar. 10, 2016), available at https://
www.ftc.gov/enforcement/cases-proceedings/152-3166/kfj-marketing-llc;
FTC v. Lifewatch Inc., 1:15-cv-05781 (N.D. Ill. June 20, 2015),
available at https://www.ftc.gov/enforcement/cases-proceedings/142-
3123/lifewatch-inc; FTC v. All Us Marketing LLC, 6:15CV1016-0RL-28GJK
(M.D. Fla. June 29, 2015), available at https://www.ftc.gov/
enforcement/cases-proceedings/142-3256/all-us-marketing-llc-formerly-
known-payless-solutions-llc; FTC et al., v. Caribbean Cruise Line,
Inc., 0:15-cv-60423 (S.D. Fla. Mar. 4, 2015), available at https://
www.ftc.gov/enforcement/cases-proceedings/122-3196-x150028/caribbean-
cruise-line-inc.
\39\ See, e.g., U.S. v. KFJ Marketing Inc., 2:16-cv-01643 (C.D.
Cal. Nov. 7, 2017), available at https://www.ftc.gov/enforcement/cases-
proceedings/152-3166/kfj-marketing-llc (final order permanently banning
corporate defendants and individual ringleader from all telemarketing);
FTC v. Michael Aaron Jones, 8:17-cv-00058 (M.D. Fla. May 31, 2017),
available at https://www.ftc.gov/enforcement/cases-proceedings/152-
3152/allorey-inc (final orders permanently banning Jones and related
companies from all telemarketing activities, including initiating
robocalls, calling numbers on the Do Not Call Registry, and selling
data lists containing consumers' phone numbers and other information);
FTC v. All Us Marketing LLC, 6:15CV1016-0RL-28GJK (M.D. Fla. May 22,
2017, June 8, 2016 and Nov. 1, 2016), available at https://www.ftc.gov/
enforcement/cases-proceedings/142-3256/all-us-marketing-llc-formerly-
known-payless-solutions-llc (multiple final orders permanently banning
most defendants from robocalling, telemarketing, and providing debt
relief services); FTC v. Justin Ramsey, 9:17-cv-80032-KAM (S.D. Fla.
Apr. 11, 2017), available at https://www.ftc.gov/enforcement/cases-
proceedings/132-3254/justin-ramsey (stipulated order banning Ramsey and
his company from placing robocalls to individuals to sell goods or
services, initiating sales calls to numbers listed on the Do Not Call
Registry, and selling data lists containing phone numbers listed on the
Registry); FTC v. Caribbean Cruise Line, Inc., 0:15-cv-60423 (S.D. Fla.
Feb. 17, 2017), available at https://www.ftc.gov/enforcement/cases-
proceedings/122-3196-x150028/caribbean-cruise-line-inc (final
stipulated order banning the Pacific Telecom defendants from
robocalling and illegal telemarketing, as well as helping anyone else
make such calls).
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iv. Historic Victory in Dish Network
In addition to initiating new enforcement actions, the FTC and our
law enforcement partners also achieved an historic win in a long-
running fight against unwanted calls and robocalls. On June 5, 2017, a
Federal district court in Illinois issued an order imposing the largest
penalty ever issued in a Do Not Call case: $280 million against Dish
Network.\40\ The Dish litigation began in 2009 when the Department of
Justice brought an action on behalf of the FTC with the states of
California, Illinois, North Carolina, and Ohio alleging millions of
violations of the Telemarketing Sales Rule, the Telephone Consumer
Protection Act (``TCPA'') and various state Do Not Call laws.\41\ The
litigation centered on allegations that Dish and its telemarketers made
tens of millions of calls--often robocalls \42\--to telephone numbers
on the Do Not Call Registry and called consumers who previously asked
Dish and its telemarketers to stop calling.\43\ In January 2015, the
Court found that Dish and its telemarketers had engaged in more than 66
million violations of the TSR and that Dish was responsible for calls
made by its retailers.\44\ The $280 million penalty against Dish
includes $168 million to the United States for violations of the TSR
and $112 million to the states for violations of the TCPA and various
state laws. The order also imposed strong injunctive relief that, among
other provisions, requires Dish to hire a monitor to ensure that Dish
and its retailers comply with telemarketing laws.\45\ The tireless
efforts of DOJ and our state co-plaintiffs were invaluable in securing
an outcome that takes a strong stand against companies who invade a
consumer's privacy through unwanted calls and robocalls.
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\40\ See U.S. v. Dish Network, LLC, No. 3:09-cv-03073 (C.D. Ill.
June 6, 2017) available at https://www.ftc.gov/news-events/press-
releases/2017/06/ftc-doj-case-results-historic-decision-awarding-280-
million-civil.
\41\ U.S. v. Dish Network, LLC, No. 3:09-cv-03073 (C.D. Ill. Mar.
25, 2009), available at https://www.ftc.gov/news-events/press-releases/
2009/03/ftc-charges-dish-network-formerly-known-echostar-multiple-do-
not.
\42\ When the Dish case was filed in March of 2009, the robocall
provision of the TSR was not yet in effect, thus the complaint reached
Dish's unlawful use of robocalls through a count alleging violations of
the TSR's abandoned call provisions. Since October 1, 2003,
telemarketers have been prohibited from abandoning an outbound
telephone call, and sellers are prohibited from causing a telemarketer
to do so in violation of the TSR. 16 C.F.R. Sec. 310.4(b)(1)(iv). An
outbound telephone call is abandoned if a person answers it and the
telemarketer does not connect the call to a sales representative within
two (2) seconds of the person's completed greeting. 16 C.F.R.
Sec. 310.4(b)(1)(iv). The use of robocalls, where a sales pitch to a
live consumer begins with or is made entirely by a pre-recorded
message, violates the TSR's abandoned call prohibition because the
telemarketer is not connecting the call to a sales representative
within two (2) seconds of the person's completed greeting.
\43\ U.S. v. Dish Network, LLC, No. 3:09-cv-03073 (C.D. Ill. Mar.
25, 2009), available at https://www.ftc.gov/enforcement/cases-
proceedings/052-3167/dish-network-llc-united-states-america-federal-
trade.
\44\ U.S. v. Dish Network, LLC, No. 3:09-cv-03073 (C.D. Ill. Jan.
21, 2015), available at https://www.ftc.gov/news-events/press-releases/
2015/01/court-grants-partial-summary-judgment-ftc-case-against-dish.
\45\ See U.S. v. Dish Network, LLC, No. 3:09-cv-03073 (C.D. Ill.
June 6, 2017) available at https://www.ftc.gov/news-events/press-
releases/2017/06/ftc-doj-case-results-historic-decision-awarding-280-
million-civil.
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2. Reaching Violators Attempting to Avoid Detection
Increasingly, the perpetrators behind these abusive and often
fraudulent calls take steps to avoid detection, either by operating
through a web of related entities, ``spoofing'' their Caller ID
information, or hiding overseas. The FTC uses every investigative and
litigation tool at its disposal to cut through these deceptions. For
example, the defendants in the Jones and Ramsey cases operated through
a tangle of related individuals and entities to avoid detection by law
enforcement. In addition, defendants in many of our robocall cases
routinely hid their true name or phone number to deceive consumers and
evade detection by law enforcement and the Commission included counts
in its suits targeting this unlawful Caller ID spoofing.\46\
---------------------------------------------------------------------------
\46\ See FTC v. Jasjit Gotra, 1:18-cv-10548 (D. Mass. Mar. 23,
2018) available at https://www.ftc.gov/enforcement/cases-proceedings/
x140022/jasjit-gotra-alliance-security; U.S. v. KFJ Marketing Inc.,
2:16-cv-01643 (C.D. Cal. Mar. 10, 2016), available at https://
www.ftc.gov/enforcement/cases-proceedings/152-3166/kfj-marketing-llc;
FTC v. Lifewatch Inc., 1:15-cv-05781 (N.D. Ill. June 20, 2015),
available at https://www.ftc.gov/enforcement/cases-proceedings/142-
3123/lifewatch-inc; FTC v. All Us Marketing LLC, 6:15CV1016-0RL-28GJK
(M.D. Fla. June 29, 2015), available at https://www.ftc.gov/
enforcement/cases-proceedings/142-3256/all-us-marketing-llc-formerly-
known-payless-solutions-llc; FTC v. Caribbean Cruise Line, Inc., 0:15-
cv-60423 (S.D. Fla. Mar. 4, 2015), available at https://www.ftc.gov/
enforcement/cases-proceedings/122-3196-x150028/caribbean-cruise-line-
inc. In each case, the FTC alleged that defendants failed to transmit
complete and accurate Caller ID information in violation of 16 C.F.R.
Sec. 310.4(a)(8) or assisted others in doing the same.
---------------------------------------------------------------------------
The perpetrators behind many unlawful calls also seek to evade law
enforcement by operating overseas. When consumers are victimized by
fraudulent calls from international call centers, the Commission finds
ways to stymie the scammers by cracking down on their U.S. enablers. In
one recent case, the Commission filed suit against individuals and
entities in the U.S. who were collecting money on behalf of
telemarketers at India-based call centers operating government impostor
scams that conned consumers into paying hundreds or thousands of
dollars for taxes they did not owe, or fees for services they did not
receive.\47\ In another recent case, the Commission brought suit
against the U.S. operators of a scam that relied on Peruvian call
centers and sophisticated Caller ID spoofing to pressure Spanish
speaking U.S. consumers into purchasing English-language learning
materials of little value--and then posing as government officials to
threaten and harass uninterested consumers into ``purchasing'' their
products.\48\
---------------------------------------------------------------------------
\47\ FTC v. PHLG Enterprises LLC, 8:17-cv-00220-RAL-AEP (M.D. Fla.
Jan. 27, 2017), available at https://www.ftc.gov/enforcement/cases-
proceedings/152-3245-x170019/phlg-enterprises-llc.
\48\ FTC v. ABC Hispana Inc., 5:17-cv-00252-JGB-DTB (C.D. Cal. Apr.
19, 2017), available at https://www.ftc.gov/enforcement/cases-
proceedings/152-3108/abc-hispana-inc-et-al.
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B. Coordination with Law Enforcement Partners
As the law enforcement challenges associated with illegal
telemarketing have increased, the FTC's relationships with other
agencies have become increasingly important. The Commission has robust,
collaborative relationships with state law enforcers, including through
the National Association of Attorneys General Do Not Call working
group. The Commission coordinates with various partners to bring law
enforcement actions. Many of the recent robocall enforcement actions
the FTC has led involved collaboration with the Department of Justice
or our state partners.\49\ The FTC also leads robocall law enforcement
``sweeps''--coordinated, simultaneous law enforcement actions--in
conjunction with state and Federal partners.\50\
---------------------------------------------------------------------------
\49\ See supra n. 38.
\50\ For example, the FTC led a multinational robocall sweep
announced in June 2016 that took action against operations estimated to
be responsible for billions of illegal robocalls.\50\ The June 2016
sweep included thirty-nine actions taken by the FTC, the Canadian
Radio-television and Telecommunications Commission (CRTC), the United
Kingdom's Information Commissioner's Office (ICO), as well as DOJ, the
FCC and the attorney generals' offices of Colorado, Florida, Indiana,
Kansas, Mississippi, Missouri, North Carolina, Ohio, and Washington
State, and the Tennessee Regulatory Authority. See Press Release, FTC,
Florida Attorney General Take Action Against Illegal Robocall Operation
(June 14, 2016), available at https://www.ftc.gov/news-events/press-
releases/2016/06/ftc-florida-attorney-general-take-action-against-
illegal-robocall and https://www.ftc.gov/system/files/attachments/
press-releases/ftc-florida-attorney-general-take-action-against-
illegal-robocall-operation/160614robocallenforcementactions.pdf
(listing actions comprising the coordinated enforcement crackdown).
---------------------------------------------------------------------------
In addition, the FTC regularly works with the Federal
Communications Commission (``FCC''), the Department of Justice, the
Internal Revenue Service (``IRS''), the U.S. Treasury Inspector General
for Tax Administration (``TIGTA''), 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
FTC's collaboration with its partners takes many forms, including
sharing information and targets, assisting with investigations, and
working collaboratively on long-term policy initiatives. Also, on May
17, for the third year in a row, the FTC is coordinating a meeting
among stakeholders specifically to tackle Indian call-center fraud.
Just last month, the FTC and FCC co-hosted a Joint Policy Forum on
Illegal Robocalls on March 23, 2018.\51\ The purpose of the forum was
to discuss the regulatory and enforcement challenges posed by illegal
robocalls and what the FCC and FTC are doing to protect consumers and
encourage the development of private-sector solutions.\52\ Discussion
topics included the factors driving the volume of illegal robocalls;
Caller ID spoofing; new threats to consumers, such as ``neighbor
spoofing''; protections for callers placing legal calls; FCC
rulemakings; enforcement challenges; third-party solutions and other
resources available to empower consumers; and industry efforts to
develop Caller ID authentication.\53\ The forum included policy and
regulatory experts from both agencies, enforcement leaders from both
agencies and the Florida Office of Attorney General, representatives
from voice service providers, representatives from companies providing
call-blocking solutions, as well as representatives from the call
originators.\54\
---------------------------------------------------------------------------
\51\ See Press Release, FTC and FCC to Host Joint Policy Forum on
Illegal Robocalls (Mar. 22, 2018) available at https://www.ftc.gov/
news-events/press-releases/2018/03/ftc-fcc-host-joint-policy-forum-
illegal-robocalls.
\52\ Id.
\53\ See Press Release, Agenda Announced for the March 23, 2018
FTC-FCC Joint Policy Forum on Fighting the Scourge of Illegal Robocalls
(Mar. 19, 208) available at https://www.ftc.gov/news-events/press-
releases/2018/03/ftc-fcc-host-joint-policy-forum-illegal-robocalls.
\54\ Id. A video recording of the event is available on the FCC's
website at https://www.fcc.gov/fcc-ftc-robocalls-forum.
---------------------------------------------------------------------------
II. Policy and Market Stimulation Initiatives
A. Understanding the Landscape of the Robocall Problem
Despite the 2009 prohibition of unauthorized robocalls and the
Commission's vigorous enforcement efforts, technological advances have
permitted law-breakers to make more robocalls for less money with a
greater ability to hide their identity. For example, at the end of
2009, the FTC received approximately 63,000 complaints about illegal
robocalls each month.\55\ That number has now more than quadrupled--in
Fiscal Year 2017, the FTC received an average of nearly 400,000
robocall complaints per month.\56\
---------------------------------------------------------------------------
\55\ National Do Not Call Registry Data Book FY 2010 at 5 (Nov.
2010), available at https://www.ftc.gov/reports/national-do-not-call-
registry-data-book-fiscal-year-2010. Since that time, the FTC began
separately tracking Do Not Call complaints and robocall complaints
based on information provided by the consumer.
\56\ See supra n. 8.
---------------------------------------------------------------------------
Recognizing that law enforcement, while critical, 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 foreign government
agencies. The Commission ramped up these efforts in October 2012, when
the FTC hosted a public summit on robocalls to explore these issues
(the ``Robocall Summit'').\57\ Since then, as discussed below, the
Commission has spurred the creation of specific groups of experts and
industry members to work together and with international law enforcers
to tackle this vexing consumer protection issue.
---------------------------------------------------------------------------
\57\ See generally FTC Workshop, Robocalls: All the Rage (Oct. 18,
2012), available at https://www.ftc.gov/news-events/events-calendar/
2012/10/robocalls-all-rage-ftc-summit. A transcript of the workshop
(hereinafter ``Tr.'') is available at https://www.ftc.gov/sites/
default/files/documents/public_events/robocalls-all-rage-ftc-summit/
robocallsummittranscript.pdf.
---------------------------------------------------------------------------
Speakers at the Robocall Summit made clear that convergence between
the legacy telephone system and the Internet has allowed robocallers to
engage, at very little cost, in massive, unlawful robocall campaigns
that cross international borders and hide behind spoofed Caller ID
information. 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.
1. Technological Developments Have Made Robocalls Extremely Inexpensive
Until relatively recently, telemarketing required significant
capital investment in specialized hardware and labor.\58\ Now,
robocallers benefit from automated dialing technology, inexpensive
international and long distance calling rates, and the ability to move
internationally and employ cheap labor.\59\ The only necessary
equipment is a computer connected to the Internet.\60\ The result: law-
breaking telemarketers can place robocalls for a fraction of one cent
per minute. 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, or
selling products.\61\ Because of the dramatic decrease in upfront
capital investment and marginal cost, robocallers--like e-mail
spammers--can make a profit even if their contact rate is very low.\62\
---------------------------------------------------------------------------
\58\ Herrmann, Tr. at 58-59; Schulzrinne, Tr. at 24.
\59\ Schulzrinne, Tr. at 24.
\60\ Herrmann, Tr. at 59-61.
\61\ Schulzrinne, Tr. at 20-21; Maxson, Tr. at 95-98.
\62\ Schulzrinne, Tr. at 21; Bellovin, Tr. at 16-17.
2. Technological Developments 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 many calls.
Thus, the typical call now takes a complex path, traversing the
networks of multiple VoIP and legacy carriers before reaching the end
user.\63\ These circuitous paths make it cumbersome to trace a call to
its inception.\64\ All too often, this process to trace the call fails
because one of the carriers in the chain has not retained the records
necessary for a law enforcement investigation.\65\
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\63\ Panagia, Tr. at 130-32; Bellovin, Tr. at 17.
\64\ Schulzrinne, Tr. at 24-25; Maxson, Tr. at 100; Bash, Tr. at
104. Recently, USTelecom's Industry Traceback Group has been able to
assist law enforcement to traceback a call more quickly through the
network.
\65\ Panagia, Tr. at 160-61; see also id. at 132-133; Schulzrinne,
Tr. at 21.
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Second, callers can easily manipulate the Caller ID information
that appears with an incoming phone call.\66\ While ``Caller ID
spoofing'' has some beneficial uses,\67\ it also allows telemarketers
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.\68\ In addition, telemarketers can change their phone numbers
frequently in an attempt to avoid detection.\69\ Today, many illegal
callers rely on ``neighbor spoofing'', the practice of using a Caller
ID number that appears to be from a number local to the call
recipient.\70\
---------------------------------------------------------------------------
\66\ Schulzrinne, Tr. at 24-26.
\67\ See, e.g., Panagia, Tr. at 129 (AT&T allows the third party
that performs AT&T's customer service to ``spoof'' AT&T's customer
service line).
\68\ Schulzrinne, Tr. at 21-22.
\69\ Id. at 24-26; Maxson, Tr. at 97; Bash, Tr. at 103. Under the
Truth in Caller ID Act, it is generally illegal to transmit misleading
or inaccurate Caller ID information with intent to defraud. See Truth
in Caller ID Act, 47 U.S.C.Sec. 227(e); cf. 16 C.F.R. Sec. 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.).
\70\ See FTC Consumer Information Blog, That's Not Your Neighbor
Calling https://www.consumer.ftc.gov/blog/2018/01/thats-not-your-
neighbor-calling.
---------------------------------------------------------------------------
Finally, new technologies allow robocallers to operate outside of
jurisdictions where they are most likely to face prosecution.\71\
Indeed, the entities involved in the path of a robocall can be located
in different countries, making investigations even more challenging.
---------------------------------------------------------------------------
\71\ Schulzrinne, Tr. at 21; Bellovin, Tr. at 16-17.
B. Efforts to Stimulate Technological Solutions
1. Robocall Contests
Recognizing the need to spur the marketplace into developing
technical solutions that protect American consumers from illegal
robocalls, the FTC lead four public challenges to help tackle the
unlawful robocalls that plague consumers. In 2012-2013, the FTC
conducted its first Robocall Challenge,\72\ and called upon the public
to develop a consumer-facing solution that blocks illegal robocalls,
applies to landlines and mobile phones, and operates on proprietary and
non-proprietary platforms. In response, we received 798 submissions and
partnered with experts in the field to judge the entries. One of the
winners, ``NomoRobo,'' was on the market and available to consumers by
October 2013--just 6 months after being named one of the winners. To
date, ``NomoRobo,'' which reports blocking over 600 million calls, is
being offered directly to consumers by a number of telecommunications
providers and is now available as an app on iPhones.\73\
---------------------------------------------------------------------------
\72\ For more information on the first FTC Robocall Challenge, see
https://www.ftc.gov/news-events/press-releases/2013/04/ftc-announces-
robocall-challenge-winners.
\73\ See https://www.nomorobo.com/(last visited April 4, 2018) and
Robocall Strike Force, Robocall Strike Force Report at 17-18 (April 28,
2017), https://www.fcc.gov/file/12311/download (``Strike Force Report
II'') at 17-18.
---------------------------------------------------------------------------
The following year, the FTC launched its second challenge--Zapping
Rachel \74\--which called upon information security experts to help
create a robust robocall honeypot. Sixty teams and individuals signed
up for one or more phase, and FTC staff obtained new insights that
improved current robocall honeypot designs and connected new partners
and stakeholders.
---------------------------------------------------------------------------
\74\ A robocall honeypot is an information system designed to
attract robocallers and help investigators and academics understand and
combat illegal calls. For more information on the Zapping Rachel
challenge see https://www.ftc.gov/news-events/contests/zapping-rachel.
---------------------------------------------------------------------------
In June 2015, the FTC sponsored its third challenge,
DectectaRobo,\75\ in which it called 1upon the public to analyze call
data to create algorithms that could predict which calls were likely
robocalls. Nineteen teams from all over the U.S. participated. Later in
2015, the FTC challenged information security experts to create tools
people could use to block and forward robocalls automatically to a
honeypot as part of the Robocalls: Humanity Strikes Back challenge.\76\
Contestants built and submitted robocall solutions to the judges and
finalists, then competed to ``seed'' their solutions and collect the
highest number of robocalls. One of the winners of the Humanity Strikes
Back challenge developed Robokiller, a call-blocking app available for
iOS phones.\77\
---------------------------------------------------------------------------
\75\ For more information on the Detectarobo challenge see https://
www.ftc.gov/news-events/contests/detectarobo.
\76\ For more information on the Robocalls: Humanity Strikes Back
challenge, see https://www.ftc.gov/news-events/contests/robocalls-
humanity-strikes-back.
\77\ See https://www.robokiller.com/(last visited April 4, 2018).
---------------------------------------------------------------------------
Each of the four challenges provided the Commission with an
opportunity to promote industry dialogue and innovation in combatting
illegal robocalls, develop industry partnerships, and refine its
understanding of the robocall problem and potential solutions. More
importantly, the challenges contributed to a shift in the development
and availability of technological solutions in this area, particularly
call-blocking and call-filtering products. A number of voice service
providers now offer call-blocking or call-filtering products to some or
all of their customers.\78\ In addition, there are a growing number of
free or low-cost apps available for download on wireless devices that
offer call-blocking and call-filtering solutions.\79\
---------------------------------------------------------------------------
\78\ For example, in late 2016 AT&T launched ``Call Protect'',
which is a product available to many AT&T wireless customers that
blocks fraud calls and flags others as potential ``spam.'' See http://
about.att.com/story/att_call_protect.html. T-Mobile offers its wireless
customers two free products, ``Scam ID'' and ``Scam Block'', that flag
and block unwanted calls. See http://explore.t-mobile.com/
callprotection (last visited April 4, 2018). Verizon offers a product
called ``Caller Name ID'' to its wireless customers that also attempts
to flag and block unwanted calls. See https://www.verizonwireless.com/
solutions-and-services/caller-name-id/(last visited April 4, 2018). In
addition, a number of carriers make Nomorobo available to their VoIP or
cable line customers. See, e.g., https://www.fcc.gov/consumers/guides/
stop-unwanted-calls-texts-and-faxes (listing available call blocking
resources from a number of wireline providers) (last visited April 4,
2018).
\79\ The Cellular Telecommunications Industry Association (CTIA)
maintains a list of hundreds of available call blocking apps (including
a list of the top 15 apps as determined by CTIA), both for iOS devices:
https://www.ctia.org/consumer-tips/robocalls/ios-robocall-blocking and
for Android devices: https://www.ctia.org/consumer-tips/robocalls/
android-robocall-blocking (last visited April 4, 2018).
---------------------------------------------------------------------------
2. Coordinating with Technical Experts, Industry, and Other
Stakeholders
The FTC provided input to support the industry-led Robocall Strike
Force, which is also working to deliver comprehensive solutions to
prevent, detect, and filter unwanted robocalls.\80\ In tandem with this
effort, the FTC worked with a major carrier and Federal law enforcement
partners to help block IRS scam calls that were spoofing well-known IRS
telephone numbers. The Strike Force expanded this effort and it
contributed to a drop in IRS scam calls at the end of 2016.\81\
---------------------------------------------------------------------------
\80\ The Robocall Strike Force developed in response to a call from
the FCC to make better call blocking solutions available to consumers,
quickly, and free of charge. See Robocall Strike Force, Robocall Strike
Force Report at 1 (2016), https://transition.fcc.gov/cgb/Robocall-
Strike-Force-Final-Report.pdf. The FTC has long been a proponent of
call blocking services as a critical tool to reduce unwanted calls and
robocalls and strongly supports the Strike Force's efforts. See e.g.,
FTC Staff, Comments Before the Federal Communications Commission on
Public Notice DA 14-1700 Regarding Call Blocking, CG Docket No. 02-278;
WC Docket No. 07-135 (Jan. 23, 2015), available at https://www.ftc.gov/
policy/policy-actions/advocacy-filings/2015/01/ftc-staff-comment-
federal-communications-commission.
\81\ See Robocall Strike Force, Robocall Strike Force Report at 32-
33 (2016), https://transition.fcc.gov/cgb/Robocall-Strike-Force-Final-
Report.pdf.
---------------------------------------------------------------------------
The Strike Force also found that, while several providers and third
parties offered call-blocking products, there was no widespread call-
blocking solution spanning the networks. In order to provide proactive
call-blocking services to customers, the Strike Force sought
clarification from the FCC that ``blocking presumptively illegal calls
is one of the tools carriers are permitted to use to provide consumers
additional relief.'' \82\ In response, in March 2017, the FCC issued a
Notice of Proposed Rule Making and Notice of Inquiry that sought to
expand the categories of calls that voice service providers are
authorized to block and invited comment on what types of standards
should govern providers engaged in call blocking.\83\ The FTC filed a
comment in response, supporting the NPRM's efforts to expand the
categories of calls that voice service providers are authorized to
block and encouraging the FCC to allow for some provider flexibility
when considering standards to govern provider-based blocking of
presumptively-illegal calls.\84\ In November 2017, the FCC issued a
Report and Order that enabled voice service providers to block certain
categories of calls before they reach consumers' phones as proposed by
the Notice of Proposed Rulemaking.\85\
---------------------------------------------------------------------------
\82\ See id. at 40.
\83\ Specifically, the FCC's NPRM sought input on rulemaking
proposals that would authorize two categories of provider-based call
blocking: 1) when the subscriber to a particular telephone number
requests that telecommunications providers block calls originating from
that number; and 2) when the originating number is invalid,
unallocated, or unassigned. See Advanced Methods to Target and
Eliminate Unlawful Robocalls, Notice of Proposed Rulemaking and Notice
of Inquiry, CG Docket No. 17-59, FCC 17-23 (released Mar. 23, 2017),
published in 82 Fed. Reg. 22625 (May 17, 2017).
\84\ See Comment of the FTC to the Federal Communications
Commission, Advanced Methods to Target and Eliminate Unlawful
Robocalls, Notice of Proposed Rulemaking and Notice of Inquiry, CG
Docket No. 17-59, FCC 17-23 (July 3, 2017), available at https://
www.ftc.gov/system/files/documents/advocacy_documents/ftc-staff-
comment-federal-communications-commission-supporting-fccs-proposed-
expansion-provider/
ftc_comment_to_fcc_re_nprm_noi_call_blocking_07032017.pdf. As call-
blocking technology gains momentum, the FTC is mindful about concerns
that bad actors may place telemarketing calls while spoofing an
innocent consumer's telephone number as the outbound caller ID number
in an effort to evade detection or that the inadvertent blocking of
legitimate calls may occur. These concerns were also raised by the FCC
and addressed in the FTC's Comment.
\85\ See Advanced Methods to Target and Eliminate Unlawful
Robocalls, Report and Order and Further Notice of Proposed Rulemaking,
CG Docket No. 17-59, FCC 17-151 (released Nov. 17, 2017).
---------------------------------------------------------------------------
Increased call-blocking and call-labeling tools for consumers has
presented new challenges for call originators, some of which contend
that their calls are being erroneously blocked or labeled. The FTC
participates in several forums that seek to improve the communication
between call originators and service providers. The FCC also recently
sought input on how best to address the question of potential errors in
call blocking and call labeling.\86\
---------------------------------------------------------------------------
\86\ See id.
---------------------------------------------------------------------------
In response, the FTC filed a comment encouraging providers of call-
blocking services to consider engaging in practices that could reduce
the potential for inadvertently blocking wanted calls, such as
communicating clearly to subscribers the types of calls that are being
blocked, using plain and specific terms to label calls, and providing
designated points of contact to handle questions about calls blocked in
error.\87\
---------------------------------------------------------------------------
\87\ See Comment of the FTC to the Federal Communications
Commission, Advanced Methods to Target and Eliminate Unlawful
Robocalls, CG Docket No. 17-59, FCC 17-151 (Jan 23, 2018), available at
https://www.ftc.gov/policy/advocacy/advocacy-filings/2018/01/ftc-staff-
comment-federal-communications-commission.
---------------------------------------------------------------------------
The FTC also has engaged with technical experts, academics, and
others through industry groups, such as the Messaging, Malware and
Mobile Anti-Abuse Working Group (``M\3\AAWG''). M\3\AAWG is a
consortium of industry, regulators, and academics focused on developing
solutions to mitigate various forms of messaging abuse such as e-mail
spam.\88\ After discussions with the FTC and others, M\3\AAWG
leadership formed the Voice and Telephony Abuse Special Interest Group
(``VTA SIG'') in 2014, a subgroup formed to apply M\3\AAWG's expertise
on messaging abuse to voice spam, such as robocalls.\89\
---------------------------------------------------------------------------
\88\ See M\3\AAWG, Activities, https://www.m3aawg.org/(last visited
April 5, 2018).
\89\ See M\3\AAWG, Voice and Telephony Abuse Special Interest
Group, https://www.m3aawg.org/voice-and-telephony-abuse-sig (last
visited April 5, 2018).
---------------------------------------------------------------------------
Through the VTA SIG, the FTC coordinates with experts working on
industry standards that will combat Caller ID spoofing by enabling the
authentication of VoIP calls, such as the Internet Engineering Task
Force's working group called ``STIR''--Secure Telephone Identity
Revisited.\90\ The FTC further promotes technical advancements by
collaborating with its counterparts in other countries, through its
leadership in the Unsolicited Communications Enforcement Network
(``UCENet'') an international syndicate of government agencies and
private sector representatives focused on international spam
enforcement cooperation.\91\
---------------------------------------------------------------------------
\90\ See Internet Eng'g Task Force, Secure Telephone Identity
Revisited (STIR), https://datatracker.ietf.org/wg/stir/charter/(last
visited April 5, 2018).
\91\ See https://www.ucenet.org/(last visited April 5, 2018).
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3. Data Initiatives
The Commission also engages in information sharing to help
facilitate technological solutions such as call blocking and has taken
steps to increase the quality and quantity of shared information. To
that end, on September 28, 2016, the FTC updated its Do Not Call
complaint intake process to provide a drop-down list of possible call
categories for consumers to choose from to make it easier for consumers
to report the subject of the call and to help the Commission identify
trends.
Next, in Fiscal Year 2017, the FTC redesigned its annual National
Do Not Call Registry Data Book.\92\ The Data Book now provides more
information on robocall complaints, new information about the types of
calls consumers reported to the FTC, and includes a complete state-by-
state analysis.\93\ In addition, this year the FTC has developed a
``mini site'' on its website to make the information in the FY 2017
Data Book more accessible for the public, such as providing a webpage
for each state.\94\ For the first time, the data behind the report is
also available in data files on the new website.\95\
---------------------------------------------------------------------------
\92\ Press Release, FTC Releases FY 2017 National Do Not Call
Registry Data Book and DNC Mini Site (Dec. 18, 2017) available at
https://www.ftc.gov/news-events/press-releases/2017/12/ftc-releases-fy-
2017-national-do-not-call-registry-data-book-dnc. Excerpts from the
Data Book are attached at Exhibit A.
\93\ Id.
\94\ Id.
\95\ Id.
---------------------------------------------------------------------------
One of the features of the new Data Book is a breakdown of the
topics of calls reported to the FTC that it gathered from the FTC's
revised online complaint form:
FY 2017 COMPLAINTS BY TOPIC \96\
---------------------------------------------------------------------------
\96\ See Do Not Call Registry Data Book 2017: Complaint Figures for
FY 2017 available at https://www.ftc.gov/reports/national-do-not-call-
registry-data-book-fiscal-year-2017. Not everyone who files a complaint
reports a topic.
The state-by-state analysis also includes the top 10 topics of consumer
complaints per state.\97\
---------------------------------------------------------------------------
\97\ See, e.g., Do Not Call Registry Data Book 2017: Alabama
available at https://www.ftc.gov/reports/national-do-not-call-registry-
data-book-fiscal-year-2017/alabama.
---------------------------------------------------------------------------
In addition to refining our complaint intake process and upgrading
our Data Book, the FTC recently began a new initiative to help improve
industry call-blocking solutions by increasing the amount and frequency
of consumer complaint data that we make publicly available.\98\
Beginning in August 2017, when consumers report Do Not Call or robocall
violations to the FTC, the phone numbers consumers report are released
each business day. The FTC is also releasing the following consumer-
reported data: the date and time the unwanted call was received, the
general subject matter of the call (such as debt reduction, energy,
warranties, home security, etc.), and whether the call was a
robocall.\99\ By making our available data more up-to-date and more
robust, the FTC seeks to improve the functionality of call-blocking
solutions for consumers that choose to use a call-blocking service or
feature.
---------------------------------------------------------------------------
\98\ See https://www.ftc.gov/news-events/press-releases/2017/08/
ftc-escalates-fight-against-illegal-robocalls-using-consumer. The
complaint data is available at: https://www.ftc.gov/site-information/
open-government/data-sets/do-not-call-data.
\99\ In the past, the Commission released a bi-weekly report that
published only the telephone numbers that consumers complained about in
their Do Not Call and robocall complaints.
---------------------------------------------------------------------------
The Commission is committed to continuing to work with industry and
government partners to improve information sharing to combat illegal
calls.
III. Consumer Education
Public education is also an 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 FTC's behalf.
The FTC delivers practical, plain language information on numerous
issues in English and in Spanish. The Commission also 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, the FTC's message to consumers is simple: if you answer a
call and hear an unwanted recorded sales message--hang up. Period.
Other key messages to consumers include how to place a phone number on
the Do Not Call Registry, how and where to report illegal
robocalls,\100\ available call blocking solutions,\101\ and how to
identify common scams.\102\ The FTC disseminates these tips through
articles,\103\ blog posts,\104\ social media,\105\ infographics,\106\
videos,\107\ audio,\108\ and campaigns such as ``Pass It On''--an
innovative means of arming older consumers with information about scams
that they can ``pass on'' to their friends and family members.\109\
---------------------------------------------------------------------------
\100\ See, e.g., National Do Not Call Registry, http://
www.consumer.ftc.gov/articles/0108-national-do-not-call-registry.
\101\ See, e.g., FTC Consumer Information Blocking Unwanted Calls
https://www.consumer
.ftc.gov/articles/0548-blocking-unwanted-calls.
\102\ See, e.g., FTC Consumer Information Scam Alerts, https://
www.consumer.ftc.gov/scam-alerts.
\103\ See, e.g., FTC Robocall Microsite, http://
www.consumer.ftc.gov/features/feature-0025-robo
calls.
\104\ See, e.g., FTC Consumer Information Blog, Looking to Block
Unwanted Calls? https://www.consumer.ftc.gov/blog/looking-block-
unwanted-calls; FTC Consumer Information Blog, That's Not Your Neighbor
Calling https://www.consumer.ftc.gov/blog/2018/01/thats-not-your-
neighbor-calling; FTC Consumer Information Blog, Apps to Stop Robocalls
https://www
.consumer.ftc.gov/blog/2017/10/apps-stop-robocalls.
\105\ See, e.g., FTC Robocalls Facebook Q&A Transcript (Oct. 25,
2012), https://www.ftc.gov/sites/default/files/attachments/ftc-
facebook-chats/1210robocallschallenge-fb.pdf.
\106\ See, e.g., FTC Robocalls Infographic, https://www.ftc.gov/
sites/default/files/documents/public_events/robocalls-all-rage-ftc-
summit/pdf-0113-robocalls-infographic.pdf.
\107\ See, e.g., FTC Video and Media, http://www.consumer.ftc.gov/
media.
\108\ See, e.g., FTC Consumer Information Audio, ``Hang Up on
Robocalls,'' http://www.con
sumer.ftc.gov/media/audio-0045-hang-robocalls.
\109\ See Pass It On, http://www.consumer.ftc.gov/features/feature-
0030-pass-it-on#identity-theft.
---------------------------------------------------------------------------
The FTC is taking additional steps to communicate information to
consumers about the available call-blocking solutions that might reduce
the amount of unwanted calls they receive. On April 23, 2018, the FTC
is co-hosting with the FCC a ``Stop Illegal Robocalls Expo.'' \110\ The
Expo will feature innovative technologies, devices, and applications to
minimize or eliminate the number of illegal robocalls consumers
receive.\111\ The Expo is free and open to the public.\112\ In late
March, the FTC also put out additional information on its websites
regarding how to stop unwanted calls for different types of phone
services: mobile, landline or VOIP.\113\
---------------------------------------------------------------------------
\110\ See Press Release, FTC and FCC Seek Exhibitors for an Expo
Featuring Technologies to Block Illegal Robocalls (Mar. 7, 2018)
available at https://www.ftc.gov/news-events/press-releases/2018/03/
ftc-fcc-seek-exhibitors-expo-featuring-technologies-block-illegal.
\111\ Id.
\112\ Id.
\113\ See FTC Consumer Information How to Stop Unwanted Calls
available at https://www.consumer.ftc.gov/features/how-stop-unwanted-
calls. A copy of this guidance is attached at Exhibit B.
---------------------------------------------------------------------------
IV. Next Steps and Conclusion
The Do Not Call Registry continues to help protect consumers
against unsolicited calls from legitimate telemarketers. However, as
technology continues to develop and fraudsters exploit those
developments, we must remain agile and creative. The Commission will
continue its multifaceted efforts to fight illegal robocalls, including
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, blocking illegal calls, 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 protect consumers from illegal robocalls.
We will continue to encourage industry-wide
coordination to create and deploy VoIP standards that
incorporate robust authentication capabilities. Such
coordination is the only way to ensure a future phone
system with accurate and truthful calling information.
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.
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.
EXHIBIT A
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
______
The Chairman. Thank you, Ms. Greisman.
Mr. Rupy.
STATEMENT OF KEVIN RUPY, VICE PRESIDENT,
LAW AND POLICY, USTelecom
Mr. Rupy. Chairman Thune, members of the Committee, thank
you for giving me the opportunity to appear before you today.
My name is Kevin Rupy, and I serve as Vice President of Law and
Policy at USTelecom. Over the last several years, USTelecom and
our member companies have been tremendously focused on the
robocall issue, and we share the Committee's concerns about the
problems associated with phone-based imposter scams targeting
consumers.
In this ongoing battle against criminal robocallers, there
have been four significant developments over the last year.
First, the industry-led, ecosystem-wide Robocall Strike
Force issued a series of reports to the FCC in October 2016 and
April 2017. These reports hold a significant amount of good
news for consumers. For example, the reports note that the
SHAKEN/STIR standards development for the next generation of
robocall mitigation tools were accelerated by 6 months. Some of
the initial testing of the SHAKEN standard is expected to
complete later this year with potential deployments anticipated
later this year and in 2019.
These reports also detail the efforts of USTelecom's
Industry Traceback Group, which is comprised of a broad range
of network providers from several industries who are working
collaboratively to identify the origin of these calls at their
source. Industry's strong commitment to this effort can be seen
in its significant growth from just three carriers in July 2016
to 22 providers as of today. The goal of this group is to
identify the source of the worst of these illegal calls and
further enable enforcement actions by Federal agencies.
Second, the reports show that USTelecom member companies,
independent application developers, and a growing number of
diverse companies offer services today that can help consumers
reduce unknown and potentially fraudulent calls. For example,
AT&T has launched its Call Protect service that allows
customers with iPhones and HD voice-enabled Android handsets to
block suspected fraudulent calls. AT&T also offers AT&T Digital
Call Protect for IP wireline phones.
Verizon's new Spam Alerts service provides its wireline
customers who have caller ID, whether they are on copper or
fiber, with enhanced warnings about calls that meet Verizon's
spam criteria by showing the term ``Spam?'' with a question
mark, before a caller's name on the caller ID display.
On the wireless side, Verizon has deployed and continues to
expand robocall mitigation features as part of its Caller Name
ID service, including a filter that automatically forwards to
voice-mail any calls corresponding to the spam risk level
selected by the customer.
The significant growth in consumers' tools was highlighted
just a few weeks ago at a joint FCC-FTC robocall workshop where
it was noted that since 2016, there has been a 495 percent
increase in smartphone applications for addressing robocalls.
Third, the FCC recently adopted rules allowing voice
providers to block certain types of calls. USTelecom supported
adoption of these rules and participated fully in the
proceeding. One issue the FCC raised is what protections
legitimate callers should have if their calls are blocked, both
for situations where voice providers block numbers directly,
and for blocking services that consumers may opt into.
This fall, USTelecom hosted a workshop aimed at helping
develop best practices for the scoring and labeling of calls,
and a follow up workshop is scheduled next month.
Finally, we applaud our Federal Government partners at the
FCC and FTC, who have engaged in a series of enforcement
actions against illegal robocallers. Both agencies' civil
enforcement actions send a strong and powerful message to
illegal robocallers that they will be located and brought to
justice. While these civil enforcement efforts are laudatory,
we believe there is an acute need for coordinated, targeted,
and aggressive criminal enforcement of illegal robocallers at
the Federal level. Given the felonious nature of their
activities, criminal syndicates engaged in illegal robocalling
should be identified, targeted, and brought to justice through
criminal enforcement efforts.
While consumer-centric tools may stop a series of calls
from reaching certain consumers, root-cause removal through
criminal enforcement stops millions of calls from ever being
originated.
Let me again thank the Committee for holding this timely
hearing. And I look forward to our continued work together to
address this constantly evolving challenge.
[The prepared statement of Mr. Rupy follows:]
Prepared Statement of Kevin Rupy, Vice President, Law and Policy,
USTelecom
Chairman Thune, Ranking Member Nelson, Members of the Committee,
thank you for giving me the opportunity to appear before you today.
My name is Kevin Rupy, and I serve as Vice President of Law and
Policy at USTelecom. Over the last several years, USTelecom and our
member companies have been tremendously focused on the robocall issue,
and we share the Committee's concern about the problems associated with
phone-based impostor scams targeting consumers. Scammers can use Caller
ID spoofing to mask their identity and location, giving their target a
false sense of confidence about who is calling.
In this ongoing battle against criminal robocallers, there have
been four important developments over the last year that are
particularly significant.
First, the industry-led, ecosystem-wide Robocall Strike Force
issued its report to the Federal Communications Commission on October
26, 2016. Comprehensive follow-up reports by the industry groups
continuing the work started by the Strike Force were delivered to the
FCC last year on April 28, 2017. These reports, taken together,
catalogue industry's substantial efforts to advance the battle against
illegal robocalls. These reports hold a significant amount of good news
for consumers. For example, the reports note that the SHAKEN/STIR
standards development for the next generation of robocall mitigation
tools that the industry had initiated prior to the Robocall Strike
Force, were accelerated by six months. These standards, which
incorporate caller-ID authentication capabilities into the network and
consumer devices, have entered the industry testing phase. In addition,
the North American Numbering Council (NANC)--a Federal Advisory
Committee that counsels the FCC on numbering issues--is nearing
completion of its recommendation to the FCC on the SHAKEN governance
framework. Some of the initial testing of the SHAKEN standard is
expected to complete later this year, with potential deployments
anticipated later this year and in 2019.
The reports also highlight the increasing number of tools that are
being developed and actively deployed to consumers, by a growing number
of national voice and device providers. Finally, the reports detail the
efforts of USTelecom's Industry Traceback Group, which is comprised of
a broad range of network providers from the cable, wireline, wireless
and wholesale industries, who are working collaboratively in order to
identify the origin of these calls at their source. Industry's strong
commitment to this effort can be seen its significant growth over the
last year, from just 3 carriers in July, 2016, to 22 providers as of
today.
Second, the reports shows that USTelecom member companies,
independent application developers and a growing number of diverse
companies offer services today that can help older Americans reduce
unknown and potentially fraudulent calls. For example, AT&T has
launched its `Call Protect' service that allows customers with iPhones
and HD Voice enabled Android handsets to automatically block suspected
fraudulent calls. AT&T also offers AT&T Digital Call Protect for IP
wireline phones. Verizon's new Spam Alerts service provides its
wireline customers who have Caller ID--whether they are on copper or
fiber--with enhanced warnings about calls that meet Verizon's spam
criteria by showing the term ``SPAM?'' before a caller's name on the
Caller ID display. And on the wireless side, Verizon has deployed and
continues to expand robocall mitigation features as part of its Caller
Name ID service, including a spam filter that automatically forwards to
voice-mail any calls corresponding to the spam risk level selected by
the customer.
And various carriers have worked with Nomorobo to facilitate their
customers' ability to use that third-party blocking service, such as
Verizon's ``one click'' solution that simplifies customers' ability to
sign up for the service. In fact, at a recent joint FCC and FTC
robocall workshop, it was noted that since 2016, there has been a 495
percent increase in smartphone applications alone for addressing
robocalls.
Third, the FCC recently adopted rules allowing voice providers to
block certain types of calls. USTelecom supported adoption of the rules
and participated fully in the proceeding. One issue the FCC raised is
what protections legitimate callers should have if their calls are
blocked due to the inappropriate scoring of their call. That is an
important topic both for situations where voice providers block numbers
directly, and for blocking services that consumers may opt into in
order to block or filter potentially unwanted calls. It is an issue
USTelecom and its members, and other parts of the robocall labeling/
scoring ecosystem, have been wrestling with for years, and this fall we
hosted a workshop aimed at helping develop ``best practices'' for the
scoring and labelling of calls. A follow-up workshop is scheduled next
month.
Finally, we applaud our Federal government partners in the robocall
fight, who have engaged in a series of enforcement actions against bad
actors that have reinvigorated efforts to curb this illegal activity.
For example, the FCC last year initiated enforcement actions against
three entities that have resulted in more than $200 million in proposed
fines targeting perpetrators of illegal robocalling. The FTC also
continues to engage in a series of complementary enforcement actions
that target the worst of the worst bad actors in this space. These
civil enforcement actions brought by both agencies send a strong and
powerful message to illegal robocallers that they will be located and
brought to justice. USTelecom and its industry partners stand ready to
further assist in these efforts to bring this bad actors to justice.
Indeed, the ultimate goal of USTelecom's Industry Traceback Group is to
identify the source of the worst of these illegal calls, and further
enable further enforcement actions by Federal agencies.
While current Federal enforcement efforts are laudatory, they are
mostly limited to civil enforcement. We believe there is an acute need
for coordinated, targeted and aggressive criminal enforcement of
illegal robocallers at the Federal level. As a result, bad actors
currently engaged in criminal robocall activities are--at most--subject
only to civil forfeitures. Given the felonious nature of their
activities, criminal syndicates engaged in illegal robocalling activity
should be identified, targeted and brought to justice through criminal
enforcement efforts. We believe, in particular, that U.S. Attorneys'
offices across the country should prioritize enforcement where Federal
statutes, such as the Truth in Caller ID Act, are implicated, and
should work closely with the FCC and FTC and international partners in
enforcement cases, particularly when the calls originate outside of the
United States. While a holistic approach is essential to broadly
address the issue of robocalls, robust enforcement efforts targeting
illegal robocallers are most effective since they address the activity
at the source. For example, consumer-centric tools may stop a series of
calls from reaching tens of thousands consumers, whereas root-cause
removal stops millions of calls from ever being sent.
All these recent developments further demonstrate the essential
commitment from a broad range of stakeholders that will be necessary to
effectively mitigate and defeat these scammers. Indispensable industry
stakeholders from a wide range of companies--including cable, wireline,
wireless, and wholesale providers, as well as standards organizations,
equipment manufacturers and apps developers--have advanced a concerted,
broad-based, effort focused on developing practices, technologies and
methods for mitigating phone-based attacks and scams. This coalition
has also expanded its cooperation with equally important stakeholders
within the Federal government and with consumer groups. While our
partners in government play a crucial enforcement role, our partners in
consumer organizations are vital to raising awareness about the tools
available to consumer to help mitigate illegal robocalls.
Industry efforts to address the illegal robocall issue remain
ongoing and extremely energized. Importantly, these efforts are being
undertaken by the necessary broad range of industry stakeholders,
including representatives from the wireline, wireless, wholesale, cable
and app developer community, as well as critically important standards
organizations. The results of these comprehensive industry efforts are
detailed in the industry-led Strike Force report submitted to the
Federal Communications Commission in April of last year. The
collaborative efforts outlined in the report are highly detailed,
extremely comprehensive and warrant more than a brief summary. In order
for the Committee to gain a better and complete understanding of these
efforts, USTelecom is submitting the April Strike Force Report as an
addendum to this written testimony.
In closing, let me again thank the Committee for holding this
timely hearing. We share the Committee's concerns, and we look forward
to our continued work together to address this constantly evolving
challenge.
The Chairman. Thank you, Mr. Rupy.
Mr. Delacourt.
STATEMENT OF SCOTT DELACOURT, PARTNER, WILEY REIN LLP, ON
BEHALF OF THE U.S. CHAMBER INSTITUTE FOR LEGAL REFORM
Mr. Delacourt. Chairman Thune, Ranking Member Nelson, and
members of the Committee, my name is Scott Delacourt, and I am
a partner in the telecommunications, media, and technology
practice at Wiley Rein LLP. I am here today on behalf of the
U.S. Chamber Institute for Legal Reform, or ILR.
The U.S. Chamber is the world's largest business
federation, representing the interests of more than 3 million
businesses of all sizes and sectors. ILR is an affiliate of the
U.S. Chamber that promotes civil justice reform. Thank you for
the opportunity to testify today about abusive robocalls and
why legitimate businesses trying to communicate with their
customers who do not make these types of calls need Telephone
Consumer Protection Act reform.
I would like to make three points today.
First, TCPA class-action litigation has harmed consumers
and legitimate businesses while doing little to reduce illegal
and abusive robocalling.
Second, the D.C. Circuit's recent decision vacating
portions of the FCC's 2015 Omnibus TCPA Order presents a
sensible roadmap for interpreting the TCPA in a way that
provides clear guidance to consumers and businesses.
Third, the FCC should follow the court's guidance, clarify
the TCPA's requirements, and focus on bad actors.
Illegal and abusive robocalls continue to be a menace and a
top complaint of consumers across the U.S. These calls
originate with bad actors, and ILR does not condone the
conduct. Customers are the lifeblood of commerce, and
successful businesses avoid practices that customers revile.
U.S. businesses have no interest in engaging in abusive
practices. Indeed, businesses fear the brand and customer
relationship damage of being cast as an illegal and abusive
robocaller.
On the other hand, ILR is concerned about businesses being
able to communicate with their customers through the use of
modern technology in an efficient and cost-effective manner.
Consumers expect timely contemporary communications from the
companies with whom they choose to do business. Unfortunately,
the TCPA has become an obstacle, preventing legitimate and
lawful communications between businesses and their customers.
Businesses are in the crosshairs of potential litigation each
time they pick up the phone or send a text message.
The TCPA prohibits making calls to wireless telephone
numbers using any automatic telephone dialing system, or ATDS,
without the prior express consent of the called party. The act
focused on technology, not bad conduct, such as harassment or
fraud. Ambiguity over what constitutes an ATDS has become a
source of unnecessary class-action litigation while doing
little to stop truly abusive robocalls. Indeed, the number of
TCPA case filings exploded to 4,860 in 2016, and TCPA
litigation grew 31.8 percent between 2015 and 2016.
Much of the litigation targets legitimate companies, many
of which are well-known brands, that have committed marginal or
unavoidable violations instead of the true bad actors, scam
telemarketers, offshore operations, and fraudsters who operate
through thinly capitalized and disappearing shell companies.
These latter activities are of little interest to class-action
lawyers.
Abusive litigation targeting legitimate companies has
devastating effects, as the TCPA's uncapped statutory damages
can lead to multimillion-dollar judgments. Often consumers do
not even collect from the judgment funds established to
remediate harm, making class-action lawyers the only winners.
Ironically, such litigation ultimately hurts the consumers it
is intended to protect, as the costs are passed on in the form
of increased costs of goods and services.
The Federal Communications Commission's implementation of
the TCPA to some degree has contributed to the problem. In its
2015 omnibus order, the FCC expanded the types of devices that
are considered ATDS to include equipment with computing
capability or to which computing capability might be added, and
expansive reading that potentially sweeps in everyday devices
like smartphones and tablets, creating major uncertainty for
businesses. Indeed, the FCC's order contributed to a 46 percent
increase in TCPA litigation.
The D.C. Circuit's decision last month in ACA International
v. FCC, in which the U.S. Chamber was a petitioner, overturned
key provisions of the FCC's order, including the agency's
definition of an ATDS, which the court described as utterly
unreasonable. The decision includes a sensible roadmap for how
the FCC might interpret the TCPA in a manner that is clear and
understandable, significantly reducing frivolous class-action
litigation. This decision provides an opportunity for the FCC
to revisit and clarify its approach to the TCPA. Following the
D.C. Circuit's approach would provide guidance and clarity to
businesses, and allow regulators, law enforcement, and courts
to focus on the bad actors who are the source of the
robocalling problem.
Thank you for the opportunity to testify today. And I look
forward to your questions.
[The prepared statement of Mr. Delacourt follows:]
Prepared Statement of Scott Delacourt, Partner, Wiley Rein LLP,
On Behalf of the U.S. Chamber Institute for Legal Reform
I. Introduction
Chairman Thune, Ranking Member Nelson, and members of the
Committee. My name is Scott Delacourt. I am a Partner in the
Telecommunications, Media, and Technology Practice at Wiley Rein LLP,
and I am here on behalf of the U.S. Chamber Institute for Legal Reform
(``ILR''). The U.S. Chamber is the world's largest business federation,
representing the interests of more than three million businesses of all
sizes and sectors, as well as state and local chambers and industry
associations. ILR is an affiliate of the U.S. Chamber that promotes
civil justice reform through regulatory, legislative, judicial, and
educational activities at the global, national, state, and local
levels. Thank you for the opportunity to testify today about abusive
robocalls, and why legitimate businesses trying to communicate with
their customers, who are not making these types of calls, desperately
need the Telephone Consumer Protection Act (``TCPA'') reformed.
I would like to make three points today:
First, TCPA class-action litigation has harmed consumers and
legitimate businesses while doing little to reduce illegal and
abusive robocalling.
Second, the D.C. Circuit's recent decision vacating portions
of the FCC's 2015 Omnibus TCPA Order presents a sensible
roadmap for interpreting the TCPA in a way that provides clear
guidance to consumers and businesses.
Third, the FCC should follow the court's guidance, clarify
the TCPA's requirements, and focus on bad actors.
Illegal and abusive robocalls continue to be a menace and a top
complaint of consumers across the U.S. These calls originate with bad
actors, and ILR does not condone the conduct. The ILR's members--a
broad cross-section of American business--share consumers' concern.
Customers are the life-blood of commerce, and successful businesses
avoid practices that customers revile. U.S. businesses have no interest
in engaging in abusive practices. Indeed, businesses fear the brand and
customer relationship damage of being cast as an illegal and abusive
robocaller.
On the other hand, ILR is concerned about businesses being able to
communicate with their customers through the use of modern technology,
in an efficient and cost-effective manner, while consumers desire and
expect timely, contemporary communications from the companies with whom
they choose to do business. Unfortunately, the TCPA has become an
obstacle, preventing legitimate and lawful communications between
businesses--large and small--and their customers and has placed
businesses in the crosshairs of potential litigation each time they
pick up the phone or send a text message.
The TCPA prohibits making phone calls to wireless telephone numbers
``using any automatic telephone dialing system'' (``ATDS'') without the
prior express consent of the called party. The Act focuses on
technology, not bad conduct such as harassment or fraud. Ambiguity over
the technology used or what constitutes an ATDS has become a source of
unnecessary and sometimes abusive class-action litigation, burdening
how businesses reach their customers, while doing little to stop truly
abusive robocalls. Indeed, the number of TCPA case filings exploded to
4,860 in 2016, and TCPA litigation grew 31.8 percent between 2015 and
2016. Much of this litigation targets legitimate companies--many of
which are well-known brands--that have committed marginal or
unavoidable violations, instead of the true bad actors: scam
telemarketers, offshore operations, and fraudsters who operate through
thinly-capitalized and disappearing shell companies. These latter
activities are of little interest to class-action lawyers.
Abusive litigation targeting legitimate companies has devastating
effects, as the TCPA's uncapped statutory damages can lead to multi-
million-dollar judgments. Often consumers do not even collect from the
judgment funds established to remediate harm, making class-action
lawyers the only winners.\1\ Ironically, such litigation ultimately
hurts the consumers it is intended to protect as the costs are passed
along in the form of increased prices for goods and services.
---------------------------------------------------------------------------
\1\ For example, one survey of Federal TCPA settlements found that
in 2014, the average attorneys' fees awarded in TCPA class action
settlements was $2.4 million, while the average class member's award in
these same actions was $4.12. Wells Fargo Ex Parte Notice, filed
January 16, 2015, in CG Docket No. 02-278, p. 19, available at http://
apps.fcc.gov/ecfs/document/view?id=60001016697. One of the most recent
examples of the lucrative success that plaintiffs' attorneys continue
to achieve in TCPA class actions includes an award of $15.26 million in
fees. Plaintiffs;' counsel originally petition for an award in amount
equal to one-third of the final common fund total. Aranda et al., v.
Caribbean Cruise Line, Inc. et al., No. 12-04069, 2017 U.S. Dist. LEXIS
52645 (N.D. Ill., April 6, 2017),
---------------------------------------------------------------------------
The Federal Communications Commission's (``FCC'') implementation of
the TCPA, to some degree, has contributed to this problem. In its 2015
Omnibus Order, the FCC expanded the types of devices that are
considered ATDS to include equipment with computing capability or to
which computing capability might be added--an expansive reading that
potentially sweeps in everyday devices like smart phones and tablets,
creating major uncertainty for businesses. Indeed, the FCC's Omnibus
Order contributed to a 46 percent increase in TCPA litigation.
The D.C. Circuit's decision last month in ACA Int'l v. FCC, in
which the U.S. Chamber was a petitioner, overturned certain key
provisions of the FCC's Omnibus Order, including the agency's
definition of an automated telephone dialing system (``ATDS''), which
the court described as ``utterly unreasonable.'' \2\ The decision
includes a sensible roadmap for how the FCC might interpret the TCPA in
a manner that is clear and understandable, significantly reducing
frivolous class-action litigation. This decision provides an
opportunity for the FCC to revisit and clarify its approach to the
TCPA. Following the D.C. Circuit's approach would provide guidance and
clarity to businesses, and allow regulators, law enforcement, and
courts to focus on the bad actors who are the source of the robocalling
problem.
---------------------------------------------------------------------------
\2\ ACA Int'l v. FCC, No. 15-1211, slip op. at 15 (D.C. Cir., Mar.
16, 2018).
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II. Uncertainty Regarding the Requirements of the TCPA Has Led to
Unnecessary Litigation that Does Little to Deter Robocalls
Congress enacted the TCPA in 1991 to stop abusive cold-call
telemarketing and fax-blast spamming.\3\ In promulgating its initial
rules implementing the Act, the Commission acknowledged the TCPA's goal
of ``restrict[ing] the most abusive telemarketing practices.'' \4\ The
Supreme Court recognized that ``Congress determined that Federal
legislation was needed because telemarketers, by operating interstate,
were escaping state-law prohibitions on intrusive nuisance calls.'' \5\
Unfortunately, the Commission's implementation of the Act over many
years has fostered a whirlwind of litigation. Interpretations by courts
and the FCC have strayed far from the statute's text, Congressional
intent, and common sense, turning the TCPA into a breeding ground for
frivolous lawsuits brought by serial plaintiffs and their lawyers, who
have made lucrative businesses out of targeting U.S. companies.\6\ The
number of TCPA case filings exploded to 4,860 in 2016, and TCPA
litigation grew 31.8 percent between 2015 and 2016.\7\ The focus of
these lawsuits is often legitimate companies and well-known brands who
have committed accidental or unavoidable violations. As then-
Commissioner Ajit Pai highlighted, the Los Angeles Lakers were hit with
a class-action lawsuit from fans who received text messages confirming
receipt of fan-originated texts.\8\ Similarly, a ride-sharing service
was sued for texts confirming receipt of ride requests.\9\ And Mammoth
Mountain Ski Area was sued for calling a group of litigants who had
previously provided consent.\10\
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\3\ See S. Rep. 102-178 at 1-2 (1991) (stating that the purpose of
the TCPA is to ``plac[e] restrictions on unsolicited, automated
telephone calls to the home'' and noting complaints regarding
telemarketing calls); H.R. Rep. No. 102-317 at 6-7 (1991) (citing
telemarketing abuse as the primary motivator for legislative action
leading to the TCPA). See also Comments of the U.S. Chamber and ILR,
Rules and Regulations Implementing the Telephone Consumer Protection
Act of 1991, CG Docket No. 02-278, at 2-3 (filed Mar. 10, 2017).
\4\ See Rules and Regulations Implementing the Telephone Consumer
Protection Act of 1991, Report and Order, 7 FCC Rcd 8752, n.24 (Oct.
16, 1992) (``1992 Report and Order'').
\5\ Mims v. Arrow Financial Services, LLC, 565 U.S. 368, 370 (2012)
(also citing the Preamble of the TCPA) (emphasis added); see also
Emanuel v. Los Angeles Lakers, Inc., 2013 WL 1719035, at *3 (``Courts
``broadly recognize that not every text message or call constitutes an
actionable offense; rather, the TCPA targets and seeks to prevent the
proliferation of intrusive, nuisance calls.'') (internal quotations
omitted).
\6\ See Letter from ACA International et al to the Members of the
U.S. House of Representatives, (Mar. 8, 2017), http://
www.instituteforlegalreform.com/uploads/sites/1/TCPA_Coalition
_Letter_FICALA_to_House.pdf. For examples, Craig Cunningham of
Nashville, according to news reports, has filed approximately 83 TCPA
lawsuits since 2014--including 19 in 2017. He has three cell phones he
uses to compile TCPA claims. John O'Brien, Phony Lawsuits: Man Has
Filed 80 Lawsuits And Uses Sleuthing Skills To Track Down Defendants,
Forbes, Nov. 1, 2017, https://www.forbes.com/sites/legalnewsline/2017/
11/01/phoney-lawsuits-man-has-filed-80-law
suits-and-uses-sleuthing-skills-to-track-down-defendants/#456cd2a76be7;
A U.S. Magistrate judge found Jan Konopca, a serial plaintiff who has
filed 31 lawsuits in New Jersey Federal court, was actively seeking the
calls. Mr. Konopca earned approximately $800,000 for his endeavors and
has even claimed that he is no longer eligible for Social Security
Disability benefits because of his TCPA litigation. John O'Brien, Phony
Lawsuits: Comcast Fighting For Access to `Professional' Plaintiff's
Prior Testimony, Forbes, May 31, 2017, https://www.forbes.com/sites/
legalnewsline/2017/05/31/phoney-lawsuits-comcast-fighting-for-access-
to-professional-plaintiffs-prior-testimony/#18a02fba727c; see also John
O'Brien, Phony Lawsuits: How a Polish immigrant apparently sued his way
to $800K, Forbes, Mar. 15, 2017, https://legalnewsline.com/stories/
511092959-phoney-lawsuits-how-a-polish-immigrant-apparently-sued-his-
way-to-800k; Melody Stoops began her TCPA ``business'' by collecting at
least 35 cellphones that she stored in a shoebox. Though she lived in a
small town in Central Pennsylvania, she used Florida area codes when
she registered for a new phone number for each. By admitting her
scheme, Stoops lost her standing to sue, a Pennsylvania judge ruled in
2015. If the calls were the goal, then she experienced no harm when she
received them, it was determined. John O'Brien, Phony Lawsuits: A
Federal Law is Giving Litigious People A New Income Stream, Forbes,
Mar. 14, 2017, https://www.forbes.com/sites/legalnewsline/2017/03/14/
phoney-lawsuits-a-federal-law-is-giving-litigious-people-a-new-income-
stream/#6312998a68ee; see also John O'Brien, Phony Lawsuits: A `Most
Profitable' Scheme Has TCPA Plaintiff On Track For One Last Payday,
Forbes, Nov. 27, 2017, https://www.forbes.com/sites/legalnewsline/2017/
11/27/phoney-lawsuits-a-most-probable-scheme-has-tcpa-plaintiff-on-
track-for-one-last-payday/#7787c5823ba1.
\7\ See 2016 Year in Review: FDCPA Down, FCRA & TCPA Up, WebRecon
LLC (2018), https://webrecon.com/2016-year-in-reviewfdcpa-down-fcra-
tcpa-up/.
\8\ Rules and Regulations Implementing the Telephone Consumer
Protection Act of 1991 Declaratory Ruling and Order, 30 FCC Rcd 7961,
8073 (2015) (``Omnibus Order'') (dissenting statement of Commissioner
Ajit Pai).
\9\ Id.
\10\ Scaling the 'Mountain' of TCPA Lawsuit Abuse, U.S. Chamber
Institute for Legal Reform (Apr. 8, 2015), http://
www.instituteforlegalreform.com/resource/scaling-the-mountain-of-tcpa-
lawsuit-abuse (explaining that the plaintiffs provided consent before a
new FCC rule clarifying the prior express consent requirement took
effect).
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TCPA litigation has even gone so far as to subject nonprofit
organizations to frivolous lawsuits. A blood bank, a state chapter of
the Special Olympics, and the Breast Cancer Society have all faced TCPA
suits.\11\ Recently, the American Heart Association was handed a
``victory'' when a court in Louisiana found the plaintiff consented to
the text messages she received and that the content of the messages was
informational, not promotional.\12\ As a result, the TCPA is forcing
such organizations to utilize and waste precious staff and monetary
resources to handle needless litigation rather than devoting those
resources to life-saving research.
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\11\ See Murphy v. DCI Biologicals Orlando, LLC, et. al, 797 F.3d
1302, 1308 (11th Cir. 2015); see also Wengel v. DialAmerica Marketing,
Inc., 132 F.Supp.3d 910 (E.D. Mich. Sep. 22, 2015); see also Spiegel v.
Reynolds et al., No. 17-3344 (7th Cir. Nov. 14, 2017).
\12\ Reese v. Anthem Inc., et al., No. 2:17-cv-07940 (E.D. La Mar.
12, 2018).
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Because the TCPA provides for uncapped statutory damages,
defendants in these lawsuits face multi-million-dollar judgments.\13\
Earlier this month, Outcome Health agreed to a $2.9 million settlement
to end a class-action lawsuit over daily automated nutrition tips it
texted to recipients who had signed up to receive such information. In
another case, Lake City Industrial Products, Inc., a small, family-
owned company from Michigan, faced over $5 million in statutory damages
for faxes it sent believing they were legal.\14\ Other well-known
companies, like Capital One Bank, AT&T, MetLife, Papa John's Pizza and
Walgreen's Pharmacy, have faced settlements of over ten million
dollars, the largest of which was $75 million.\15\ TCPA lawsuits filed
in the 17-month period after the 2015 FCC Omnibus Declaratory Ruling
reached approximately 40 different industries.\16\
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\13\ See The Juggernaut of TCPA Litigation: The Problems with
Uncapped Statutory Damages, U.S. Chamber Institute for Legal Reform at
12 (October 2013), http://www.institutefor
legalreform.com/uploads/sites/1/TheJuggernautofTCPALit_WEB.PDF (``What
is clear is that the TCPA's uncapped statutory damages pose a real
threat to large and small well-intentioned American companies who have
potentially millions of customers and who often need to communicate
with those consumers.'').
\14\ Id. at 10.
\15\ TCPA Litigation Sprawl: A Study of the Sources and Targets of
Recent TCPA Lawsuits, U.S. Chamber Institute for Legal Reform at 10
(Aug. 2017), http://www.instituteforlegalreform.com/uploads/sites/1/
TCPA_Paper_Final.pdf.
\16\ Id. at 3. In total 3,121 cases were examined. Over 1,000 of
those cases--more than one-third of the total lawsuits reviewed--were
brought as nationwide class actions. Id.
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Compliance with the TCPA has been frustrated by uncertain and
shifting standards as the FCC's interpretations have evolved over
decades, leaving a tangled web of obligations. Businesses making good-
faith efforts to comply may nevertheless be subject to crippling
litigation. Regulatory uncertainty and enormous settlements enriching
class-action lawyers benefit neither consumers nor the economy. As FCC
Commissioner Michael O'Rielly has observed, needless ``enforcement
actions or lawsuits'' chill efforts by ``good actors and innovators''
to develop ``new consumer-friendly communications services.'' \17\
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\17\ Commissioner O'Rielly, TCPA: It is Time to Provide Clarity,
FCC Blog (Mar. 25, 2014, 2:10 PM), https://www.fcc.gov/news-events/
blog/2014/03/25/tcpa-it-time-provide-clarity
---------------------------------------------------------------------------
The FCC's Omnibus Order added to the uncertainty. The TCPA
prohibits making a call ``using any automatic telephone dialing
system'' without the prior express consent of the called party.\18\ The
Act defines ``automatic telephone dialing system'' as ``equipment which
has the capacity to store or produce telephone numbers to be called,
using a random or sequential number generator; and to dial such
numbers.'' \19\ Uncertainty over the meaning of ``capacity'' led the
FCC to adopt an order construing the term. Rather than providing
clarity, however, the FCC adopted a sweeping interpretation including
devices that have both the present and potential capacity to store or
produce telephone numbers to be called, while also including devices
that can generate random or sequential numbers and those that
cannot.\20\ This baffling interpretation raised the prospect that
everyday devices like smart phones and tablets could be ATDS subject to
the TCPA's prohibitions because of their potential capacity to store or
produce telephone numbers to be called. This construction conflicted
with the text, history, and purpose of the TCPA, and contributed to a
46 percent increase in TCPA litigation, with class actions comprising
approximately one-third of those filings.\21\
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\18\ 47 U.S.C. Sec. 227(b)(1)(A).
\19\ Id. Sec. 227(a)(1)(A)-(B).
\20\ Omnibus Order, 10-15.
\21\ See TCPA Litigation Sprawl at 2, 4.
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III. The D.C. Circuit Vacated the FCC's Omnibus Order and Provided a
Sensible Roadmap for Moving Forward
Numerous petitioners, including the U.S. Chamber of Commerce,
sought judicial review of the Omnibus Order's unjustifiable expansion
of the TCPA, arguing that the regime was unreasonable, impractical, and
inconsistent with the statute's text. The D.C. Circuit largely agreed
and vacated portions of the Omnibus Order in ACA Int'l v. FCC.
Significantly, the court unanimously set aside the Commission's
interpretation of ATDS, holding that the interpretation of capacity was
``utterly unreasonable,'' \22\ ``incompatible with'' the statute's
goals, and ``impermissibly'' expansive.\23\ The interpretation was so
unreasonable, it was ``considerably beyond the agency's zone of
delegated authority.'' \24\ The court also found unanimously that the
Commission had offered an inconsistent and ``inadequa[te]'' explanation
of what features constitute an [ATDS],\25\ ``fall[ing] short of
reasoned decision making.'' \26\
---------------------------------------------------------------------------
\22\ Slip op. at 19.
\23\ Slip op. at 23.
\24\ Slip op. at 19.
\25\ Slip op. at 29.
\26\ Slip op. at 25.
---------------------------------------------------------------------------
The opinion also provided a roadmap for how the FCC should proceed.
The court pointed to the interpretation of ``make any call . . .
using'' offered by Commissioner Michael O'Rielly in his Omnibus Order
dissent, which would require that dialing equipment ``be used as an
[ATDS] to make the calls.'' \27\ In other words, the calling equipment
must actually use ATDS capabilities to make the call. Although the
court did not explicitly endorse this approach, as the issue was not
raised in the appeal, it noted that this construction would
``substantially diminish the practical significance of the Commission's
expansive understanding of `capacity' in the [ATDS] definition.'' \28\
This is a significant signal to the FCC and the courts about the best
reading of the TCPA.
---------------------------------------------------------------------------
\27\ Omnibus Order (statement of Commissioner O'Rielly) (emphasis
in original).
\28\ Slip op. at 30.
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IV. The FCC Should Adopt a New Approach to the TCPA that Protects
Legitimate Business Calls and Focuses on Bad Actors
The D.C. Circuit's decision provides an opportunity for the FCC to
rethink its approach to the TCPA. Confusing regulations and
interpretations of the statutory text have contributed to a rise in
TCPA litigation while doing little to reduce illegal and abusive
robocalling. At the same time, increased liability exposure and
compliance costs have deterred businesses from reaching out to their
customers. A renewed focus on the TCPA's statutory text offers a path
forward to better protect consumers and businesses that operate in good
faith.
Adopting the D.C. Circuit's suggested approach on what constitutes
an ATDS would realign the interpretation of the TCPA to its text and
purpose. This straightforward reading will ensure that liability
attaches only when ATDS capabilities are used to make a call, rather
than sweeping in calls made using smartphones, tablets, and other
devices that conceivably could be modified to support autodialing at
some point in the future. Significantly, it would provide businesses
with clear guidance on the type of equipment they can use to contact
their customers. A device's theoretical or potential capabilities would
not be relevant to determining whether it is an ATDS. Instead, the
inquiry should focus only on the functions used to make the call or
calls in question. This clarification will help businesses avoid
unnecessary litigation over whether they used an ATDS and help
consumers differentiate whether they are targets of an illegal robocall
campaign or receiving a routine business communication. Reducing the
amount of TCPA litigation will also free up resources to focus on the
actual bad actors who are the source of abusive robocalls. With fewer
complaints, enforcement resources will not be wasted on investigating
legitimate business communications and can be used to find and punish
illegal robocallers.
The TCPA was never intended to make all mass calling illegal. The
legislative history reflects that the Act was intended to achieve a
balance between the need for legitimate businesses to lawfully
communicate with their customers and protecting consumers from certain
abusive uses of the telephone system. There are bad actors who abuse
the openness of our communications infrastructure, including through
Caller ID spoofing and other illegal activities. The TCPA sought to
prevent the use of specific equipment to engage in illegal and abusive
conduct--random or sequential cold calling that tied up telephone
networks, including emergency lines, and harassed consumers. The
construction of ATDS suggested by the D.C. Circuit and supported by
this testimony would categorically prohibit those abuses. At the same
time, it would provide clear guidance to businesses on how they may
lawfully communicate with their customers.
The fact that the D.C. Circuit's preferred definition of ATDS does
not cover as much equipment as the definition the court struck down in
no way means that consumers are unprotected, or even less protected.
The TCPA contains within itself the means of protection: the Do Not
Call list. Any consumer lawfully contacted by a business using
equipment that is not an ATDS and who does not desire to be called may
ask the caller to be placed on the caller's company-specific Do Not
Call list. Those consumers who proactively decide they do not want to
receive calls--whether from an ATDS or not--may subscribe to the
National Do Not Call List. Tens of millions of Americans already have.
V. Conclusion and Recommendations
As Congress and the FCC look for ways to reduce abusive robocalls,
reforming the TCPA is an important step. Reducing the amount of
unnecessary litigation plaguing legitimate businesses will shift the
focus of enforcement to the actual bad actors who are the root cause of
illegal robocalls. In this regard, ILR commends the FCC for taking
action to give telephone companies the authority to use innovative
solutions to block illegal robocalls. The D.C. Circuit has provided
both an opportunity and a roadmap to further the FCC's work of focusing
resources at the root of the robocalling problem. Following that
guidance will help businesses avoid burdensome litigation, restore the
TCPA to its original purpose, and redirect resources and attention
towards reducing abusive robocalls.
As previously proposed by ILR, the following updates to the TCPA
should be taken under consideration.
Statute of Limitations: The TCPA contains no statute of
limitations, and so has fallen into the four-year default,
which makes no sense for calls/faxes that are supposedly
invasions of privacy that the consumer knows about at the
moment they are placed. Class actions reach staggering amounts
of damages because class plaintiffs seek four years' worth of
calling data and liability. The TCPA's time to bring suit
should be reasonably limited, as is the case with the other
Federal statutes providing private rights of action for
statutory damages.\29\
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\29\ See, e.g., Electronic Funds Transfer Act (15 U.S.C.
Sec. 1693), Section 1693(m) (statute of limitations--1 year); Fair Debt
Collection Practices Act (15 U.S.C. Sec. 1692), Section 1692(k)
(statute of limitations--1 year).
Capping Statutory Damages and Adding Provisions for Reasonable
Attorneys' Fees: Similar to every other Federal statute
providing statutory damages and a private right of action to
consumers to seek those damages, the TCPA should have a cap on
the amount of individual and class action damages that can be
sought.\30\ There is no better way to curb litigation abuse,
bring the TCPA in line with its sister statutes, and avoid
unconstitutional and excessive fines for technical violations
causing no actual harm.
---------------------------------------------------------------------------
\30\ See, e.g., Electronic Funds Transfer Act (15 U.S.C.
Sec. 1693), Section 1693(m); Fair Debt Collection Practices Act (15
U.S.C. Sec. 1692), Section 1692(k); Truth in Lending Act (15 U.S.C.
Sec. 1631 et. al), Section 1640; Fair Credit Reporting Act (15 U.S.C.
Sec. 1681 et. al.), Section 1681(o). (Several of these statutes also
permit defendants to recover costs/fees when actions are shown to have
been brought in bad faith.)
Affirmative Defenses: As businesses are targeted for calls
under Section 227(b), as well as for the 227(c) calls that
Congress knew could be made in error by a business acting in
good faith to follow the appropriate policies and procedures,
the affirmative defenses available in Section 227(c) should
also be imported into Section 227(b) to provide protection to
---------------------------------------------------------------------------
businesses working in good faith to comply with the TCPA.
Capacity: The ``capacity'' of an ATDS should be interpreted for
past calls as written in the text of the statute, meaning only
those devices that have the actual ability to randomly/
sequentially dial telephone calls would be actionable. And if
Congress wishes to limit some other sort of calling
technologies or text messages, new and more precise language
should be drafted, vetted, and implemented after a notice
period to companies so that they can comply with statutory
requirements.
Reassigned or Wrongly-Provided Number: Businesses should not be
punished via TCPA lawsuits when they, in good faith, call a
customer-provided phone number that now belongs to a new party
unless and until the recipient informs the caller that the
number is wrong and the business has a reasonable time to
implement that change in its records. (If, after that notice
and reasonable time the company continues to call, then lack of
prior consent would be established for future calls.)
Vicarious Liability: The FCC has interpreted the TCPA to allow
``on behalf of'' liability for prerecorded/autodialed calls,
something not specifically provided for in the statute. Among
other things, the TCPA should be revised to define any such
vicarious liability so that it would exist only against the
appropriate entities--those persons who place the calls, or who
retain a telemarketer to place calls, or who authorize an agent
to place calls on their behalf.
Bad Actors: The TCPA should be reformed to focus on the actual
bad actors (i.e., fraudulent calls from ``Rachel from
Cardmember Services,'' with spoofed numbers in Caller ID fields
to hide the identity of caller), instead of companies trying to
contact their consumers for a legitimate business purposes.
Address New Technologies, Such As Text Messaging: A text
message is not the same as a call, and courts are wrong in
treating them equally. Should Congress wish to set rules on
text messaging within the TCPA, it should do so through the
regular channels of drafting, vetting, and implementing new
statutory language.
Revocation: If a consumer that has provided a telephone number
to a company no longer wishes to receive communications at that
number, there should be a set process (as in the Fair Debt
Collection Practices Act) on how the business should be told of
the revocation, and a reasonable time for the company to
implement that change.
The changes discussed above--which would help to protect American
companies from expensive and damaging litigation abuse--would not risk
any of these repercussions. Thus, we urge this Committee to revisit the
TCPA to bring this 20th Century statute in line with 21st Century
challenges. Twenty-five years have passed, and it is evident that the
TCPA has had a negative impact on businesses that Congress never
intended when first enacting this law in 1991. We appreciate the
Committee's calling of today's hearing and stand ready to work with you
on this important issue.
Thank you for the opportunity to testify. I look forward to
answering your questions.
The Chairman. Thank you, Mr. Delacourt.
Ms. Saunders.
STATEMENT OF MARGOT FREEMAN SAUNDERS, SENIOR COUNSEL, NATIONAL
CONSUMER LAW CENTER
Ms. Saunders. Chairman Thune, Senator Blumenthal, and
members of the Committee, thank you for inviting me to testify
today. I am here on behalf of the National Consumer Law
Center's low-income clients as well as six other national
consumer advocacy groups.
My testimony, my written testimony, begins with a story of
a woman in Florida who received over 1,800 calls from Conns
Appliances. She was repeatedly--she repeatedly requested that
these calls stop, and she was repeatedly bombarded with
continued calls. At the end of the testimony, there's a
calendar that shows that these 1,800 calls were made over a few
months, including six or seven calls often daily on weekends.
She--Conns--she was actually behind, but she was making her
payments on the appliances.
I start with that because one of the main points that I
want to make today is that robocalls that are scams are
significantly a problem, but they are not by any means the only
problem that consumers are dealing with.
On page 3 of my testimony, I show that the number of--one
of the problems is simply that the number of robocalls is
escalating tremendously. We start from less than a billion
calls a month in September 2015 to now over 3 billion robocalls
a month in March 2018. That's one of the primary callers--
primary reasons that we have this problem.
But we also know, if you look at Table 2 on page 4 of my
testimony, who the robocallers are. The top 20 robocallers
include two scammers and 17 other callers, 15 of whom are debt
collectors and are not covered by the Federal Fair Debt
Collection Practices Act, so that the only law that protects
consumers from the onslaught of these callers is the Telephone
Consumer Protection Act.
But debt collection calls are not the only problem. In
Table 3 of my testimony, I show what the types of calls are.
About 28 percent are alerts and reminders, and as pointed out
by other members of this panel, many of those calls are wanted
by consumers, and the ability to consent and revoke is a very
valuable tool for consumers because they want to be able to
consent to reminders from their doctors and their pharmacies
about health care matters.
But the rest of the calls in that list, payment reminders,
which is a euphemism for debt collectors, telemarketing, and
scams, are generally unwanted calls and are rejected by
consumers. And consumers very much need the ability to not only
consent, but also to revoke consent, and much of the
robocallers' position legally these days is that consumers,
once they have consented, no longer have the ability to revoke
that consent, and that is a critical piece of the Telephone
Consumer Protection Act that was affirmed by the D.C. Circuit
and needs to be maintained by the FCC.
Later in my testimony I go through example after example of
telemarketing calls that are--that were only addressed, not by
public enforcement, but by private class actions. For example,
Robertson v. Navient Solutions, Navient called Ms. Robertson
667 times, over 500 of which were after she requested they--
she--they stop calling.
Telemarketers remain a real problem, and these are not
scammers, these are telemarketers selling real products. On
page 8, there's an example of a case brought against Mortgage
Investors Corporation for 64 million illegal telemarketing
calls. This was a class action that stopped the caller and
resulted in payment to all of the people who were harmed. The
autodialer--the mechanism here was an autodialer with a human
agent on the other end.
Smith v. State Farm was another telemarketing litigation
that was a class action that was only resolved by class
actions. On Table 4 on page 10, I point out that while TCPA
lawsuits have gone up, they've gone up in far less--a far lower
proportion to the number of complaints and the number of
robocalls that has escalated.
We have suggestions at the end of the testimony for how the
FCC should proceed. And I'm happy to answer any questions.
Thank you.
[The prepared statement of Ms. Saunders follows:]
Prepared Statement of Margot Freeman Saunders, Senior Counsel,
National Consumer Law Center, On behalf of the low-income clients of
the National Consumer Law Center; Americans for Financial Reform,
Consumer Federation of American, National Association of Consumer
Advocates, Public Citizen, Public Knowledge and U.S. PIRG
Chairman Thune, Senator Nelson, and Members of the Committee, I
appreciate the opportunity to testify today on the importance of
maintaining the integrity of the Telephone Consumer Protection Act
(TCPA) for consumers. I provide my testimony here today on behalf of
the low-income clients of the National Consumer Law Center\1\ (NCLC),
Americans for Financial Reform, Consumer Federation of American,
National Association of Consumer Advocates, Public Citizen, Public
Knowledge and U.S.PIRG.
---------------------------------------------------------------------------
\1\ The National Consumer Law Center (NCLC) is a non-profit
corporation founded in 1969 to assist legal services, consumer law
attorneys, consumer advocates and public policy makers in using the
powerful and complex tools of consumer law for just and fair treatment
for all in the economic marketplace. NCLC has expertise in protecting
low-income customer access to telecommunications, energy and water
services in proceedings at state utility commissions, the FCC and FERC.
We publish and annually supplement nineteen practice treatises that
describe the law currently applicable to all types of consumer
transactions, including Access to Utility Service (5th ed. 2011),
covering telecommunications generally, and Federal Deception Law (3d
ed. 2017), which includes a chapter on the Telephone Consumer
Protection Act. This testimony was prepared with the substantial
assistance of Carolyn Carter and Stephen Rouzer.
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I. The Scope of the Robocall Problem
Unwanted robocalls are an invasion of privacy. As was forcefully
stated by Senator Hollings, the TCPA's sponsor, ``[c]omputerized calls
are the scourge of modern civilization. They wake us up in the morning;
they interrupt our dinner at night; they force the sick and elderly out
of bed; they hound us until we want to rip the telephone right out of
the wall.'' \2\ I speak today for the 4.5 million Americans who
complained last year about the barrage of unwanted robocalls we all
receive.
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\2\ 137 Cong. Rec. 30,821-30,822 (1991) (also quoting Justice
Brandeis, in Olmstead v. U.S., 277 U.S. 438, 479, 48 S. Ct. 564, 72 L.
Ed. 944 (1928), declaring ``the right to be let alone--the most
comprehensive of rights and the right most valued by civilized men'').
See also S. Rep. 102-178, at 5 (1991), reprinted in 1991 U.S.C.C.A.N.
1968, 1972-1973 (``The Committee believes that Federal legislation is
necessary to protect the public from automated telephone calls. These
calls can be an invasion of privacy, an impediment to interstate
commerce, and a disruption to essential public safety services.''); 137
Cong. Rec. S18781-02 (quoting Sen. Hollings as stating ``These calls
are a nuisance and an invasion of our privacy.''); Mims v. Arrow Fin.
Services, L.L.C., 565 U.S. 368, 370 132 S. Ct. 740, 181 L. Ed. 2d 881
(2012) (noting that the TCPA ``bans certain practices invasive of
privacy'').
---------------------------------------------------------------------------
Let me tell you about just one case, which is typical of so many:
Tonya Stevens of Tampa, Florida purchased some appliances from
Conns Appliances, Inc., a Texas company, in late 2014. Although
she was making her payments, they were not always on time.
Nevertheless, over the next fourteen months Conns called Ms.
Stevens on her cell phone 1,845 times, over one hundred times a
month, often as much as eight or nine times a day.\3\ These
calls were made despite Ms. Stevens' repeated requests that
Conns' agent stop calling. During one call, she said, ``I am at
my grandmother's death bed, quit calling.'' Conns' position is
that once Ms. Stevens provided consent to be called on her cell
phone she could never revoke that consent.
---------------------------------------------------------------------------
\3\ As this case is in arbitration, there is no formal complaint.
However, Appendix 1 is a calendar showing the number of times these
calls were made each day and each week.
This case is emblematic of the problem Americans are facing with
robocalls. The calls are unrelenting. The callers will not stop,
despite consumers' pleas. The Federal Trade Commission's (FTC)
``Biennial Report to Congress'' \4\ reveals a surge in consumer
complaints about robocalls in 2017, with 4.5 million complaints filed
in 2017 compared to 3.4 million in 2016. This rise in complaints is
consistent with an increased use of intrusive and disruptive robocall
technology. But the problem is far worse than the FTC's complaint
numbers show. Industry data shows that over two billion robocalls are
made every month, many of which are unwanted and illegal. Over 3
billion robocalls were made just in February 2018. Robocalls increased
from 831 million in September 2015 to 3.2 billion in March 2018--a 285
percent increase in less than three years.
---------------------------------------------------------------------------
\4\ https://www.ftc.gov/system/files/documents/reports/biennial-
report-congress-under-do-not-call-registry-fee-extension-act-2007-
operation-national-do-not/biennial_do_not_call_report_fy_
2016-2017_0.pdf
Congress passed the Telephone Consumer Protection Act \5\ (TCPA) in
1991 in direct response to ``[v]oluminous consumer complaints about
abuses of telephone technology--for example, computerized calls
dispatched to private homes.'' \6\ Yet 27 years later, the problem is
only growing worse. The complaints are still pouring in. Private
litigation and public enforcement have not kept pace with the problem--
both the number of calls and the number of complaints by consumers
increase every month. Robocalls are very inexpensive to make. Callers
can discharge tens of millions of robocalls over the course of a day at
only a penny per call.\7\
---------------------------------------------------------------------------
\5\ 47 U.S.C. Sec. 227.
\6\ Mims v. Arrow Fin. Servs., L.L.C., 565 U.S. 368, 370-371 132 S.
Ct. 740, 181 L.Ed. 2d 881 (2012).
\7\ See, e.g., Robodial.org, which costs 1 cent a call for calls up
to 15 seconds, at https://www.robodial.org/instantpricequote/ (last
accessed Apr. 12, 2018); Call-Em-All Pricing, which quotes pricing from
a high of 6 cents per call to $7.50 per month ``for one inclusive
monthly fee. Call and text as much as you need.'' https://www.call-em-
all.com/pricing (last accessed Apr. 12, 2018).
---------------------------------------------------------------------------
A. Who Is Making These Calls?
The problem of abusive, unwanted robocalls is not limited to scam
calls. Scam calls--calls that are selling products or services they do
not intend to provide, or that are pretexts for identity theft--are
only one small part of the invasive robocall problem in the United
States.
We know who is making robocalls because call-blocking technologies
track the identity of callers. The Robocall Index created by one call-
blocking app provider, YouMail, identifies the biggest robocallers
every month.\8\ The biggest robocallers are not scammers; scammers
actually account for only a small fraction of the robocalls to
consumers in the United States. In March of 2018, only two scam callers
(those marked in bold in Table 2, below) made the list of the top 20
sources of robocalls. Banks, credit card companies, retailers, and debt
collectors, all of whom were collecting debts according to the robocall
blocker, took 17 of the top 20 spots.
---------------------------------------------------------------------------
\8\ The existence of these third-party call-blocking technologies
does not fully address the problem. Unfortunately, many consumers do
not use them. Moreover, many consumers, particularly traditional
landline users, lack access to effective robocall-blocking tools.
Table 2--Top Twenty Robocallers in the United States March 2018 \9\
------------------------------------------------------------------------
------------------------------------------------------------------------
1. Capital One 8. Loan scam 14. Barclaycard
2. Portfolio Recovery 9. AT&T 15. First Premier
Associates 10. Enhanced Recovery Bank
(debt collection) Corporation 16. PayPal
3. Wells Fargo (debt collection) 17. Chase Bank
4. Santander 11. Fingerhut 18. Chase Bank
5. A health insurance 12. Transworld Systems (alternate number)
scam (debt collection) 19. Kohl's
6. Comcast 13. Encore Receivables 20. Citibank
7. Job availability Management
call (debt collection)
(substitute teachers)
------------------------------------------------------------------------
By no means do I intend to minimize the problem with scam calls.
They are a real problem that must be dealt with. But they are also not,
by any measure, the entire problem. In the first two months of 2018,
scam calls accounted for only a quarter of all robocalls:
---------------------------------------------------------------------------
\9\ See YouMail Robocall Index, available at https://
robocallindex.com/(last accessed Apr. 12, 1018). To come up with the
names of the callers, we simply called the numbers listed on the
website to see who answered.
Table 3--Estimated National Robocalls By Type \10\
------------------------------------------------------------------------
Category January February
------------------------------------------------------------------------
Alerts and Reminders 27% 28%
Payment Reminders 33% 32%
Telemarketing 15% 16%
Scams 25% 24%
------------------------------------------------------------------------
This list of robocallers begs the question of which calls are
objected to by consumers. We know the answer from the developers of one
of the leading robocall-blocking apps: YouMail's Robocall Blocker.\11\
All of the calls in the bottom two categories--Telemarketing and
Scams--are routinely blocked by users of the call-blocking program.\12\
Very few of the calls in the first category--Alerts and Reminders--are
blocked. Most of the calls in the second category--Payment Reminders
(which is a polite characterization for the debt collection callers)--
are blocked by their recipients.\13\
---------------------------------------------------------------------------
\10\ Press Release, YouMail, YouMail Releases Detailed Breakdown of
U.S. Robocalls in February (Mar. 21, 2018), available at https://
www.prnewswire.com/news-releases/youmail-releases-detailed-breakdown-
of-us-robocalls-in-february-300616969.html (last accessed Apr. 12,
2018).
\11\ See https://www.youmail.com/home/feature/stop-robocalls (last
accessed Apr. 12, 2018).
\12\ This information was provided by Alex Quilici, CEO of YouMail,
on March 28, 2018.
\13\ Id.
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B. Debt Collection Robocalls are a Huge Problem That Often Only the
TCPA Can Address
As can be surmised from the huge number of debt collection
robocalls made in the U.S., one third of all American consumers have
accounts in collection.\14\ Indeed ACA International, ``a trade group
located in the United States representing collection agencies,
creditors, debt buyers, collection attorneys and debt collection
industry service providers,'' \15\ has been a primary driver of efforts
before the Federal Communications Commission (FCC) to roll back the
consumer protections in the TCPA \16\ both prior to and after the FCC's
2015 Omnibus Order.\17\ This organization was also, of course, the lead
petitioner in the appeal of the FCC's pro-consumer order issued in
2015, which led to the recent decision of the D.C. Circuit Court in ACA
International v. F.C.C.\18\
---------------------------------------------------------------------------
\14\ See Urban Institute, Debt in America: An Interactive Map (last
updated Apr. 5, 2018), available at https://apps.urban.org/features/
debt-interactive-map/ (last accessed Apr. 12, 2018).
\15\ https://en.wikipedia.org/wiki/ACA_International.
\16\ See e.g., ACA International, Petition for Rulemaking of ACA
International (filed Feb. 11, 2014), available at https://
ecfsapi.fcc.gov/file/7521072801.pdf.
\17\ In re Rules and Regulations Implementing the Telephone
Consumer Protection Act of 1991, CG Docket No. 02-278, Report and
Order, 30 FCC Rcd. 7961 (F.C.C. July 2015) [hereinafter 2015 TCPA
Omnibus Order].
\18\ 885 F.3d 687 (D.C. Cir. 2018).
---------------------------------------------------------------------------
It is a common misconception that the Federal Fair Debt Collection
Practices Act \19\ (FDCPA) provides sufficient protections for
consumers against invasive and abusive debt collection calls.
Unfortunately, that is the not case, for several reasons. The primary
reason is that the FDCPA does not cover collection efforts made by
creditors to collect their own debts; it covers only third-party debt
collectors--those collecting debts originally owed to others.\20\ So of
the 20 top robocallers listed in Table 2, only four (those whose names
are in italics) were even covered by the FDCPA. Debt collection calls
by all of the remaining robocallers were not covered by the FDCPA
because they were collecting their own debts.
---------------------------------------------------------------------------
\19\ 15 U.S.C. Sec. 1692.
\20\ 15 U.S.C. Sec. 1692a(6).
---------------------------------------------------------------------------
This leaves the TCPA as the principal Federal law providing
protections against harassing and unrelenting debt collection calls to
consumers' cell phones. Below are just a few examples of the
significance of the problem of debt collector robocallers. All of these
cases are recent; all involve hundreds--if not thousands--of calls; and
all involve multiple calls after repeated requests from the consumer to
stop calling:
1. Robertson v. Navient Solutions.\21\ Shortly after Ms. Robertson
acquired a Certified Nursing Assistant certificate, which she
had funded with student loans, she experienced health problems
and, also, had to care for her dying father. She was unable to
work, and applied for disability. She received a forbearance on
her Federal student loans, but not for the private loans. Ms.
Robertson made payments when she was able. However, payments
did not stop the calls. In total, Navient called Ms. Robertson
a total of 667 times, and called 522 times after she told them
to stop calling. Navient would call back the same day even when
Ms. Robertson would tell the collection agent that she would
not have any money to pay until the following month.
---------------------------------------------------------------------------
\21\ Robertson v. Navient Solutions, Inc., Case No.: 8:17-cv-01077-
RAL-MAP (M.D. Fla. filed May 8, 2017).
2. Gold v. Ocwen Loan Servicing.\22\ The plaintiff consented to
being contacted about his mortgage debt, and answered several
collection calls, but then asked for the calls to stop.
However, the servicer called his cell phone at least 1,281
times between April 2, 2011 and March 27, 2014, after the
repeated requests to stop.
---------------------------------------------------------------------------
\22\ 2017 WL 6342575 (E.D. Mich. Dec. 12, 2017).
3. Montegna v. Ocwen Loan Servicing.\23\ The servicer called the
plaintiff on his cell phone at least 234 times, even after he
requested that the calls stop.
---------------------------------------------------------------------------
\23\ 2017 WL 4680168 (S.D. Cal. Oct. 18, 2017).
4. Todd v. Citibank.\24\ Some time in January 2016, the bank began
calling the plaintiff's cell phone. The calls, often made twice
a day, totaled 350 calls, even after repeated requests to stop
calling. ``The purported injury here is Plaintiff's `privacy,
peace, and quiet' was disturbed by the numerous telephone
calls.'' \25\
---------------------------------------------------------------------------
\24\ 2017 WL 1502796 (D.N.J. Apr. 26, 2017).
\25\ Id. at *8.
---------------------------------------------------------------------------
C. Real Telemarketers Are Making Many of the Unwanted Robocalls
Telemarketing calls are also the source of millions of unwanted,
and illegal, robocalls. Telemarketers with real products to sell (car
insurance, home security networks, even marketing an independent film)
bombard consumers' homes and cell phones with illegal robocalls. It is
important to note that ``real'' telemarketing calls, often with a human
caller at the other end of the phone, are not scammers. Their caller
IDs are sometimes--although not always--truthfully displayed. So
addressing scams and spoofing will not deal with these maddening and
invasive--and illegal--calls.
Often a single consumer is hounded by persistent telemarketing
calls from the same company.\26\ With many telemarketing campaigns,
however, the campaign will make millions of illegal calls, but only one
or two to any given consumer. The only effective way to enforce the
TCPA's protections against these illegal calls is through public
enforcement or private class actions.
---------------------------------------------------------------------------
\26\ See, e.g., Jenkins v. MGage, L.L.C., 2016 WL 4263937 (N.D. Ga.
Aug. 12, 2016) (individual action challenging 150 text messages
promoting events at a nightclub despite 17 requests to stop).
---------------------------------------------------------------------------
That is because the TCPA allows a consumer to recover only $500 to
$1500 per call, and does not require the defendant to reimburse the
consumer for the attorney fees incurred to prosecute the case. As a
result, individual suits regarding just one or two calls are not
economically feasible. (And a million individual suits for a million-
robocall campaign would overwhelm the court system in any event).
One example of a particularly intrusive telemarketing campaign is
the case of Golan v. Veritas Entertainment, decided by a Federal court
in Missouri in 2017.\27\ In its efforts to market a political film, the
company made so many calls in violation of the TCPA--over 3.2 million
calls--that the judge ordered the statutory damages award reduced to
just $10 per call. If he had stuck with $500 per call, the total would
have been $1.6 billion, which he held to be so disproportionate as to
violate due process. In reducing the award, the court noted:
---------------------------------------------------------------------------
\27\ 2017 WL 3923162 (E.D. Mo. Sept. 7, 2017).
This reflects the severity of the offense, a six-day
telemarketing campaign which placed 3.2 million telephone
calls, as well as respecting the purposes of the TCPA to have a
deterrent effect and to account for unquantifiable losses
including the invasions of privacy, unwanted interruptions and
disruptions at home, and the wasted time spent answering
unwanted solicitation calls or unwanted voice messages.\28\
---------------------------------------------------------------------------
\28\ Id. at *4 (emphasis added).
This sentiment was emphasized in another large class action case,
Krakauer v. DISH Network,\29\ in which the court refused to unwind the
jury's award of $400 per call, trebled by the court, for each of 51,000
telemarketing calls. The court pointed out:
---------------------------------------------------------------------------
\29\ 2017 WL 4417957 (M.D.N.C. Oct. 3, 2017).
It is not `grossly excessive' to require Dish to pay treble
damages for the more than 50,000 willful violations it
committed, given the nature of the privacy interests repeatedly
invaded and Dish's continuing disregard for those interests,
the extent of the violations, and the need to advance
reasonable governmental interests in deterring future
violations.\30\
---------------------------------------------------------------------------
\30\ Id. at *11 (M.D.N.C. Oct. 3, 2017) (emphasis added). See also
U.S. v. DISH Network, 256 F. Supp. 3d 810 (C.D. Ill. 2017) (similar
case brought against Dish Network by the United States, as well as the
states of California, Illinois, North Carolina and Ohio; the court
ordered DISH to pay a civil penalty of $168,000,000 ``for Dish's
violation of the TSR done with knowledge or knowledge fairly implied,''
plus statutory damages of $84,000,000).
The court went on to treble the damages awarded by the jury, which
the court found appropriate here in light of the seller's ``sustained
and ingrained practice of violating the law,'' and the need for
deterrence.\31\
---------------------------------------------------------------------------
\31\ Krakauer v. DISH Network, L.L.C., 2017 WL 2242952, at *12-*13
(M.D.N.C. May 22, 2017).
---------------------------------------------------------------------------
Below are just a few examples of pending or resolved class action
lawsuits that used the TCPA to obtain redress for consumers for tens of
millions of illegal robocalls:
1. Ott v. Mortgage Investors Corp.\32\ In this case, which settled
in 2016, there were over 64 million illegal telemarketing calls
made to millions of veterans to convince them to refinance
their VA loans. The consumers reported receiving dozens of
unwanted calls from the defendant, who repeatedly failed to
remove their telephone numbers from its call list upon demand.
The defendant's telemarketing efforts were so aggressive that
thousands of consumers filed complaints with the FTC and other
agencies regarding the unwanted and harassing telemarketing
calls. The technology used was an autodialer with a human
agent.
---------------------------------------------------------------------------
\32\ Ott v. Mortg. Investors Corp. of Ohio, 65 F. Supp. 3d 1046 (D.
Or. 2014).
2. Strache v. SCI Direct, Inc.\33\ This class action involved over
four million calls made by a company selling cremation
services. One of the consumers kept receiving these calls, even
after sending e-mails, calling back and requesting that the
calls stop, and filing an FTC complaint.
---------------------------------------------------------------------------
\33\ Case No. 1:17-cv-04692 (N.D. Ill.); original case was Allard
v. SCI Direct, Inc., Case No. 3:16-cv-01033 (M.D. Tenn.).
3. Smith v. State Farm Mutual Ins. Co.\34\ This class action was
filed after a marketing company made 350 million phone calls to
consumers from a list of numbers it found in the White Pages.
During each call, a recording instructed recipients to ``press
1 now'' for a better deal on auto insurance. Recipients who
pressed 1 were transferred to a live ``screener,'' who asked
questions and then transferred the call to insurance agents,
including agents for State Farm Mutual Automobile Insurance
Company. The calls resulted in leads to State Farm agents for
at least 62,827 unique cell phone numbers. State Farm agents
continued to employ the marketers' services for over six months
after the lawsuit was brought.
---------------------------------------------------------------------------
\34\ Case No. 1:13-cv-02018 (N.D. Ill.)
---------------------------------------------------------------------------
4. Holtzman v. Turza.\35\ This case involved 8,430 junk faxes sent
by an attorney who was advertising his law practice to CPAs.
The defendant litigated the case for over ten years, until the
Seventh Circuit Court of Appeals put a stop to it.\36\
---------------------------------------------------------------------------
\35\ 728 F.3d 682 (7th Cir. 2013).
\36\ ABA Journal, 7th Circuit rejects another appeal by lawyer
ordered to pay up to $4.2M for sending junk faxes, Nov. 16, 2017,
available at http://www.abajournal.com/news/article/
7th_circuit_rejects_another_appeal_by_lawyer_ordered_to_pay_up_to_4.2m_f
or/.
---------------------------------------------------------------------------
II. Class Actions are Not the Problem
Robocallers like to point to the numbers of class actions as fodder
for their claim that TCPA rules are out of control. Class actions
regarding TCPA violations have increased over the past several years,
but they have not increased nearly as dramatically as the number of
robocalls has increased. The annual number of robocalls increased from
14 billion in 2015 to 30 billion in 2017, a 115 percent increase in
just three years--see Table 4. (And the steep climb in the number of
robocalls per month is even more alarming, as that number has increased
285 percent from September 2015 to March 2018. Even if the monthly rate
does not increase beyond March's total of 3.2 billion, we will see 38.4
billion robocalls this year).
The number of complaints to government agencies has also increased
dramatically--a 100 percent increase during the same three-year period,
from 3.5 million to 7.1 million.\37\ Yet the number of TCPA lawsuits of
all types--both class actions and individual actions--increased only 19
percent, from 3687 in 2015 to 4392 in 2017. The key point is that
robocalls are rapidly increasing, which is clearly upsetting the
Americans subjected to them.
---------------------------------------------------------------------------
\37\ Growth calculated through analysis of 2015 and 2017 figures.
Federal Trade Commission, National Do Not Call Registry Data Book FY
2017, at 6, (Dec. 2017), available at https://www.ftc.gov/sites/
default/files/filefield_paths/dnc_data_book_fy2017.pdf (last accessed
Apr. 14, 2018).
Table 4--Comparing Lawsuits to Complaints to Robocall Numbers
----------------------------------------------------------------------------------------------------------------
TCPA Lawsuits Complaints to FTC & FCC Total Number of
Filed \38\ \39\ Robocalls in U.S.\40\
----------------------------------------------------------------------------------------------------------------
2015 3687 3,578,710 14,214,000,000
2016 4860 5,340,234 29,300,000,000
2017 4392 7,157,370 30,500,000,000
----------------------------------------------------------------------------------------------------------------
Class actions serve a critical role in deterring robocallers from
violating the law as well as protecting consumers from TCPA violations.
Without class actions there would be little incentive for callers to
comply with the TCPA. As is evident from the comparison of the number
of complaints filed by consumers with the FTC and the FCC, and the
number of cases actually filed, only a tiny proportion of complaints
actually mature into real lawsuits. As there are no fee-shifting
provisions in the TCPA, the economics of bringing litigation under the
TCPA require that there be significant numbers of violations (multiples
of the $500 statutory damages) before litigation regarding even the
most blatant violations is feasible. These cases are time-consuming to
litigate and they require expensive expert witnesses to prove the
claims. The lawyers who bring these cases benefit from them--but only
if they successfully prove the elements of the claims under the TCPA.
That is why private enforcement is an effective mechanism of enforcing
a consumer protection statute.
---------------------------------------------------------------------------
\38\ WebRecon, Web Recon Stats for Dec 2017 & Year in Review,
available at https://webrecon.com/webrecon-stats-for-dec-2017-year-in-
review/ (last accessed Apr. 14, 2018).
\39\ See Federal Trade Commission, National Do Not Call Registry,
supra note 37.
\40\ 2016 and 2017 numbers derived from the sum of monthly totals.
YouMail Robocall Index, supra note 9. The 2015 number is derived from
the average number of calls in the six months for which totals are
provided. See id.
---------------------------------------------------------------------------
When cases settle, the unnamed class members typically receive a
portion of what they would have been entitled to had the case proceeded
to final judgment. That is why the cases settle--so that the defendants
do not have to pay as much as they might if the case was litigated
through to judgment. The compensation for the attorneys who handled the
case for the consumers must be approved by the court and depends on the
benefit they achieved for the consumers, so they have the incentive to
get the best settlement possible for the class.
Consumers who are not members of the class also benefit from class
actions, whether the actions are settled or resolved only after trial.
Class actions provide a much-needed deterrent effect against violating
the TCPA, which limits the number of unwanted calls and texts to cell
phones for the rest of us.
In dissenting from the FCC's 2015 Omnibus Order,\41\ Chairman (then
Commissioner) Pai and Commissioner O'Rielly cited several TCPA cases
that they felt were meritless. But this is not a reason to weaken the
TCPA. With the exception of just one case (the Rubio case, discussed
below), the courts dismissed those cases. In other words, our justice
system, while not perfect, does a reliable job of weeding out meritless
or abusive cases. For example:
---------------------------------------------------------------------------
\41\ 2015 TCPA Omnibus Order, supra note 17.
1. Emmanuel v. Los Angeles Lakers, Inc.,\42\ mentioned by
Commissioner Pai in his dissent.\43\ In this case, the
plaintiff attended a Lakers game during which attendees were
invited to send a text message to a specified telephone number
for the opportunity to have the message appear on the
scoreboard. After the plaintiff sent the Lakers a text message,
he received a confirmatory text back. He then sued, alleging
that this confirmatory text violated the TCPA's prohibition
against sending a consumer a text message without the
consumer's prior consent.
---------------------------------------------------------------------------
\42\ Case no. 2:12-cv-09936-GW-SH (C.D. Cal. Apr. 18, 2013).
\43\ 2015 TCPA Omnibus Order, supra note 17, at 8072 (Pai, Comm'r,
dissenting).
The District Court granted the Lakers' motion to dismiss with
prejudice. Taking a ``common sense'' approach, the court held
that the challenged text message was not actionable under the
TCPA. By sending his original message, the plaintiff expressly
agreed to receive a return confirmatory text. This confirmatory
text was not the type of intrusive communication prohibited by
the TCPA because it responded directly to the plaintiff's
---------------------------------------------------------------------------
original text.
2. Gragg v. Orange Cab Co., Inc.,\44\ mentioned by Commissioner Pai
in his dissent.\45\ After the plaintiff requested a taxi, the
dispatcher manually inputted pertinent information, and pressed
``enter'' to transmit the data to TaxiMagic to reach the
nearest available driver. A driver transmitted his acceptance
of the request by pressing ``accept'' on his Mobile Data
Terminal and then sent the plaintiff a message that read ``Taxi
# 850 dispatched @ 05:20.'' The plaintiff brought a class
action suit alleging that the text message violated the TCPA as
it was made with an autodialer without prior express consent.
---------------------------------------------------------------------------
\44\ 995 F. Supp. 2d 1189 (W.D. Wash. 2014)
\45\ 2015 TCPA Omnibus Order, supra note 17, at 8072 (Pai, Comm'r,
dissenting).
The court rejected the plaintiff's argument that the modem
utilized by defendants to operate the TaxiMagic program was a
``system'' as envisioned by TCPA precedent: ``The Court
declines to adopt an interpretation of `system' that would lead
to an absurd result.''\46\ The court entered summary judgment
against the consumer on the TCPA claim.
---------------------------------------------------------------------------
\46\ 995 F. Supp. 2d 1189, 1192 (W.D. Wash. 2014) (emphasis added).
3. Kinder v. Allied Interstate, Inc.,\47\ mentioned by Commissioner
Pai in his dissent.\48\ Soon after acquiring a pager number
(619-999-9999), the plaintiff realized that it was receiving
thousands of unwanted pages that were not meant for him. He
then disconnected the pager, but recorded all the calls made to
it and filed many suits regarding them. The appellate court
affirmed the trial court's finding that the plaintiff
intentionally subjected himself to unwanted calls and that, as
a matter of policy, this conduct precluded any recovery under
the TCPA.\49\
---------------------------------------------------------------------------
\47\ 2010 WL 2993958 (Cal. Ct. App. Aug. 2, 2010).
\48\ 2015 TCPA Omnibus Order, supra note 17, at 8072 (Pai, Comm'r,
dissenting).
\49\ 2010 WL 2993958, at *8 (Cal. Ct. App. 2010). See also Epps v.
Earth Fare, Inc., 2017 WL 1424637 (C.D. Cal. Feb. 27, 2017) (dismissing
case as ``manufactured'' lawsuit where plaintiff purported to revoke
consent to receive commercial text messages by responding with long
sentences rather than simply responding with the STOP command, as
instructed in each message).
Both Commissioners Pai and O'Rielly also cited the case of Rubio's
Restaurant, which was sued for repeatedly calling a reassigned number,
relying on the called party's statements that it had blocked the
calls.\50\ Rubio's then filed a petition with the FCC requesting that a
bad faith defense be allowed for TCPA claims. The FCC denied the
request in the 2015 Omnibus Order, pointing out that once the caller
affirmatively knew that the number was no longer assigned to the person
from whom it had consent, it was incumbent on the caller to stop the
calls.\51\
---------------------------------------------------------------------------
\50\ Rubio's Restaurant, Inc., Petition for Expedited Declaratory
Ruling, CG Docket No. 02-278 (filed Aug. 15, 2014), available at http:/
/apps.fcc.gov/ecfs/document/view?id=7521768526.
\51\ 2015 TCPA Omnibus Order, supra note 17, at 8012.
---------------------------------------------------------------------------
Indeed, without ensuring that callers have the obligation to update
records regarding reassigned numbers, there would be no meaningful
enforcement of the TCPA's proscription against robodialing numbers
without consent. Hopefully, the FCC's pending proposal to establish a
reassigned number database \52\ will resolve most, if not all, of the
challenges relating to reassigned numbers.
---------------------------------------------------------------------------
\52\ In re Advanced Methods to Target and Eliminate Unlawful
Robocalls, CG Docket No. 17-59, Second Further Notice of Proposed
Rulemaking, 37 FCC Rcd. 56 (F.C.C. Mar. 2018), available at https://
transition.fcc.gov/Daily_Releases/Daily_Business/2018/db0323/FCC-18-
31A1.pdf.
---------------------------------------------------------------------------
The potential of class action lawsuits benefits not only consumers,
but also businesses that want to comply with the law. Without the
threat of class action lawsuits, their competitors would violate the
law with little fear of consequences, putting the law-abiding business
at a competitive disadvantage. The deterrent effect of class actions
protects millions of consumers from receiving unwanted--and unconsented
to--calls and texts to their cell phones on a daily basis. Courts are
quite capable of ferreting out meritless TCPA lawsuits.
III. The Impact of the D.C. Circuit Court's Decision in ACA
International v. FCC \53\
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\53\ NCLC has produced a comprehensive analysis of the decision in
a memorandum entitled The Effect of ACA International: What Does it
Vacate, What Does it Undermine, What Rules Remain? (Apr. 2, 2018),
available at www.nclc.org.
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On March 16, 2018, the D.C. Circuit issued its long-awaited
decision in ACA International v. FCC,\54\ an appeal filed by debt
collectors and a number of other industry players from the 2015 Omnibus
Order issued by the FCC.\55\ ACA International addresses three major
issues:
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\54\ 885 F.3d 687 (D.C. Cir. 2018).
\55\ 2015 TCPA Omnibus Order, supra note 17.
The definition of ``automatic telephone dialing system''
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(ATDS);
Caller liability for calls to reassigned numbers; and
The right of consumers to revoke consent to receive
robocalls.
The TCPA prohibits the use of an autodialer (the statute uses the
term ``automated telephone dialing system'' or ATDS) to call a cell
phone without the called party's consent.\56\ This prohibition is
critically important to consumers, as it is the primary bulwark against
the tsunami of unwanted calls that would otherwise flood their phones.
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\56\ 47 U.S.C. Sec. 227(b)(1)(A)(iii).
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The TCPA defines autodialer as equipment that has the capacity to
store or produce telephone numbers to be called, using a random or
sequential number generator, and to dial such numbers.\57\ The FCC has
interpreted this definition on several occasions.
---------------------------------------------------------------------------
\57\ 47 U.S.C. Sec. 227(a)(1). See also 47 C.F.R.
Sec. 64.1200(f)(2) (similar definition).
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In 2003, the FCC held that a device cannot be excluded from the
definition because it dials from a given set of numbers rather than
from randomly or sequentially generated numbers.\58\ That ruling also
holds that a predictive dialer is an autodialer, reasoning that, like
earlier autodialers, the basic function of a predictive dialer is the
capacity to dial numbers without human intervention. In 2008, the FCC
issued another declaratory ruling reiterating that a predictive dialer
is an autodialer.\59\ Many decisions have held that these rulings are
binding on courts.\60\
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\58\ In re Rules and Regulations Implementing the Telephone
Consumer Protection Act of 1991, CG Docket No. 02-278, Report and
Order, 18 FCC Rcd. 14,014 (F.C.C. July 2003).
\59\ In re Rules and Regulations Implementing the Telephone
Consumer Protection Act of 1991, CG Docket No. 02-278, Declaratory
Ruling, 23 FCC Rcd. 559 (F.C.C. Jan. 2008).
\60\ Zeidel v. A&M (2015) L.L.C., 2017 WL 1178150 (N.D. Ill. Mar.
30, 2017) (relying on FCC's 2003 order to hold that device that sends
text messages en masse is ATDS regardless of whether it has capacity to
generate numbers sequentially or randomly; device is ATDS if it stores
pre-programmed numbers or receives numbers from a computer database,
can dial those numbers at random in sequential order or from a database
of numbers, and its basic function is the capacity to dial numbers
without human intervention); Espejo v. Santander Consumer USA, Inc.,
2016 WL 6037625 (N.D. Ill. Oct. 14, 2016) (relying on 2003 order to
hold that predictive dialer is an ATDS); Brown v. Credit Mgmt., L.P.,
131 F. Supp. 3d 1332 (N.D. Ga. 2015) (relying on 2003 and 2008 orders
to hold predictive dialer an ATDS); Swaney v. Regions Bank, 2015 WL
12751706 (N.D. Ala. July 13, 2015) (text message sending system is ATDS
because it has ability to dial numbers without human intervention);
Brown v. Account Control Tech., Inc., 2015 WL 11181947 (S.D. Fla. Jan.
16, 2015) (relying on 2003 and 2008 orders to hold that a predictive
dialer is an ATDS; dismissing defendant's argument that predictive
dialer is ATDS only if it has capacity to use random or sequential
number generation); Morse v. Allied Interstate, L.L.C., 65 F. Supp. 3d
407 (M.D. Pa. 2014) (2003 and 2008 orders are binding; predictive
dialer that calls numbers without human intervention is ATDS); Moore v.
DISH Network L.L.C., 57 F. Supp. 3d 639 (N.D. W. Va. 2014) (predictive
dialer is ATDS even if it lacks capacity to generate random or
sequential phone numbers and even though humans create the lists of
numbers to be called); Sterk v. Path, Inc., 46 F. Supp. 3d 813 (N.D.
Ill. 2014) (relying on 2003 and 2008 orders; a predictive dialer is an
ATDS; here, device that sends text messages to call list is ATDS even
if it lacks capacity to generate numbers randomly or sequentially);
Davis v. Diversified Consultants, Inc., 36 F. Supp. 3d 217 (D. Mass.
2014) (relying on 2003 and 2008 orders to hold that predictive dialer
is ATDS even if it does not have capacity for random or sequential
number generation); Lardner v. Diversified Consultants, Inc., 17 F.
Supp. 3d 1215 (S.D. Fla. 2014) (relying on 2003 order and finding it
reasonable; device is ATDS if it automatically dials numbers from a
preprogrammed list); Cabrera v. Gov't Employees Ins. Co., 2014 WL
11881002 (S.D. Fla. Nov. 26, 2014) (relying on 2003 and 2008 orders to
hold that any device that is able to dial numbers without human
intervention, for example by calling numbers stored in a database, is
an ATDS; LiveVox system is ATDS).
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Robocallers have not been happy with these rulings. They have
sought to create equipment that automatically calls millions of numbers
a day but that does not quite meet the statutory definition, and they
have also repeatedly petitioned the FCC to issue a narrow definition of
``autodialer.'' In 2015, in response to the latest batch of petitions,
the FCC issued another declaratory order that reiterated the
conclusions of the 2003 and 2008 orders and added further
interpretations.\61\ The 2015 order held that, whether or not a
particular call was placed through random or sequential generation of
telephone numbers, a system is an autodialer if it has the present or
potential capacity to generate numbers in this way.\62\ The order also
made it clear that ``the TCPA's use of `capacity' does not exempt
equipment that lacks the `present ability' to dial randomly or
sequentially.'' \63\ Thus hardware that can store or produce telephone
numbers to be called using a random or sequential number generator is
an autodialer even if software necessary to accomplish that
functionality has not yet been installed.\64\
---------------------------------------------------------------------------
\61\ In re Rules and Regulations Implementing the Telephone
Consumer Protection Act of 1991, CG Docket No. 02-278, Report and
Order, 30 FCC Rcd. 7961 10, 23, 24 (F.C.C. July 10, 2015), appeal
resolved, ACA International v. FCC, 885 F.3d 687 (D.C. Cir. 2018)
(setting aside portions of FCC's 2015 order dealing with ATDS
definition and treatment of reassigned cell phone numbers).
\62\ Id. at 15.
\63\ Id.
\64\ Id. at 16, 18-20.
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The industry appealed the 2015 order,\65\ and in 2018, in ACA
International v. Federal Communications Commission,\66\ the D.C.
Circuit set aside the portions of the 2015 order that dealt with the
definition of autodialer. The court's main concern was that the FCC's
broad interpretation of the term ``capacity'' in the autodialer
definition could sweep in smartphones that consumers were using for
ordinary purposes. It sent this part of the order back to the FCC to
redo.
---------------------------------------------------------------------------
\65\ See National Consumer Law Center, Federal Deception Law
Sec. 6.2.4.3A (3d ed. 2017), updated at www.nclc.org/library.
\66\ 885 F.3d 687 (D.C. Cir. 2018).
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While ACA International sets aside the portions of the FCC's 2015
order that dealt with the definition of ATDS, it leaves in place the
FCC's 2003 and 2008 orders, which remain binding on the courts.\67\ The
D.C. Circuit's decision thus rolls the clock back to 2014, before the
FCC had issued the portions of its 2015 order that relate to the
definition of an ATDS. Accordingly, the role of courts after ACA
International should be to interpret the statute in light of the 2003
and 2008 FCC orders, the decisions of the Court of Appeals for their
Circuit, and any decisions of other courts that have persuasive value,
but without the benefit of the 2015 order on this point. In our view,
discussed in length in our published analysis of the effect of ACA
International,\68\ most dialers used by robocallers still fall within
the definition of autodialer.
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\67\ The D.C. Circuit's brief references to the 2003 and 2008 FCC
orders in ACA International do nothing to undermine the conclusion that
the opinion decides only the validity of the 2015 order. Except for a
brief mention of the 2003 order in an introductory section describing
the FCC's history of rulemaking and declaratory rulings, ACA
International mentions the FCC's 2003 and 2008 orders only in section
II(A)(2). 885 F.3d at 701. That section first addresses the question
whether the existence of the 2003 and 2008 orders deprives the D.C.
Circuit of jurisdiction to entertain the challenge to the 2015 order.
This was a necessary prerequisite for the court to address the 2015
order. For more discussion of this point, see NCLC's memorandum on the
impact of the decision, supra note 54, at Sec. I.A.3.
\68\ See NCLC's memorandum on the impact of the decision, supra
note 54, at Sec. I.A.3.
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In ACA International, the D.C. Circuit also addressed the question
of reassigned cell phone numbers. Often callers have claimed that a
barrage of calls is legal because the called party's cell phone number
was previously assigned to a consumer who had consented to the calls.
Consumers have found these calls extremely difficult to stop. The FCC's
2015 order made it clear that a caller has to have the consent of the
person it actually calls, and that, when a telephone number is
reassigned from one consumer to another, the caller must have the new
consumer's consent. In addition, however, the FCC created a safe harbor
for the first call to a reassigned number while imposing liability for
calls after that first call. The D.C. Circuit held that, while the
rationale for requiring the caller to have the consent of the person it
actually called was ``persuasive,'' the FCC had not articulated a good
enough rationale for the one-call safe harbor, so it set aside the
entire portion of the order dealing with liability for calls to
reassigned numbers and sent it back to the FCC to redo.
The D.C. Circuit rejected the other challenges to the FCC's 2015
order. It agreed that the FCC's ruling that consumers have the right to
revoke consent by any reasonable means was reasonable, and it rejected
a pharmacy chain's argument that a narrow, carefully crafted exception
from the consent requirement for time-sensitive health care messages
should have been broader. It left all the other portions of the 2015
order undisturbed.
IV. A Plan for Dealing with Robocalls
American consumers want robocalls to stop. Callers want to continue
calling, and they do not want to be sued. But most responsible callers
agree that consumers should have some control over the calls they
receive. The way to thread our way through this conundrum is for the
FCC to develop clear rules to guide callers, to cover all truly
automated calls (otherwise consumers will have no control), to ensure
that consumers can clearly and easily revoke consent, and to give
consumers the means to block calls they do not want.
The FCC, under Chairman Pai, has already launched some important
initiatives to deal with unwanted robocalls. These include permitting
phone companies to allow call blocking,\69\ consideration of a
comprehensive reassigned number database that will enable callers to
check that they have consent from the current subscriber of the phone
before calling,\70\ encouraging phone companies to develop technologies
that allow for reliable call authentication,\71\ and beginning the
process of tightening regulations around caller ID spoofing.\72\
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\69\ In re Advanced Methods to Target and Eliminate Unlawful
Robocalls, CG Docket No. 17-59, Report and Order and Further Notice of
Proposed Rulemaking, FCC 17-51 (F.C.C. Nov. 2017).
\70\ In re Advanced Methods to Target and Eliminate Unlawful
Robocalls, CG Docket No. 17-59, Second Further Notice of Proposed
Rulemaking, supra note 53.
\71\ In re Call Authentication Trust Anchor, CG Docket No. 17-97,
Notice of Inquiry, 32 FCC Rcd. 5988 (F.C.C. July 2017).
\72\ See Press Release, Federal Communications Commission, FCC
Proposes $82 Million Fine for Spoofed Robocalls (Aug. 3, 2017); Press
Release, Federal Communications Commission, Robocall Scammer Faces $120
Million Proposed Fine for Massive Caller ID Spoofing Operation (June
22, 2017).
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But the first step must be to make sure that all of the invasive
and unwanted calls are covered by the TCPA's consumer protections. This
step involves ensuring that the TCPA's definition of an ATDS covers the
automated calls being made. As explained in the previous section, we
believe that if the FCC does nothing to change the existing law on the
definition, then there is ample room for the courts to find that most
autodialers currently being used are covered. But doing nothing to
resolve the outstanding issues does not provide the clarity craved by
responsible callers. And it would invite callers to continue trying to
design equipment that barrages consumers with unwanted calls yet does
not quite meet the definition of autodialer.
The TCPA requires consent for calls to cell phones that include
either a prerecorded or artificial voice, or that are made with an
autodialer (whether or not a human operator speaks to the consumer once
the call is answered). As described in previous sections of this
testimony, many of the worst calls about which consumers are now
complaining are made with human operators and autodialers. Consumers
would be substantially harmed if the FCC moved forward with a
constricted definition of autodialer that excluded these calls. The
definition of autodialer is central to coverage of the calls under the
TCPA, not only for private enforcement, but for FCC enforcement as
well.
Consider, for example, what happened in the case of Dominguez v.
Yahoo, Inc.\73\ In this case, Yahoo sent 27,809 wrong number text
messages to Mr. Dominguez over 17 months. It refused to stop even after
the consumer's many pleas, and even after he called a representative
from the FCC, who then participated in a call (with Mr. Dominguez on
the line) to Yahoo's customer service. Yahoo told Mr. Dominguez that
the company could not stop the messages and that, as far as Yahoo was
concerned, the number would always belong to the previous owner. Yahoo
defended--and is still defending \74\--its actions by saying that that
the equipment sending the messages did not fit the statutory definition
for an ATDS. Without a broad definition of autodialer, companies will
be able to continue to thumb their noses like this at both consumers
and the FCC.
---------------------------------------------------------------------------
\73\ 629 Fed. Appx. 369 (3d Cir. 2015).
\74\ Dominguez v. Yahoo!, Inc., 2017 WL 390267 (E.D. Pa. Jan. 27,
2017) (appeal filed 3d Cir. Feb. 2, 2017).
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If the FCC were to adopt a limited definition, the following calls,
even if made by automated equipment from a call center, would be
outside the scope of the TCPA's protections for cell phones, and
neither the U.S. Government nor consumers would have control over these
calls.
All texts to cell phones, since these do not use artificial
voices. Consumers could try to put their cell phones on the
FCC's Do Not Call list, but it applies only to residential
phones, and only to telemarketing calls. The FCC has created
something of a presumption that a cell phone is a residential
phone, but this is not a universal rule.
Telemarketing calls that avoid artificial or prerecorded
voices, including scam telemarketing calls that use humans,
such as the IRS scam calls (``Your computer has a virus,''
etc.). Consumers could register their cell phones on the FCC's
Do Not Call list, but, as noted in the preceding bullet, all
cell phones may not be protected by the Do Not Call list.
Debt collection calls, as long as they avoid prerecorded or
artificial voices.
Unwanted autodialed calls to emergency rooms, hospitals,
etc., if they do not use prerecorded or artificial voices.
Below is our proposal for the next steps that we believe the FCC
should take to deal with illegal and invasive robocalls.
1) Cover all the calls to cell phones that are made with automated
equipment.
This ensures that the FCC has authority over all
problem calls;
Clarity of coverage will assist the calling industry;
and
The statutory definition of ATDS provides ample room
to do so (using either the language ``store'' numbers and
``dial those numbers'' or a broad definition of
``capacity'').
2) To prevent application of a broad definition to ordinary personal
use of a smart phone, use the FCC's general authority to adopt
rules implementing the TCPA to exclude equipment that does not
routinely make en masse calls, possibly by:
More closely defining the call abandonment rate; and
Excluding equipment that does not have more than X
abandoned calls.
3) Provide a safe harbor for one or more methods for consumers to
revoke their consent to receive calls and text messages. This
would:
Encourage uniform methods of stopping calls;
Mimic methods used by the text trade association
(including in every call a simple way to stop future
messages);
Provide clarity for callers, which would reduce
litigation; and
Ensure protection for consumers who want to stop
calls.
4) Require phone companies to implement call authentication, in
which the caller is determined to be the person whose name
appears on the caller ID, as soon as possible.
This will drastically reduce scams;
It will empower consumers to use personal blocking
tools;
It will make caller ID much more reliable, thereby
empowering consumer choice of which calls to accept; and
It will enable anti-spoofing rules to be more
meaningful.
5) Promulgate more rigorous regulation of spoofing in order to:
Prohibit all spoofing of numbers that callers do not
have a right to use; and
Allow caller IDs to be legitimately altered by
callers, but only for legitimate purposes (i.e., caller
from call center in Iowa calling on behalf of Bank in
Delaware can use Bank's Delaware caller ID, but not a fake
number, etc.).
6) Institute the proposed reassigned number database that features:
A centralized system which is reliable, easy and
inexpensive for callers to use; and
A safe harbor only for calls made as the result of
database mistakes, and for which callers otherwise complied
with the TCPA.
7) Require telecommunication providers to make a free robust call
blocking system available to consumers. This would:
Provide consumers with control over their incoming
calls; and
Create a centralized appeals/whitelist system to
address caller needs, yet always permit consumers to block
specific numbers.
8) Implement congressionally-required rules limiting calls made to
collect debt owed to the Federal government by limiting the
number of calls that can be made.
Thank you for the opportunity to bring our concerns and ideas to
your attention. I would be happy to answer any questions.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Ms. Saunders. Let me just direct
this, if I can, principally at least to the FTC and the FCC.
But consumer complaints about illegal robocalls seem to be on
the rise despite the efforts that you've all noted. The FTC,
FCC, and the industry have tried to prevent them. What do you
think accounts for this?
Ms. Harold. This is a difficult and complex problem, as
everyone understands, and there is no silver bullet. A big part
of the problem obviously is that technology has made it easy
and relatively cheap to engage in this kind of behavior. No
single entity has 100 percent of the answers, so we'll have to
work together. The kind of activities that we're undertaking,
targeted enforcement against some of the biggest robocallers to
get attention and send a message to others, is part of it, of
course. Technological developments to put into consumer hands
so that they can block calls they don't want is a big part of
that as well, as is consumer education, and continued
cooperation among law enforcement authorities, both between the
FTC and us, but also between State and Federal law enforcement
authorities. I'm happy to say that that kind of exchange
happens regularly.
The Chairman. Yes, that's good.
Ms. Greisman. Chairman? Chairman? Complaints are on the
rise. We've seen that steadily over the years. On average now,
we're receiving some 475,000 complaints each month. And we know
they're the tip of the iceberg because we know from our law
enforcement cases, we have sued individuals and companies that
have placed billions of calls. So complaints are the tip of the
iceberg.
This may sound odd, but complaints are actually very
helpful. They're very useful for us. We mine them. We use them
to identify law enforcement targets. And as I mentioned
earlier, each day we're putting some 22,000 numbers that
consumers complained about, we're putting them out into the
public where they can be used by others engaged in call-
blocking technologies.
So complaints will continue to rise.
The Chairman. Do you all think you have the authorities
that you need to meet the challenge, the legal authorities you
need?
Ms. Harold. With respect to the FCC's enforcement actions,
what we're concentrating now are on major robocallers. And
fortunately, we have two good grounds to do that. Almost all
such robocallers use prerecorded messages, which is part of the
TCPA and was not affected by the recent court decision. They
also spoof, and that's a completely different statute. Should
Congress decide to give us additional authority, of course, we
will pay close attention to that.
Ms. Greisman. Mr. Chairman, the Commission has been on
record for well over a decade now calling for the repeal of the
Common Carrier Exemption. It is a real impediment to our
ability to provide robust law enforcement in this space. In
fact, Mr. Abramovich, I believe what he was commenting on are
certain carriers whose primary, if not significant, business
that generates significant revenues is precisely to carry
robocalls. Currently, under the law, we do not have
jurisdiction over those entities to the extent they are
actually engaged in the business of common carriage.
Ms. Harold. I would like to add one thing, Mr. Chairman. If
Congress would like to enact legislation, there are two
procedural things that would help us at the FCC. One would be
to eliminate the citation requirement that applies to actions
taken under the Consumer--the TCPA. That does not apply to the
anti-spoofing law, but it does apply to the robocall law
essentially. We have to give somebody a citation, which is
basically a warning, that gives them maybe a free ``Get Out of
Jail'' card free because they get a warning before we can take
any serious action against them. They can change the way they
do business, and we have to go hunting them down again. If we
could get rid of the citation requirement for the TCPA, that
would be very helpful.
The other thing that would be helpful would be to harmonize
the statute of limitations for both statutes. Right now, under
the anti-robocalling law, we have 2 years to get to the point
where we charge someone. Under the TCPA, we only have one. It
makes it a little difficult back in the office when we're
actually working on the investigations to figure out which
deadline applies to which part of an investigation that often
covers both types of problems.
The Chairman. We're coming up on the 15th anniversary of
the creation of the National Do Not Call Registry. And so I
want to ask you a yes-or-no question, and then if anyone wants
to elaborate on it, you can. But is the Do Not Call list
broken?
Ms. Greisman. No. Do Not Call set out to prevent live calls
from legitimate telemarketers. That's what the system was
designed to do. It was not designed to prevent or halt
fraudulent calls. The bad guys never were going to subscribe to
the list and abide by the law. So the goal of and the purpose
of the Do Not Call Registry was to prevent legitimate live
calls, and I do believe it has been and remains successful in
that regard.
The Chairman. All right. Yes? No?
Ms. Harold. I agree with what Ms. Greisman said. For the
limited purpose it was designed to serve, it seems to be
serving that purpose, but the bad guys don't pay attention to
it.
The Chairman. Right.
Mr. Rupy. Mr. Chairman, I would agree with both Ms. Harold
and Ms. Greisman on that point.
The Chairman. OK.
Mr. Delacourt. I agree as well. The Do Not Call list is
well understood by consumers who have subscribed in large
numbers. It's oriented to people who are going to comply with
the law, companies that are going to comply with the law. It's
not going to address those scofflaws who aren't going to comply
regardless of what the law requires.
Ms. Saunders. I agree.
The Chairman. OK. Senator Blumenthal.
Senator Blumenthal. Thanks, Mr. Chairman.
Let me ask the same question, but in a different way. If
the Do Not Call Registry is working, why do I receive hundreds,
maybe thousands of calls, from my constituents saying, ``I'm on
the Do Not Call list, but I'm continuing to receive calls''?
And when I ask them, it's not fraudulent calls, it's not calls
from charitable organizations or politicians who are perhaps
within an exemption, they are regular calls that should be
covered by the Do Not Call list. Is it that the law is working,
but the companies are ignoring it?
Ms. Greisman. It's a little bit of both. We distinguish
between abusive calls and fraudulent calls. To focus on abusive
calls, yes, there are companies that--one was named, one
recognized, Dish, for example, that, as challenged in the
lawsuit and as reflected in a $280 million judgment, civil
penalty judgment, violated Do Not Call provisions of the
Telemarketing Sales Rule and the TCPA. So there are entities
out there that take a view that the way their product is
marketed by others, it does not result in liability for them.
Senator Blumenthal. Let me ask every one of the members of
the panel, would you all agree that consumers need and deserve
more effective means to block robocalls, better tools?
Ms. Harold. Yes. And I think that technology is probably
the leading pipeline for us to be able to help people. The FCC
certainly will encourage that and has been working with
industry to develop things like Call Authentication, a system
that will allow for a technological block, and educating
consumers about the availability of these tools is an important
part of the picture.
Ms. Greisman. Absolutely. That's why back in 2012 in the
first robocall contest, the FTC put forth a stimulation to the
public, to industry, to develop call-blocking tools.
Mr. Rupy. Senator, I would agree with Ms. Greisman's point
in her testimony, and I think it is certainly crucial that we
deploy and get tools into the hands of consumers. And think,
you know, one of the points that was raised, it was raised in
my testimony, you are seeing more and more tools that are out
there today----
Senator Blumenthal. I take it the three of you would
support the ROBOCOP bill that I've introduced that would
require phone companies to provide more effective tools.
Mr. Rupy. Senator, I think a couple things on that and on
the tool issue. Number one, I think when you look at just the
last couple years alone, the marketplace is responding in
terms----
Senator Blumenthal. Well, why would you not support the
ROBOCOP?
Mr. Rupy. Because I think a couple things, Senator. First,
the marketplace is deploying tools. In smartphone apps alone--
--
Senator Blumenthal. They're not moving fast enough.
Mr. Rupy. There are a growing number of tools in terms of
the apps. And you're also seeing voice providers partnering
with a lot of these services.
The other--the other issue that I would state on that,
Senator, is that it's important that we take a holistic
approach to this. When you look at blocking in and of itself,
AT&T has blocked 3.3 billion calls. And my sense is that we are
not going to block our way out of this problem. I think we need
to take a very holistic approach in terms of getting tools out
there, which is happening, educating consumers, and civil and
criminal enforcement.
Senator Blumenthal. Mr. Delacourt?
Mr. Delacourt. Yes. I agree that technology is going to be
a big part of the solution for robocalls, particularly with
respect to scofflaws and people who won't be bound by law.
Senator Blumenthal. But would you support the ROBOCOP bill?
Mr. Delacourt. I'm not familiar with the particular ins and
outs of that piece of----
Senator Blumenthal. We'll get you a copy of it.
Mr. Delacourt. I appreciate that. And I'll review it.
Senator Blumenthal. I'm pressed for time, so I'm
interrupting you. I apologize.
But let me ask Ms. Saunders.
Ms. Saunders. Senator, I worked with your staff on your
good bill, and I certainly--we certainly support it.
Senator Blumenthal. I'm not going to ask the FCC and the
FTC representatives because I know you will have to go back to
your agencies and go through the, for lack of a better term,
bureaucratic process, but I hope that you will review it
carefully and support it. Thank you.
Thanks, Mr. Chairman.
The Chairman. Thank you, Senator Blumenthal.
Senator Tester.
Senator Tester. Thank you, Mr. Chairman.
I just want you to know, Senator Blumenthal, they were both
nodding their heads. I don't know if that's in support of the
bill or not, but, you know.
[Laughter.]
Senator Blumenthal. Thank you, Senator Tester.
Senator Tester. That's good.
So, Mr. Delacourt, you talked about business, and I think
it is affecting business. And I think many parts of the country
get work done by e-mails or texts or video chat. In Montana, I
speak for myself, but also for my neighbors, we pick up the
phone, and so the phone is really critical for jobs and for
health care and many of the essential services we have. If I
want to buy something, as I pointed out to the previous guy, I
pick up the phone and call, I don't expect them to call me.
But nonetheless, when I start getting a bunch of robocalls,
I start losing faith. And I'll just be honest with you, because
of robocalls, if I don't recognize the number, even if it's in
my area code, even if it's in my three digit, I don't pick up
the phone because I don't want to waste my time. And so from
that standpoint, it's bad for business, wouldn't you say?
Mr. Delacourt. Oh, yes.
Senator Tester. Yes.
Mr. Delacourt. In the sense that businesses want to
lawfully communicate with their customers, they want to be
credible, they want consumers to have the faith to answer the
phone. Absolutely.
Senator Tester. Yes. So it's cutting those folks out of the
business because I screen my calls now, and I never used to do
it. I think it's an important priority. And I don't want to put
you on the spot in this question, it isn't meant to put you on
the spot, but has the Chamber thought about ways we could solve
this problem? Because it truly is a problem and it's a problem
for business.
Mr. Delacourt. Sure. The Chamber has thought about it, and
our thinking is that the approach, not unlike what others have
said here today, is to really focus on two things, law
enforcement and technology. I would distinguish between and I
think this hearing today has drawn a useful distinction between
abusive robocalls, sort of what was discussed on the first
panel, and legitimate businesses.
Senator Tester. Right.
Mr. Delacourt. The first--the activity of the first panel
is not something that could really be addressed through law, it
has to be addressed through--through changes in the law,
requiring regulation. It can be addressed through law
enforcement and it can be addressed through technology.
Senator Tester. Yes. So let me move over on that question
to either the FTC or the FCC, whichever is most appropriate to
answer this question. As far as the Do Not Call list goes, are
there any penalties if people don't follow the rules?
Ms. Greisman. Absolutely. Civil penalties are upwards of I
think it said $44,000.
Senator Tester. Upwards of $4,000?
Ms. Greisman. $44,000 per violation.
Senator Tester. 44,000? Does the person who receives the
calls have any recourse within the courts?
Ms. Greisman. Under the Telemarketing Sales Rule, there is
a private cause of action, but it is more--far more
circumscribed than that which exists under the TCPA.
Senator Tester. OK. And so do you think that would be
helpful? I mean, I've got to tell you, when I do happen to pick
up the phone because I don't have my glasses on, and I think
it's somebody that it isn't, you know, I always tell them,
``I'm going to go get recourse in the courts, and when I get
done, you're not going to be able to breathe.'' I don't know
that I can do that. But you think I can.
Ms. Greisman. Under the TCPA, as we've heard on this panel,
there is quite robust and extensive litigation, plaintiffs
exercising the private cause of right that exists under it.
Senator Tester. OK, good. When was the last time the Do Not
Call rule was updated? Do you know? Or has it been in the last
15----
Ms. Greisman. The amendments in the Commission, approved
amendments in 2008, which became effective in 2009. Those are
the robocall prohibitions.
Senator Tester. OK. Ms. Harold, I understand that a lot of
the bad actors are from other countries. Does the FCC have an
idea who these countries are?
Ms. Harold. Senator, we have some notion that a good number
of the calls come from the west--west of our western border or
south of our southern border, but beyond being able--I can't
pinpoint for you a particular country----
Senator Tester. For specific countries, you don't know.
Ms. Harold. I don't have that information at the tip of my
fingers, but if you would like me to get it for you, I'll
deliver it to you after the hearing.
Senator Tester. But you have it. You have it.
Ms. Harold. We have some information.
Senator Tester. OK. So are you able to talk to your
counterparts in those countries to hold those folks----
Ms. Harold. We do. And I think that the----
Senator Tester. And how successful has that been?
Ms. Harold. I think that the omnibus legislation that
Congress just enacted that gives us clear authority to go after
callers in other countries will be a helpful starting point.
Senator Tester. Yes. OK. Good enough.
Just one other question, and I know I'm past time, but it's
really quick. You guys talked about technology that's out
there, blocking tools that are available. Are they available to
me? And are they expensive? And do they work?
Mr. Rupy. So there are a variety of tools that are out
there, Senator. Many of these tools are free. Some of these may
have a charge. There are native apps that are out there, so
these are independent----
Senator Tester. I would love to have it work like my spam
box does.
Mr. Rupy. Absolutely, Senator.
Senator Tester. If I get a robocall, I just hit the spam
button and it just goes to a different file.
Mr. Rupy. And that's something that you're seeing in the
marketplace.
Senator Tester. OK.
Thank you, Mr. Chairman. I appreciate the flexibility.
The Chairman. Thank you, Senator Tester.
Senator Cortez Masto.
STATEMENT OF HON. CATHERINE CORTEZ MASTO,
U.S. SENATOR FROM NEVADA
Senator Cortez Masto. Thank you, Mr. Chair.
So this is for the panel. Let me just start with maybe Ms.
Harold, Ms. Greisman, and Mr. Rupy.
So there was an article in the Washington Post in January
about an FTC action against a robocaller from California who
had made billions of illegal robocalls, and he was living in a
wealthy neighborhood, paying $25,000 a month for his house, had
a personal chef, and drove two Mercedes. The FTC brought him in
for questioning and he basically admitted he did it without
remorse, and he was fined $2.7 million and banned from
telemarketing.
Now, while it's clear that in the digital age your agencies
need more resources to police this behavior, and we've talked a
little bit about the technology, but it's also evident from the
article that even when cases are brought, there is this thought
that robocallers believe they have clearly concluded that the
financial benefits outweigh any cost of their behavior, it's a
cost of doing business. Any fine that is assessed against them
is a cost of doing business, and so they'll continue and engage
in that.
For this reason, I'm looking at--excuse me--to introduce
legislation to include criminal penalties or criminal
enforcement.
And so, Mr. Rupy, you've talked about this, the need for
criminal enforcement.
I also noted, both Ms. Greisman and Ms. Harold, certain
things. One of them was the elimination of citations laws for
the TCPA and to harmonize the statute of limitations. But if
we're looking at enforcement and new criminal enforcement
tools, do you have an idea what that should look like?
Mr. Rupy. That's a great question, Senator. And I think a
couple things. And the first point I want to emphasize is that
the civil enforcement authority that the FCC and FTC have is
effective and it's important. And when they initiate those
actions and take those actions, those actions send a very
strong message to bad actors. So we applaud those types of
actions targeted at these illegal robocallers. With that being
said, you know, we certainly believe that given the financial
harm that these activities cause, the emotional harm that these
activities cause, both of which are significant, criminal law
enforcement is warranted.
Now, I am not an expert, if you will, on criminal law
enforcement, but my sense is that there are sufficient or
existing statutes on the books, whether it's bank fraud, wire
fraud, RICO statutes, whereby a criminal--a Federal criminal
enforcement agency can target these actors. And if I'm not
mistaken, I think the FCC's citation against Mr. Abramovich
cites the Wire Fraud Act, which is a Federal criminal statute.
So, you know, my sense is we have tools in the toolbox to
go after these bad actors from a criminal perspective.
Senator Cortez Masto. And so, Ms. Greisman and Ms. Harold,
do you think--would you agree there's maybe tools out there
that we could look to, to mirror?
Ms. Greisman. I'm very familiar with the case that you
referred to and with the set of facts you described. There are
limitations to civil law enforcement; we're well aware of that.
We work closely with our counterparts at the Department of
Justice. There have been a significant number of criminal cases
brought against telemarketers engaged in hard-core fraud, wire
fraud, mail fraud, as well as some that were involved in Do Not
Call violations and robocall violations. And we're committed to
working with our criminal colleagues to get greater deterrent
effect.
Senator Cortez Masto. OK. Thank you.
Ms. Harold. The same.
Senator Cortez Masto. Thank you.
Let me ask you, Mr. Delacourt. In May of last year, the
Chamber submitted a comment to the FCC on a petition from a
group called All About the Message, which hoped to remove
automated voice-mail from the authority of the TCPA. The
comment in support of All About the Message argued that a
central problem with the unchecked expansion of the TCPA's
prohibition is that it is not the unscrupulous scam
telemarketers that are targeted by the TCPA litigation, but,
rather, legitimate domestic businesses. And you also mentioned
this in your testimony today.
While the TCPA certainly was designed to target scammers,
my understanding is it was also designed to prevent robocalls
in general even from legitimate businesses. Consumers don't
want to be bothered, that's the intent, why Congress acted.
So what I would like to know, is it the position of the
U.S. Chamber that robocalls should be entirely legal if not
done for a fraudulent purpose?
Mr. Delacourt. No, that's not the position of the Chamber.
The distinction I was trying to draw was between actors in the
economy who are constrained by law and regulation and who will
comply with things like the Do Not Call list, and others who
are scofflaws who are only susceptible to solutions through
technology like blocking or apps or things that so you can
blacklist those numbers. You generally won't need those against
legitimate companies who are concerned with law enforcement,
the idea that not only that they will be sued, but that they
will suffer brand damage and customer relationship damage as a
result of being branded as an abusive robocaller.
Senator Cortez Masto. But there are legitimate businesses
that engage in abusive calls is my understanding. Isn't that
correct?
Mr. Delacourt. It is certainly the case that there have
been legitimate grievances against businesses and misconduct,
but I would say that the mass of the activity that is the
source of the consumer complaints is not on that side of the
house for the reasons I've discussed today, that what
businesses want to do is lawfully communicate with their
customers, they want to build a relationship, not destroy a
relationship. And so, you know, while there may be instances in
which companies have done that either through vendors or other
issues, it's not the massive--the complaints from consumers,
the activity that's giving rise to consumer complaints is the
abusive robocallers.
Senator Cortez Masto. And I know my time is running out,
but I see, Ms. Saunders, you're looking to ask a question.
Mr. Chair, is it all right if she responds?
The Chairman. Quickly.
Senator Cortez Masto. Thank you.
Ms. Saunders. I would beg to differ with my colleague to my
right. If you look at the numbers of the top robocallers as
compiled by the telecommunications blockers, they are not
scammers, they are what we call legitimate businesses. In fact,
in the chart in my testimony, we've named them, and those are--
many of them are members of the Chamber of Commerce. I'm not
saying they've engaged in scams, I'm saying they have engaged
in extensive robocalls which are complained about by consumers.
Whether or not those calls are illegal goes to the question of
whether consent was originally obtained and whether the calls
continue to be made after the consumers have revoked consent.
Those are very important questions that consumers need
protection on.
Senator Cortez Masto. Thank you.
And thank you, Mr. Chair, for your indulgence.
The Chairman. Senator Markey.
Senator Markey. Thank you, Mr. Chair, very much.
I think Mr. Abramovich is just one bad actor in a universe
of bad actors of people who try to exploit the vulnerability of
people at home with these phone calls that just keep coming in
and disturbing their family peace and quiet. And it's an
industry solely predicated on contacting consumers by any means
possible, debt collectors, telemarketers, insurance providers,
and that's just a short list of the many different industries
that seek to exploit this.
And the only thing that protects them is the Telephone
Consumer Protection Act of 1991. And I am the author of that
law, and I will just tell you that the key word that I wanted
to have built in is the word ``consent.'' Consent is the
bedrock of the TCPA, and while technology may change, that key
principle does not.
Therefore, it is the FCC's obligation to use its authority
to adapt to changing technologies and ensure consumers have
robust enforceable protections against the onslaught of
unwanted and abusive calls and texts. And their work is more
important now than ever because the D.C. Circuit Court of
Appeals recently struck down portions of the FCC's 2015 rules,
which updated protections for the smartphone era.
While the court case was a setback, the spirit and the
intent of the TCPA is as clear today as it was in 1991. One,
callers must have affirmative permission from the consumer
before using autodialers, which are technologies that can call
and text countless consumers at one time, and, two, consumers
should always have reasonable means to revoke consent, to say
no from receiving any more calls or texts.
So, Ms. Saunders, if you would, is there any reason why the
FCC cannot use its authority under the TCPA to ensure consumers
have an easy way to revoke consent and require callers using
autodialers to receive permission before calling or texting a
consumer? And what harms could arise if weak protections are
adopted?
Ms. Saunders. Senator Markey, thank you for the question.
One of the most critical issues that was sent back to the FCC
as a result of the D.C. Circuit order was the definition of
``autodialer.'' And if the FCC bows to the calling industry and
defines that equipment very narrowly, consumers will be
significantly harmed because they won't have the option to
consent or revoke consent from calls that are made by equipment
that is now covered or considered to be covered by an
autodialer.
So one big issue is that if autodialer is not
sufficiently--defined sufficiently broadly, it won't cover
texts. There's no independent language in the TCPA that will
cover texts unless the ``autodialer'' definition is covered.
The other issue that is bound to come up again at the FCC
is how to revoke and whether consumers even have the right to
revoke. A recent Second Circuit opinion held that consumers,
once they've consented, by contract, do not have the right to
revoke. That's the position of the caller in the first example
in my testimony. They said once she gave consent, she can never
say no.
So the harm to consumers is, A, that they may not have the
option to consent and then revoke; or, B, they may not be able
to revoke at all.
Senator Markey. Yes. Right. So it sounds like the ``Me
Too'' movement here. Consent once is consent forever, huh?
Ms. Saunders. Exactly.
Senator Markey. And people have a right to say no at any
point, that's the way it should be. Now, we made a mistake, and
we just don't want that kind of conduct to continue.
So, as I said earlier, I drafted a letter to the Chairman
today asking for a comprehensive definition of ``autodialer,''
ensuring all callers must receive permission before robocalling
or robotexting a consumer, and preserving consumers' rights to
revoke consent should they no longer wish to receive calls or
texts.
So, Ms. Harold, will the FCC heed our call and establish
robust protections?
Ms. Harold. Mr. Chairman--Mr. Markey, sorry--as the
Enforcement Bureau Chief, I'm not in a position to tell you
exactly what the Commission will do and how soon it will do it,
but people of the Commission I can tell you are well aware of
the letter that you provided to the Chairman today, as well as
the D.C. Circuit opinion in ACA International.
Senator Markey. So you're working on this issue? You are
going to proceed toward trying to put protections on the books?
Ms. Harold. I can't speak for the Commission. I enforce the
rules that are already before us as opposed to thinking about
how to improve them. But I can take your message back to my
colleagues who are working on that.
Senator Markey. In light of the court decisions, it's time
to go back, redo the rules, and get back out into the
marketplace to protect consumers. And I would urge you to do
that as quickly as possible.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Markey.
Senator Baldwin.
STATEMENT OF HON. TAMMY BALDWIN,
U.S. SENATOR FROM WISCONSIN
Senator Baldwin. Thank you, Mr. Chairman and Ranking
Member.
Thank you to our witnesses.
I have listened to my colleagues and their questioning.
Senator Tester talked about the fact that Montanans perhaps
might be more prone to using the telephone. I certainly would
have that reflection among some of my rural constituencies,
depending on access to other alternative communication tools. I
would also perhaps have that observation about my elderly
constituents. I regularly receive calls from older constituents
who I suspect are more greatly affected by robocalls because
they rely more on the telephone for staying in touch with
friends and family and accessing services and government
benefits and conducting business.
So in today's testimony, we've heard that one approach to
addressing unwanted robocalls is giving consumers more options
to control which calls they receive, including through new
technologies. And I wonder how well these proposals will work
for some of our constituencies, as have been described,
including older Americans.
Ms. Saunders, can you speak to how robocalls may uniquely
affect older or rural-living Americans and how solutions should
take into account the needs of these populations?
Ms. Saunders. Yes, I can. Thank you for the question. We do
have many blocking solutions that are available in the
marketplace, but my understanding is that very few of these
blocking solutions are available for landlines, and seniors
most often rely on landlines more than younger folks, who rely
exclusively on their cell phones. So the blocking technologies
are not really helpful for them, which leaves seniors much more
vulnerable to both the abusive repeated phone calls and the
inability of finding blocking.
I will say that I'm 64, and now I am getting an onslaught
of calls from the Medicare Health Center, all who know my name
and mispronounce it every time. They call me three or four
times a day offering me Medicare health supplement. So that's
coming on my home phone and now my cell phone. I don't know
where they're getting that information, and they are not
stopping calling. So they--that's presumably a legitimate
business, but that is--that's not paying any attention to the
TCPA requirements.
Senator Baldwin. Thank you.
Mr. Rupy, how are your member companies working to ensure
that the proactive steps that they are taking to address
robocalls will work for constituencies that are more reliant on
landlines?
Mr. Rupy. Thank you for that question, Senator. It's a
great question. And I think from our industry's perspective, as
you've heard repeatedly during this panel, there is no silver
bullet to this--addressing this problem, and we have to take a
holistic solution and we have to take a holistic approach to
addressing it.
So, you know, number one, our industry, we have our
Industry Traceback Group, which USTelecom leads. That includes
cable, wireline, wireless, wholesale providers, a broad range
of companies. And we want to identify the source of these calls
because our collective view is that by identifying the source,
it's like a bad weed, if we pull it out by the root, we're
going to stop millions of calls. So that's number one.
Number two, there is importance for tools, so we want to
make sure that tools do get out there. And I think, as you've
heard, there are more and more tools across a variety of
platforms. So you're seeing tools across IP wireline, wireless,
and copper. They're going to vary. We always encourage
consumers to call their provider, but those tools are out
there. And even on the copper point, you know, I would note
Verizon's recent deployment of this caller ID service, the spam
service, that, you know, provides context for that call, and I
think that's important.
So, you know, those are all the areas that our members are
focused on this.
Senator Baldwin. OK. If I could just do a quick follow-up.
Just can you just tell me how the industry traceback works?
Mr. Rupy. So the way that effort works, Senator, is that we
basically have a collective. We have our 22 member companies.
These are some of the largest companies out there: AT&T,
Verizon, Frontier, Comcast, Charter, Sprint. And----
Senator Baldwin. So are they tracing back based on traffic
that they notice independently, or do they have to be tipped
off by, say, a landline consumer or customer that they're
getting these calls in order to enable a traceback?
Mr. Rupy. Generally speaking, Senator, the companies are
sourcing these tracebacks internally. So in other words, these
companies all have network operations centers where they are
actively monitoring for suspicious traffic 24/7/365. When they
find an instance where they have identified traffic that they
believe is illegal or it verified as illegal, the group will
initiate traceback, and what makes traceback difficult today, I
equate it to peeling back the layers of an onion. Any call can
go through perhaps 10 providers, but each provider, in the
course of that call, they can only see to whom they handed it
to and from whom they got it from. They don't know the
subsequent carriers or the preceding carriers. So we work
collectively to accelerate that process so that, you know, we
can get the ball down the field closer to the origin of the
call.
Senator Baldwin. Thank you.
The Chairman. Thank you, Senator Baldwin.
Anything for the good of the--to close it out?
Senator Blumenthal.
Senator Blumenthal. Just an observation. Mr. Rupy, I
appreciate your citing a holistic approach and the services
that are now available. I would just point out that they're
available at a cost, and sometimes significant cost, correct?
Mr. Rupy. Senator, there is both--there are free--free
services out there, and some are at a cost. But there is a
diversity of services that are available out there both from
providers, from third-party providers, carriers. Some are free,
some may have a charge.
Senator Blumenthal. Thank you.
Mr. Rupy. But the examples I cited in my oral testimony
both are free.
Senator Blumenthal. Thank you.
The Chairman. Thank you, Senator Blumenthal.
I thank the panel. This has been very helpful, and we
appreciate your insights.
I'm going to ask unanimous consent to include in the
letter--or I should say in the record--several letters, one
from Epic, one from CTIA, and one from CBA.
[The information referred to follows:]
Electronic Privacy Information Center
Washington, DC, April 16, 2018
Hon. John Thune, Chairman,
Hon. Bill Nelson, Ranking Member,
U.S. Senate Committee on Commerce, Science, and Transportation,
Washington, DC.
RE: ``Abusive Robocalls and How We Can Stop Them''
Dear Chairman Thune and Ranking Member Nelson:
We write to you regarding tomorrow's hearing on ``Abusive Robocalls
and How We Can Stop Them.'' \1\ We appreciate your interest in this
important issue.
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\1\ Abusive Robocalls and How We Can Stop Them, S. Comm. on
Commerce, Science, & Transportation, 115th Cong. (April 17, 2018),
https://www.commerce.senate.gov/public/index.cfm/hearings?ID=E0EB17D2-
A895-40B4-B385-F94EA2716957.
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The Electronic Privacy Information Center (``EPIC'') is a public
interest research center in Washington, D.C.\2\ EPIC played a leading
role in the creation of the Telephone Consumer Protection Act
(``TCPA'') and continues to defend the Act,\3\ one of the most
important and popular privacy laws in the history of the United States.
EPIC supported establishment of the original Do Not Call registry.\4\
EPIC provided numerous comments to the Federal Communications
Commission (``FCC'') and the Federal Trade Commission (``FTC'') on the
implementation of the TCPA, and maintains online resources for
consumers who seek to protect their rights under the TCPA.\5\ EPIC has
testified twice in congressional hearings on robocalling.\6\ Last year
EPIC submitted comments to the FCC, expressing support for a new rule
that would allow phone companies to block calls from numbers they know
are invalid, such as numbers that have not been assigned to a
subscriber.\7\ EPIC also submitted an amicus brief in ACA International
v. FCC, 885 F.3d 687 (D.C. Cir. 2018).\8\
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\2\ EPIC, About EPIC (2016), https://epic.org/epic/about.html.
\3\ See, e.g., Telephone Advertising and Consumer Rights Act, H.R.
1304, Before the Subcomm. on Telecomms. And Fin. of the H. Comm. on
Energy and Commerce, 102d Cong., 1st Sess. 43 (April 24, 1991)
(testimony of CPSR Washington Office director Marc Rotenberg), https://
www.c-span.org/video/?18726-1/telephone-solicitation; Brief of Amici
Curiae Electronic Privacy Information Center (EPIC) and Six Consumer
Privacy Organizations in Support of Respondents, ACA Int'l v. FCC, No.
15-1211 (D.C. Cir. Jan. 22, 2016), https://epic.org/amicus/acaintl/
EPIC-Amicus.pdf; National Consumer Law Center et al., Petition for
Reconsideration of Declaratory Ruling and Request for Stay Pending
Reconsideration In the Matter of Broadnet Teleservices LLC Petition for
Declaratory Ruling, CG Docket No. 02-278 (2016).
\4\ Comments of EPIC, In the Matter of Rules and Regulations
Implementing the Consumer Protection Act of 1991, FCC. Docket No. 02-
278 (Dec. 9, 2002), https://epic.org/privacy/telemarketing/
tcpacomments.html.
\5\ See, e.g, EPIC, EPIC Administrative Procedure Act (APA)
Comments, https://epic.org/apa/comments/; EPIC, Telemarketing and the
Telephone Consumer Protection Act (TCPA), https://epic.org/privacy/
telemarketing/.
\6\ Marc Rotenberg, EPIC President, Testimony and Statement for the
Record, H.R. 5126, the Truth in Caller ID Act of 2006, H.R. Comm. on
Energy and Commerce, Subcomm. on Telecommunications and the Internet,
109th Cong. (2006), https://epic.org/privacy/iei/hr5126test.pdf;
Allison Knight, EPIC Counsel, Testimony and Statement for the Record,
The Truth in Caller ID Act of 2007, S. 704, S. Comm. on Commerce,
Science, and Transportation, 110th Cong. (2007), https://epic.org/
privacy/iei/s704test.pdf.
\7\ Comments of EPIC, Advanced Methods to Target and Eliminate
Unlawful Robocalls, FCC 17-24 (June 30, 2017), https://epic.org/apa/
comments/EPIC-FCC-Robocall-Comments.pdf.
\8\ Brief of Amici Curiae EPIC et al., ACA International v. FCC,
No. 15-1211 (D.C. Cir.), https://epic.org/amicus/acaintl/EPIC-
Amicus.pdf.
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Robocalls are a consistent source of annoyance for American
consumers who confront bad actors that engage in identity theft,
financial fraud, and debt collection scams. Robocalls are consistently
one of the top complaints made to both the FCC and the FTC.\9\ The
transition from land lines to mobile phones\10\ has only made the
problem worse. Unsolicited calls and texts facilitate fraud, drain
battery life, eat into data plans and phone memory space, and demand
attention when the user would rather not be interrupted. Because we
carry our phones with us everywhere,\11\ unwanted calls and texts
interrupt sleep, disturb meetings and meals, and disrupt concentration
wherever we go. For low-income consumers who often rely on pay-as-you-
go, limited-minute prepaid wireless plans,\12\ these unwanted calls and
texts are particularly harmful.\13\
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\9\ Consumer Complaint Center, FCC, https://
consumercomplaints.fcc.gov/hc/en-us/articles/115002234203-Unwanted-
Calls; FTC Releases Annual Summary of Consumer Complaints, FTC, Mar. 3
2017, https://www.ftc.gov/news-events/press-releases/2017/03/ftc-
releases-annual-summary-consumer-complaints.
\10\ 95 percent of American adults own at least one cell phone and
77 percent own smartphones. Mobile Fact Sheet, Pew Research Ctr. (Jan.
12, 2017) http://www.pewinternet.org/fact-sheet/mobile/; Over half of
American households do not have a land line. Stephen J. Blumberg &
Julian V. Luke, Ctrs. for Disease Control & Prevention, Wireless
Substitution: Early Release of Estimates from the National Health
Interview Survey, July-December 2016, at 2 (May 2017), https://
www.cdc.gov/nchs/data/nhis/earlyrelease/wireless201705.pdf.
\11\ More than 70 percent of smartphone users keep their phones
within five feet a majority of the time. Harris Interactive, 2013
Mobile Consumer Habits Study (June 2013), http://pages.jumio.com/rs/
jumio/images/Jumio%20-%20Mobile%20Consumer%20Habits%20Study-2.pdf.
\12\ Federal Communications Commission, Annual Report and Analysis
of Competitive Market Conditions With Respect to Mobile Wireless,
Eighteenth Report, WT Docket No. 15-125, 44, 73, 95-96 (Dec. 23,
2015).
\13\ Bill Moack, Feds, Fla. Shut Down Robocall Ring That Targeted
Seniors, Clarion Ledger (Jun. 9, 2017), http://www.clarionledger.com/
story/business/2017/06/09/feds-fla-authorities-shut-down-robocall-ring-
targeted-seniors/371452001/.
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Current laws and penalties for illegal robocalls have not been
enough to stop these calls. Even with the private right of action
contained within the TCPA, illegal, predatory behavior continues. This
is despite the fact that in general TCPA cases are among the most
effective privacy class actions because they typically require
companies to change their business practices to comply with the law.
However, more must be done. While consumers now have more options to
block calls from their home and cell phones, they can only do so after
they have received these illegal and bothersome phone calls.
D.C. Circuit Decision
The recent decision in ACA International v. FCC\14\ was a generally
positive outcome for consumers, but created some ambiguity surrounding
the definition of ``automated telephone dialing system'' (``ATDS'').
The court upheld the FCC's interpretation of the consent rule, which
allows consumers to revoke consent using ``any reasonable means clearly
expressing a desire to receive no further messages from the caller.''
\15\ The court also affirmed the FCC's conclusion that callers cannot
``unilaterally prescribe the exclusive means for consumers to revoke
consent.'' \16\ But the court also held that the FCC's definition of
ATDS under the TCPA was an unreasonably expansive because it could
include ordinary smartphones. This creates some uncertainty regarding
the scope of ATDS devices.
---------------------------------------------------------------------------
\14\ No. 15-1211, 2018 WL 1352922 (D.C. Cir. Mar. 16, 2018),
https://epic.org/amicus/acaintl/15-1211-1722606.pdf.
\15\ Id. at 5.
\16\ Id. at 17.
---------------------------------------------------------------------------
A broad definition of ATDS should be preserved. The court only
struck down the FCC's 2015 order, leaving the 2003 and 2008 orders in
place. The ATDS definition under those orders would cover most
autodialers responsible for unwanted calls. But companies and scammers
may continue to seek to circumvent the TCPA by developing technology
that falls outside of the definition of ATDS. Any further narrowing of
the ATDS definition would harm consumers.
EPIC's Recommendations
EPIC is in favor of rules that would (1) allow phone providers to
proactively block numbers that are unassigned, unallocated, or invalid;
(2) block invalid numbers without requiring consumer consent; (3)
provide strong security measures for any database of blocked numbers
that may be created; and (4) prohibit spoofing with the intent to
defraud or cause harm.
First, proactive blocking of these numbers is the most effective
way to protect consumers. If providers wait until complaints pile up,
consumers will be exposed to calls that are predatory and fraudulent.
Some consumers choose not to answer calls from numbers that they
suspect are invalid based on caller ID information. But some consumers
use landlines that may not have or use caller ID, and upon answering
the phone they would have no way to be alerted to the fact that the
call they are receiving is likely an illegal robocall.
Second, phone providers should not require consent from consumers
before blocking calls from invalid numbers. No reasonable consumer
wants to receive robocalls. This is evident from the fact that these
calls are consistently the number one complaint at both the FTC \17\
and the FCC. A consent for blocking requirement would leave individuals
and, particularly, seniors at risk of identity theft, fraud, and
harassment by phone scammers.
---------------------------------------------------------------------------
\17\ FTC Releases Annual Summary of Consumer Complaints, FTC, Mar.
3 2017, https://www.ftc.gov/news-events/press-releases/2017/03/ftc-
releases-annual-summary-consumer-complaints.
---------------------------------------------------------------------------
Third, databases and ``white lists'' of blocked numbers require
strong security measures. EPIC has long advocated for strong security
measures to protect personal data stored in databases.\18\ EPIC
recommends data minimization, but in this case it is necessary to
maintain a list of all numbers that have been blocked by providers.
Such a database will be an attractive target for hackers.\19\ If
compromised, it would not only allow scammers to continue with their
illegal behavior, but also would severely hamper any further efforts to
implement widespread blocking of invalid numbers. EPIC has suggested
the implementation of certain procedures that would help enhance the
security of a database of blocked numbers.\20\
---------------------------------------------------------------------------
\18\ See e.g., Comments of EPIC, Privacy Act of 1974; Department of
Homeland Security/ALL--038 Insider Threat Program System of Records,
Mar. 28, 2016, https://epic.org/apa/comments/EPIC-DHS-Inisder-Threat-
Comments.pdf; Comments of EPIC, Department of Defense (DoD) Insider
Threat Management and Analysis Center (DITMAC) and DoD Component
Insider Threat Records System, Jun. 2, 2016, https://epic.org/apa/
comments/index.php?y=2016; Comments of EPIC, Privacy Act of 1974:
Implementation of Exemptions; Department of Homeland Security/U.S.
Customs Enforcement-016 FALCON Search and Analysis System of Records,
Jun. 5, 2017, https://epic.org/apa/comments/EPIC-DHS-FALCON-Database-
Comments.pdf.
\19\ Bruce Schneier, Data Is a Toxic Asset, Schneier on Security,
Mar. 4, 2016, https://www.schneier.com/blog/archives/2016/03/
data_is_a_toxic.html (``saving [data] is dangerous because failing to
secure it is damaging. It will reduce a company's profits, reduce its
market share, hurt its stock price, cause it public embarrassment,
and--in some cases--result in expensive lawsuits and occasionally,
criminal charges. All this makes data a toxic asset, and it continues
to be toxic as long as it sits in a company's computers and
networks.'')
\20\ See, e.g., Reply Comments of EPIC, Advanced Methods to Target
and Eliminate Unlawful Robocalls, 82 Fed. Reg. 22,625 (July 31, 2017).
---------------------------------------------------------------------------
Fourth, any regulation of spoofing should contain an intent
requirement--``intent to defraud or cause harm.'' This language would
cover the problem of pretexting, where bad actors use the number of a
trusted entity, such as a bank or government agency, to fool people
into giving the caller personal information. But it would also preserve
legitimate uses of spoofing where callers wish to withhold their phone
number, including drug treatment services, suicide prevention, domestic
abuse, and crime tip line. The default for disclosure of identity
should be in control of the non-commercial callers. A spoofing
regulation without this intent requirement could hurt the privacy
interests of callers.
We ask that this Statement from EPIC be entered in the hearing
record. EPIC looks forward to working with the Committee on these
issues of vital importance to the American public.
Sincerely,
/s/ Marc Rotenberg
Marc Rotenberg
EPIC President
/s/ Alan Butler
Marc Rotenberg
EPIC Senior Counsel
/s/ Christine Bannan
Christine Bannan
EPIC Administrative Law and Policy Fellow
______
Consumer Bankers Association
Washington, DC, April 17, 2018
Hon. John Thune,
Chairman,
Committee on Commerce, Science, and Transportation,
U.S. Senate,
Washington, DC.
Hon. Bill Nelson,
Ranking Member,
Committee on Commerce, Science, and Transportation,
U.S. Senate,
Washington, DC.
Dear Chairman Thune and Ranking Member Nelson:
On behalf of the Consumer Bankers Association (CBA), I would like
to commend the Committee on Commerce, Science, and Transportation's for
holding the hearing on ``Abusive Robocalls and How We Can Stop Them.''
CBA is the voice of the retail banking industry whose products and
services provide access to credit to millions of consumers and small
businesses. Our members operate in all 50 states, serve more than 150
million Americans, and collectively hold two-thirds of the country's
total depository assets.
The influx of fraudulent and illegal robocalls by bad actors has
become an ever-growing problem for consumers. As Congress examines how
to prevent these burdensome calls and address those with ill-
intentions, it is imperative to distinguish these robocalls from the
beneficial communications between legitimate businesses and their
customers.
Consumers utilize many useful communications through calls and
texts ranging from low balance notifications to repayment counseling,
among other important notices and alerts. While the Telephone Consumer
Protection Act (TCPA) was enacted nearly 27 years ago and aimed to
protect consumers from intrusive and unwanted telemarketing calls, it
has also forced financial institutions to limit many pro-consumer, non-
telemarketing communications. Failing to reflect both changes in
technology and the contact preference of consumers, the TCPA is barring
businesses from providing important information that consumers want and
need to receive. CBA members are committed to the spirit of the TCPA
and go to great lengths to comply, but the recent interpretations of
the law have stifled legitimate businesses' ability to better serve and
communicate with their customers.
Since enacted, TCPA litigation has become a thriving industry for
class action lawyers. Mobile applications have been created for the
sole purpose of collecting and reporting calls to waiting attorneys,
helping to drive a 1,272 percent increase in TCPA litigation from 2010
to 2016.\1\ Attorneys are benefiting from the outdated law with
settlement fees averaging $2.4 million, dwarfing the average plaintiff
award of $4.12.\2\
---------------------------------------------------------------------------
\1\ https://webrecon.com/2016-year-in-review-fdcpa-down-fcra-tcpa-
up/
\2\ https://ecfsapi.fcc.gov/file/60001016697.pdf
---------------------------------------------------------------------------
The FCC has an opportunity to re-examine the TCPA, and prescribe
new guidelines for the industry. On March 16, 2018, the U.S. Court of
Appeals for the D.C. Circuit issued a unanimous decision in ACA
International v. Federal Communications Commission (FCC) vacating the
FCC's overbroad reading of what qualifies as an automatic dialer, most
notably addressing the FCC's 2015 interpretation of ``capacity'' of an
automatic dialer, and the FCC's order on reassigned numbers, finding
that a one-call safe harbor for companies who inadvertently contacted a
number that had been reassigned to be ``arbitrary and capricious.''
The FCC should re-evaluate the definition of an automatic dialer to
include those technologies that use random and sequential numbers--
typically for marketing or fraudulent purposes--and not those that
employ existing customer contact lists stored by legitimate businesses.
Additionally, the FCC should continue its pursuit of a reassigned
numbers database to create an all-encompassing source for businesses to
scrub their contact lists, and permit a safe-harbor from any violations
of the law for those businesses that voluntarily use the database to
determine if a phone number has been reassigned or improperly entered
to their lists. Establishing a solution that permits, but does not
require the industry to scrub numbers against such a list is crucial.
We urge the Committee to encourage the FCC to take prompt action in
these matters.
CBA members greatly appreciate this thoughtful approach to
examining the issues surrounding illegal and burdensome robocalls. We
remain committed to working with the Committee to protect consumers
from abusive robocalls while providing legitimate businesses with much
needed clarification and reasonable standards on how to reach their
customers.
Sincerely,
Richard Hunt,
President and CEO,
Consumer Bankers Association.
______
CTIA
April 18, 2018
Hon. John Thune, Chairman,
Hon. Bill Nelson, Ranking Member,
Committee on Commerce, Science, and Transportation,
United States Senate,
Washington, DC.
Dear Chairman Thune and Ranking Member Nelson:
CTIA commends the Committee for holding today's hearing to examine
the problem of abusive robocalls. CTIA understands consumer annoyance
over these calls and we have continued to work actively and in close
coordination with Congress, the Federal Communications Commission
(FCC), and the Federal Trade Commission (FTC) to address this serious
issue on many fronts. Unfortunately, the tactics used by today's
malicious spoofers, scammers and other bad actors that generate abusive
robocalls have evolved dramatically from when Congress passed the
Telephone Consumer Protection Act (TCPA) over twenty-five years ago.
Aggressive enforcement of bad actors is key to combatting the scourge
of illegal robocalls and we applaud this Committee for its focus on
enforcement of illegal robocallers. Tracking down and prosecuting bad
actors should be the centerpiece of robocall mitigation efforts. In
addition to robust FCC and FTC enforcement efforts, CTIA and its
members have implemented a multifaceted approach to robocalls--one that
includes a variety of technical solutions and industry initiatives to
protect consumers, including development of new applications, new
network-based tools, and industry work to deploy call authentication to
mitigate caller id spoofing.
Industry Technical Solutions. Industry has been at the forefront of
the fight against malicious spoofing and robocalls, having collectively
blocked billions of robocalls. CTIA and its members continue to
innovate new solutions to stop illegal and unwanted robocalls,
including by adopting new call blocking and spam call prediction tools
for customer use. The application ecosystem around robocall blocking
technology has exploded in recent years. In 2016 there were over 85
call-blocking applications available across all platforms, including
several offered by carriers to their customers at no charge. CTIA has
launched a website devoted to providing consumers instructions on how
to stop robocalls, and our website has links to these call blocking
applications. Since launch of our website, there are now over 550
applications available, a 495 percent increase in call blocking,
labeling, and identifying applications to fight malicious robocalls.
Wireless Industry Cooperation with Government and Other Stakeholder
Initiatives. In addition to technology development, the wireless
industry has worked with other stakeholders, including government
entities, to reduce abusive robocalls. For example, the industry has
implemented recommendations from the October 2016 FCC Strike Force
Report, including partnering with standards bodies and accelerating
STIR/SHAKEN call authentication development by six months. This
technology will give service providers the tools to consistently
authenticate, digitally sign, and verify calling party numbers--acting
like a digital fingerprint to determine callers are who they say they
are. CTIA members also participate in U.S. Telecom's Traceback efforts,
and that Working Group is sharing its information with the FCC and FTC
to identify the source of illegal robocall traffic. A component of
these efforts is preventing false positives to protect communications
from legitimate callers. CTIA and its members also assist the FCC and
FTC with enforcement actions against robocallers and maintain
relationships with call fraud bureaus that may initiate investigations
after a suspected mass calling event. CTIA has also created its own
Robocall Working Group and provides consumer-facing resources on how to
limit and report illegal robocalls.
CTIA Member Actions. CTIA's members have also taken strides to
combat malicious robocalls. Many providers, including all of the
national wireless carriers, offer robocall abatement options for their
customers that are not dependent on the customer first downloading a
third-party application. Just some of the efforts of several CTIA
members are described below:
AT&T launched AT&T Call Protect in December 2016 as a free
network service. It can flag suspected spam calls, allowing the
customer to choose whether to answer or not, and allowing
customers to manually block an unlimited number of specific
telephone numbers for thirty-day intervals. In November 2017,
AT&T made Call Protect available to its IP Wireline Home Phone
Users Network. In addition, AT&T has blocked 3.5 billion
unwanted robocalls in cases where its business contracts allow
it to block impermissible traffic using a new program that
detects violators through network data analysis. Call data
analysis and heuristics are powered by Hiya.
Sprint offers Premium Caller ID service, which allows users
to identify nuisance calls and provides an option to block
them. This solution directly leverages data and network
intelligence powered by a partnership with Cequint, a wholly
owned subsidiary of Transaction Network Services.
T-Mobile launched Scam ID in March 2017 as an automatic
network-based free service for all postpaid T-Mobile customers
and MetroPCS customers. Scam ID identifies calls from known
phone scammers and displays ``Scam Likely'' on the device,
giving customers the option to answer or block the number.
Customers may also choose to use Scam Block, another free
service to have calls from known scammers blocked. These
solutions are powered by network call data analysis and
heuristics provided by PrivacyStar, and have resulted in more
than 3 billion scam calls tagged since launch.
Verizon offers all wireless customers who subscribe to its
Caller Name ID service a free feature that identifies potential
spam calls and displays the level of risk with a ``risk
meter.'' The service is also powered by Cequint. They also
offer a free robocall labeling solution called Spam Alerts for
all wireline customers with Caller ID. The feature warns
customers about robocalls identified by Verizon's analytics
engine and its robocall mitigation team.
These strategies and technologies highlight the wireless industry's
hard work to stay ahead of malicious robocallers, and that work
continues. We appreciate this Committee's efforts to explore ways to
further reduce the transmission of illegal robocalls and continue to
encourage aggressive enforcement of bad actors. We look forward to
continuing to work with you and your colleagues on this important
issue.
Regards,
Meredith Attwell Baker,
President and CEO.
The Chairman. And I would also note that we'll keep the
hearing record open for a couple of weeks, and if the members
of the Committee have questions that they can submit for the
record, that you could get those back to us as quickly as
possible, that would be most appreciated.
But thank you all again for your willingness to participate
today and for your honest answers about what's happening out
there in the world of robocalls. It's something that affects
literally pretty much every American who has a phone.
So thank you. This hearing is adjourned.
[Whereupon, at 12:03 p.m., the hearing was adjourned.]
A P P E N D I X
April 17, 2018
Hon. John Thune,
Chairman,
Committee on Commerce, Science, and Transportation,
U.S. Senate,
Washington, DC.
Hon. Bill Nelson,
Ranking Member,
Committee on Commerce, Science, and Transportation,
U.S. Senate,
Washington, DC.
Dear Chairman Thune and Ranking Member Nelson,
The undersigned trade associations and industry groups, who
represent thousands of financial institutions and other businesses
across the country, appreciate the opportunity to comment on the Senate
Commerce, Science, and Transportation Committee's hearing entitled
``Abusive Robocalls and How We Can Stop Them.''
Illegal and fraudulent robocalls can be a time-consuming and
annoying burden on consumers. Congress should rightfully evaluate how
it can prevent these invasive and burdensome calls and remove bad
actors from the marketplace. However in doing so, it is important to
distinguish between fraudulent and illegal robocalls and calls from
legitimate businesses seeking to communicate with their members and
customers.
Today, many businesses call or text their members and customers in
an effort to communicate time-sensitive, critical information, such as
low balance notifications, due date reminders, and fee avoidance
alerts. Consumers want and expect these types of communications in the
most convenient way possible, including via cell phone. Unfortunately,
the Telephone Consumer Protection Act (TCPA), while enacted in 1991 to
reduce consumers' costs at a time when cell phone users were charged by
the minute, has had the unintended consequence of stifling pro-
consumer, non-telemarketing communications. The TCPA has become rife
with litigation, with a 1,272 percent increase in TCPA lawsuits from
2010 to 2016. This litigation risk has led businesses to limit--and, in
certain instances, to eliminate--communications consumers want and
expect to receive.
On March 16, 2018, the U.S. Court of Appeals for the D.C. Circuit
issued a decision in ACA International v. Federal Communications
Commission (FCC), vacating portions of a 2015 FCC Order interpreting
various sections of the TCPA. This ruling gives the FCC an opportunity
to re-examine the TCPA, and prescribe new guidelines for the industry.
It is critical the FCC seize this opportunity to clarify the
definition of an Automatic Telephone Dialing System (ATDS) so that it
is consistent with the statute and take other action to ensure that
consumers whose mobile phone numbers have been reassigned continue to
receive important communications. Doing so will permit businesses to
provide beneficial communications to their members and customers
without the threat of costly litigation driven by serial plaintiffs and
attorneys who have taken advantage of the ATDS definition recently
vacated by the D.C. Circuit. We urge the Committee to encourage the FCC
to take prompt action in these matters, and to continue its efforts to
establish a free or low-cost reassigned numbers database and provide a
safe-harbor for businesses that use the database.
Legitimate businesses need clarification and standards for how to
best serve their members and customers, and are equally concerned about
the level of fraudulent and illegal actors in this space. We support
the FCC's efforts to deter bad actors while facilitating the ability of
legitimate businesses to contact consumers promptly and efficiently. We
look forward to working with the Committee as it pursues this issue.
Sincerely,
American Bankers Association
Consumer Bankers Association
Credit Union National Association
Electronic Transactions Association
Independent Community Bankers of America
National Association of Federally-Insured Credit Unions
National Council of Higher Education Resources
Student Loan Servicing Alliance
______
April 28, 2017
Ms. Marlene H. Dortch
Secretary
Federal Communications Commission
Washington, DC.
Ex Parte Submission
RE: Advanced Methods to Target and Eliminate Unlawful Robocalls, Notice
of Proposed Rulemaking, CG Docket No. 17-59
Dear Ms. Dortch:
On behalf of ACT | The App Association, Alliance for
Telecommunications Industry Solutions (ATIS), CTIA and USTelecom, we
are filing the attached Industry Robocall Strike Force report. Linda
Vandeloop (AT&T) provided a copy of this report to Mark Stone and Micah
Caldwell on April 26, 2017. In accordance with section 1.1206(b)(2) of
the rules of the Federal Communications Commission, this letter is
being filed electronically with your office. Please feel free to
contact us if you have any questions.
Sincerely,
/s/ Brian Scarpelli /s/ Thomas E. Goode
Brian Scarpelli Thomas E. Goode
Senior Policy Counsel General Counsel
ACT | The App Association ATIS
/s/ Krista L. Witanowski /s/ Kevin G. Rupy
Krista L. Witanowski Kevin G. Rupy
Assistant Vice President, Vice President, Law & Policy
Regulatory Affairs USTelecom
CTIA
Attachment
cc: Micah Caldwell
Mark Stone
______
Industry Robocall Strike Force Report
1. Introduction (AT&T)
1.1. Overview
On October 26, 2016, the Industry Robocall Strike Force issued a
report describing progress made during the first sixty days and
outlining a process for continuing the work necessary to develop an
industry solution to the robocall problem. The industry committed to
continue to work together and to issue another status report in six
months. ACT, ATIS, CTIA and USTelecom, who count among their members
many Strike Force members, agreed to facilitate that process and work
together toward long term goals.
Many industry leaders in robocall mitigation have concluded that
there is no ``silver bullet'' to solve the problem. However, to
mitigate the problem of illegal robocalls, the industry is implementing
a diverse multitude of evolving mitigation tools and efforts so that it
becomes too costly for illegal robocalling campaigns to overcome the
industry's dynamic mitigation techniques.
The organizations focused on continuing work in the same areas
identified by the Industry Strike Force during the first sixty days:
Authentication
Empowering Consumer Choice
Detection, Assessment, Traceback and Mitigation
Regulatory Support
Each organization met with their members on a regular basis and the
organizations held planning meetings at least twice a month.
Additionally, monthly meetings were held with all strike force members.
Over the past six months much additional progress has been made and
is outlined in this report. Additionally, this report will summarize
how the industry will continue its efforts.
1.2. Description of Organizations and Membership
1.2.1. ACT | The App association (``ACT'') represents more than
5,000 app makers and connected device companies in the mobile
economy. Organization members leverage the connectivity of
smart devices to create innovative solutions that make our
lives better. ACT is the leading industry resource on market
strategy, regulated industries, privacy and security.
1.2.2. ATIS is a technology and solutions development organization
that brings together global ICT companies to advance the
industry's pressing business priorities. In addition to the
extensive work being done by ATIS and its members to address
caller ID spoofing and robocalling, ATIS' nearly 200 member
companies are also working to address 5G, Cybersecurity, Smart
Cities, the evolution to content optimized networks (eCON), the
Connected Car, NFV, unmanned aerial vehicles, emergency
services, M2M, quality of service, billing and operations, and
more. These priorities follow a fast-track lifecycle of
development--from design and innovation through standards,
specifications, requirements, business use cases, software tool
kits, open source solutions, and interoperability testing.
ATIS also is a founding partner and the North American
Organizational Partner for the 3rd Generation Partnership
Project (3GPP), the global collaborative which has developed
the Long Term Evolution (LTE) and LTE-Advanced wireless
specifications. It is also a founding Partner of the oneM2M
global initiative, a member of the International
Telecommunication Union (ITU), as well as a member of the
Inter-American Telecommunication Commission (CITEL).
ATIS' membership is diverse and includes participants from key
service providers and vendors, including the following 21 of
the 33 Strike Force members: AT&T, Bandwidth.com, Blackberry,
CenturyLink, Charter, Comcast, Cox, Ericsson, FairPoint,
GENBAND, Google, Inteliquent, LG, Nokia, Qualcomm, Samsung,
Sprint, T-Mobile, U.S. Cellular, Verizon, and West.
1.2.3. CTIA represents the U.S. wireless communications industry.
With members from wireless carriers and their suppliers to
providers and manufacturers of wireless data services and
products, the association brings together a dynamic group of
companies that enable consumers to lead a 21st century
connected life. CTIA members benefit from its vigorous advocacy
at all levels of government for policies that foster the
continued innovation, investment and economic impact of
America's competitive and world-leading mobile ecosystem. The
association also coordinates the industry's voluntary best
practices, hosts educational events that promote the wireless
industry, and co-produces the industry's leading wireless
tradeshow. CTIA was founded in 1984 and is based in Washington,
D.C.
CTIA created a Robocall Working Group (RWG) in early November
2016, shortly after the October 26th release of the Initial
Strike Force Report. Since November of last year, CTIA has
engaged in weekly meetings of the RWG, and has facilitated
members' substantial progress on making robocall control
mechanisms and techniques available to consumers.
Of the 33 Strike Force participants, 15 are CTIA members who
participate actively in CTIA's RWG. Participating members are:
Apple, AT&T, Bandwidth, Ericsson, Inteliquent, LG, Nokia,
Qualcomm, Samsung, Sprint, Syniverse, T-Mobile, US Cellular,
Verizon, West. These members span the wireless ecosystem and
include carriers, VoIP providers, handset and equipment
vendors, infrastructure suppliers and system aggregators.
1.2.4. USTelecom is the premier trade association representing
service providers and suppliers for the telecommunications
industry. USTelecom members provide a full array of services,
including broadband, voice, data and video over wireline and
wireless networks. USTelecom's members are comprised of
companies of all sizes--urban and rural, publicly traded,
privately held, and cooperatives. Collectively, these companies
have a distinguished history of serving America's
communications' needs.
USTelecom members have long demonstrated their commitment to
finding solutions to mitigate robocalls. USTelecom's member
companies understand and appreciate the annoyance and potential
monetary harms inflicted on consumers and businesses resulting
from illegal robocalls. USTelecom has a long track record of
working with consumer, industry and regulatory stakeholders on
ways to mitigate such harms, and has developed strong
relationships with law enforcement agencies at the local, state
and Federal level. The association has also established an
industry working group of more than 20 companies that are
committed to working together to fight the robocall problem.
2. Authentication and Other Technical and Operational Work (ATIS)
The October 26, 2016, Robocall Strike Force Report (Initial Strike
Force Report) noted the significant work that ATIS and its members have
done to address issues associated with robocalling and caller ID
spoofing. In addition to recognizing the significant progress made as
of October 2016, the report also acknowledged the work that ATIS had
underway to further resolve technical and operational impacts. This
report provides a progress update on these efforts, including a summary
of the significant work completed since October and the on-going
efforts to craft technically feasible and broadly implementable
mitigation tools. As ATIS has noted in its monthly updates to the
Strike Force, work to address robocalling and caller ID spoofing began
long before the Strike Force was assembled; this work will not stop
when the Strike Force ends. However, because of the focus of the strike
force and the commitment from the strike force members, ATIS has been
able to accelerate its timeline.
2.1. Introduction and Background
ATIS is examining issues associated with robocalling and caller ID
spoofing from a number of different perspectives:
Technical work. On the technical front, one of the main
focuses of ATIS' work has been the development of the SHAKEN
framework and associated governance structure by the ATIS and
SIP Forum Joint Network-to-Network Interoperability Task Force
(Joint IP-NNI Task Force). However, ATIS' technical work also
includes projects undertaken by ATIS' Packet Technologies and
Systems Committee (PTSC) and the Joint IP-NNI Task Force to
examine SHAKEN-related Best Practices, Attestation and
Origination Identifiers and to develop a framework for the
display of verified caller ID; as well as PTSC efforts to: (1)
examine the feasibility of using Vertical Service Codes to
identify unwanted robocalls; and (2) further analyze its
initial recommendations for Integrated Services User Part
(ISUP) screening indicator interworking.
Testing. The ATIS Testbed Focus Group has also worked on
technical issues associated with the testing of SHAKEN,
including the development of SHAKEN test plans. ATIS has also
partnered with Neustar Trust Labs to offer the ATIS Robocalling
Testbed, a virtualized testbed to advance industry efforts to
mitigate unwanted robocalls and caller ID spoofing.
Operational Work. ATIS' Next Generation Interconnection
Interoperability Forum (NGIIF) is examining SHAKEN and the
proposed governance authority framework to provide operational
guidance to facilitate implementation by the industry.
Numbering-related impacts. ATIS' Industry Numbering
Committee (INC) is examining potential impacts from the
implementation of SHAKEN, the SHAKEN governance framework, and
the potential use of vertical service codes to report unwanted
robocalls.
Finally, ATIS notes that it has continued to collaborate with other
key stakeholder organizations, including CTIA, USTelecom and ACT to
share progress and foster cooperation.
2.2. SHAKEN Framework
ATIS continues to make progress on technical issues and operational
issues associated with the Signature-based Handling of Asserted
information using toKENs (SHAKEN). This work includes publication of
the SHAKEN framework, as well work to facilitate industry
implementation of this framework.
2.2.1. SHAKEN Framework Publication
As noted in the in the Initial Strike Force Report, ATIS and the
SIP Forum accelerated their development of the SHAKEN framework.\1\
---------------------------------------------------------------------------
\1\ Strike Force Initial Report, Section 1.10.1.
---------------------------------------------------------------------------
ATIS and the SIP Forum successfully completed the efforts on this
framework, concluding with its availability in December 2016 and formal
publication in January 2017.\2\ The SHAKEN framework provides a
mechanism for managing the deployment of Secure Telephone Identity
(STI) technologies with the purpose of providing cryptographic
authentication and verification of telephone numbers associated with
calls traversing Internet Protocol (IP)-voice networks. This
specification defines the framework for telephone service providers to
create signatures in Session Initiation Protocol (SIP) and validate
those signatures at the call termination. It defines the various
classes of signers and how the verification of a signature can be used
toward the identification of illegitimate uses of telephone numbers.
---------------------------------------------------------------------------
\2\ A pre-publication draft was made available in December 2016;
final industry approval and publication occurred on January 6, 2017.
---------------------------------------------------------------------------
The document has broad industry support, having been approved by
both ATIS and SIP Forum under their respective transparent, consensus-
based approval processes. Initial feedback has been positive. This
document is available to the industry electronically at no charge.\3\
---------------------------------------------------------------------------
\3\ This document is available electronically at no charge from the
ATIS Document Center at https://www.atis.org/docstore/
product.aspx?id=28297 and from the SIP Forum at https://www.fcc.gov/
news-events/events/2016/10/second-meeting-industry-led-robocall-strike-
force.
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2.2.2. SHAKEN Operational Guidance
A related ATIS work program not referenced in the Initial Strike
Force Report was the development and publication of a document
providing operational guidance for interoperability when implementing
the SHAKEN framework.
ATIS NGIIF developed Interoperability Standards between Next
Generation Networks (NGN) for Signature-Based Handling of Asserted
Information Using Tokens (SHAKEN) as a companion to the SHAKEN
framework. It provides Next Generation Network (NGN) telephone service
providers with a framework and guidance for interoperability as calls
process through their networks implementing SHAKEN technologies
ensuring the mitigation of illegitimate spoofing of telephone numbers.
This document was published in January 2017. This document is available
to the industry electronically at no charge.\4\
---------------------------------------------------------------------------
\4\ This document is available electronically at no charge from the
ATIS Document Center at: https://www.atis.org/docstore/
product.aspx?id=28298.
---------------------------------------------------------------------------
2.3. SHAKEN Authentication/Verification/Attestation Best Practices and
Additional STIR Use Cases
In the Initial Strike Force Report, it was noted that ATIS was
working on the creation of SHAKEN-related Best Practices that carriers
would maintain.\5\ Work is progressing on these two initiatives within
the Joint IP-NNI Task Force.
---------------------------------------------------------------------------
\5\ Initial Strike Force Report, Section 10.1.7
---------------------------------------------------------------------------
The first is focused directly on SHAKEN Best Practices. It
describes how SHAKEN should be deployed along with guidance on
implementing the authentication and verification functions. It shows
how SHAKEN components would map onto the network under representative
deployment scenarios.
The second initiative is focused on the SHAKEN Attestation and
Origination Identifiers, which were discussed in Section 1.5 of the
Initial Strike Force Report.\6\ This work focuses on how the service
provider decides what level of attestation is appropriate, as well as
provides guidance on how the Orig ID can be used to help with
traceback. This document describes problems associated with originating
party spoofing in IP communication networks, identifies potential
options and/or Best Practices related to attestation and the use of the
origination identifiers, and analyzes the pros and cons of mitigation
options.
---------------------------------------------------------------------------
\6\ Section 1.5 of the Initial Strike Force Report addresses this
issue but does not identify a specific long-term objective associated
with this action. Nonetheless, the industry has been working on a
related deliverable.
---------------------------------------------------------------------------
While work has progressed, there remains a good deal of work to be
completed. ATIS and the industry remain committed to completing this
work and hope to complete this by end of 2017.
2.4. Joint Lab Prototype Testing
As noted in the Initial Strike Force Report, ATIS had agreed to
further progress its work to facilitate prototype testing of SHAKEN.\7\
Since the publication of the initial report, ATIS launched a
virtualized testbed to advance industry efforts to mitigate illegal
robocalls and caller ID spoofing.
---------------------------------------------------------------------------
\7\ Initial Strike Force Report, Section 1.0.4.
---------------------------------------------------------------------------
The ATIS Robocalling Testbed, hosted by the Neustar Trust Lab,
allows the testing of SHAKEN by generating end-to-end calls that
include all network functions. The testbed allows service providers and
vendors to test their implementations of SHAKEN in a test environment
to ensure full interoperability. The testbed can provide various
configurations to test individual SHAKEN components or complete network
implementations.
The test plans were developed by the ATIS Testbed Focus Group in
parallel with the development of the SHAKEN framework. This work
started well before the Strike Force, and will continue as the best
practices documents identify additional areas for testing. Updates to
the test plans to cover extensions to SHAKEN are being considered by
the ATIS Testbed Focus Group.
Testing of SHAKEN via the ATIS Robocalling Testbed will be provided
at no cost to the industry through the end of 2017. Membership in ATIS
is not required--any service provider with an assigned Operating
Company Number (OCN) is eligible to participate. Other parties, such as
equipment manufacturers, may participate if they have solutions
relevant to the SHAKEN framework available to test.
There has been active outreach to organizations that have
previously expressed interest in SHAKEN testing. ATIS notes that active
testing is underway. To date, approximately 10 companies have executed
or are in the process of executing the relevant agreements to test, and
a total of 16 companies have executed the testing NDA that would allow
possible future participation in testing.
Strike Force members and others interested in learning more about
the ATIS Robocalling Testbed may visit https://www.neustar.biz/atis-
testbed/index.php.
2.5. Governance Model and Certificate Management Policy Framework
In addition to the development of the underlying technical
framework (i.e., SHAKEN), there is work underway to advance the
governance model associated with this framework. The three initiatives
below would define the ecosystem in which end-to-end cryptographic
authentication and verification of the telephone identity would occur.
2.5.1. Governance Model/Framework
One of the long term goals identified in the Initial Strike Force
Report was to further progress the SHAKEN governance model.\8\
Significant progress has been made on this deliverable by the Joint IP-
NNI Task Force.
---------------------------------------------------------------------------
\8\ Initial Strike Force Report, Section 1.10.7.
---------------------------------------------------------------------------
The SHAKEN governance model identifies the key roles/functions
involved in distributing and managing SHAKEN certificates. The model
envisions a governance authority that would oversee a policy
administrator, which would determine who is entitled to get SHAKEN
certificates, which would be issued by certificate authorities.\9\ The
chart below provides a high-level view of the various roles, including
what is currently addressed by the governance model (``in scope'') and
what is being defined through other work (``out of scope'' for the
framework but addressed in section E.3 below).
---------------------------------------------------------------------------
\9\ The Initial Strike Force Report identified the role of the TA
Administrator, which would do the manual process of working with
service providers to validate they are who they say they are and manage
credentials of Telephone Authorities to have a secret key and the
Service Providers to do Certificate Signing Requests (CSR) transactions
with the Telephone Authorities. This role is now defined under the
draft framework as the STI Policy Administrator.
The model would specify the protocols that will be used to obtain
certificates and the ``key'' that service providers will obtain from
the STI Policy Administrator to prove that they are entitled to get
SHAKEN certificates. ATIS notes that, while this model identifies at a
high-level the functions associated with the STI Governance Authority
and policy administrator, it does not specify the structure of, or
detailed functions associated with, the STI Governance Authority or STI
Policy Administrator.
The work to ensure that the proposed model results in an
implementable solution that is both technically and operationally
feasible has been complex. Proposals to align with existing service
provider certificate management processes are expected to facilitate
and expedite implementation. This work is expected to be completed in
2Q2017.
2.5.2. Framework Operational Guidance
ATIS NGIIF is developing a document examining the operational
implications of the SHAKEN governance model and certificate management.
This document will complement the governance framework currently under
development by the Joint IP-NNI Task Force (see section E.1 above). The
target is to align the publication date with Joint IP-NNI Task Force
governance document.
2.5.3. Governance Ecosystem
ATIS is also working with its members to identify the detailed
functions associated with the governance framework. This work will
complement the governance framework document by examining the ecosystem
that will be necessary to implement that framework by defining in a
more granular fashion the roles of the STI Governance Authority and STI
Policy Administrator. This work, which is expected to result in
consensus-based proposal for the structure of the ecosystem that would
be necessary to support the implementation of SHAKEN by the industry,
is expected to be completed in 2Q2017.
2.6. Display Framework
The Initial Strike Force Report noted the work that ATIS had
underway to further progress its Signaling Verification and Analytics
Information, and Display Framework.\10\ The industry continues to make
progress on the draft Framework for the Display of Verified Caller ID.
Additionally, ATIS notes that there are other initiatives within the
Joint IP-NNI Task Force to: (1) assess mechanisms to signal
verification to legacy call display; and (2) provide input to 3GPP and
track progress on ``verstat'' TEL URI parameter to signal verification
to SIP client. All three deliverables are anticipated to be completed
by the end of 2017.
---------------------------------------------------------------------------
\10\ Initial Strike Force Report, Section 1.8.
---------------------------------------------------------------------------
2.7. Feasibility of Using Vertical Service Codes to Report Unwanted
Robocalls
The Initial Strike Force Report recommended that ATIS investigate
the feasibility of using vertical service codes (i.e., *XX codes) to
report unwanted robocalls.\11\ Two initiatives are under development on
this topic.
---------------------------------------------------------------------------
\11\ Initial Strike Force Report, Section 2.5.2. Although VSCs are
originally defined for TDM networks, concepts could be extended to SIP
networks for SHAKEN
---------------------------------------------------------------------------
The first initiative is being undertaken by ATIS PTSC. Its
objective is to examine the feasibility of using these codes to report
unwanted robocalls, including whether codes in use for other services
(such as *57-Call Trace) could be used, the benefits and challenges of
sharing codes and/or selecting a new code and effective alternatives to
the use of vertical service codes. The PTSC (and subsequently Joint IP-
NNI Task Force) reviewed contributions on the use of VSC and agreed
with the preference to use alternative methods to report robocalls,
such as using web portals and smartphone apps, rather than using VSC.
ATIS INC has also examined this issue and will address any
numbering related impacts, including the development of and/or revision
of industry guidelines should the use of an existing or new vertical
service code be recommended. INC's initial review of the existing
framework draft identified no unusual numbering-related impacts from
the use of these codes.
2.8. Technical Review on SS7 Feasibility
As noted in the Initial Strike Force Report, ATIS' Technical Report
on Use of the ISUP Screening Indicator for Conveying Caller ID
Authentication Information was completed in October 2016.\12\ This
Technical Report assessed three potential industry solutions for using
the ISUP Screening Indicator to convey Caller ID Authentication
information. The industry Strike Force evaluated these potential
solutions and identified one of the proposed solutions \13\ as the most
viable, in that it would provide the greatest integrity of the Calling
Party Number (CgPN), while being the least impactful to existing
customer expectations with respect to delivery of CgPN.
---------------------------------------------------------------------------
\12\ Initial Strike Force Report, Section 1.10.3. This ATIS
technical report is available from the ATIS Document Center: at:
https://www.atis.org/docstore/product.aspx?id=28295.
\13\ This solution involves the successfully verified signed PAI or
FROM headers, attesting that the device can use the TN, being
interworked into the CgPN with a SI value of ``user provided, verified
and passed,'' but differs from other solutions in that, if the PAI or
FROM headers are not signed, a ``network provided'' number (e.g.,
pseudo number that is unique to each carrier) is populated into the
outgoing ISUP CgPN parameter with an indication of ``network provided''
in the SI field.
---------------------------------------------------------------------------
Based upon the completed work and the input from the Strike Force,
ATIS PTSC has initiated a project to further analyze one of its
recommendations for ISUP screening indicator interworking. This work
has been targeted for completion by the end of 2017.
2.9. Other ATIS Strike Force Work
In addition to the work projects described above, ATIS has also
worked cooperatively with the other stakeholder organizations on Strike
Force matters. ATIS has provided feedback, for example, to the
USTelecom Industry Traceback Group (ITB Group) on Canadian service
provider interest in the group, resulting in a new service provider
participant.
ATIS has provided feedback from ATIS INC to this group noting that
555 numbers may be good candidates for Do Not Originate trials. These
numbers should not be used for any natively legitimate purpose to
originate calls, and thus any originating use would identify the call
as spoofed.
2.10. Conclusion
ATIS notes that the efforts to mitigate robocalling and caller ID
spoofing are complex, with a significant number of interdependencies.
However, ATIS and its members are committed to addressing these issues
with the requisite urgency, including relevant work outside of those
projects identified in the Initial Strike Force Report. ATIS' work is a
careful balance of the need for quick action with the need to develop
implementable, technically-and operationally-effective and sound
mitigation techniques that reflect the consensus of the industry.
3. Empowering Consumer Choice
Consumer choice is critical to effectively managing illegal
robocalls. Many marketing, charitable and other communications are
wanted and lawful, while unscrupulous telemarketers abuse technology
and flout the law. Consumers should be empowered to better control
their communications. Fortunately, mitigation tools are available in
the form of applications that are providing increased options to
consumers. And industry associations are acting as force multipliers
for company efforts and consumer education.
3.1. App Development (ACT)
As the world has quickly embraced mobile technology, the hyper-
competitive app ecosystem continues to produce more innovative and more
efficient solutions that leverage mobile technologies to drive the
global digital economy across modalities and segments, augmenting
consumer interactions and experiences throughout their personal and
work lives.
Service providers, manufacturers, app developers, government, and
consumers all have a role in reducing unwanted robocalls. ACT agrees
that third-party apps can play a critical role in empowering consumers
to control robocalls. As a part of our commitment to stop unwanted
robocalls, ACT, representing the developer community, has worked within
the Strike Force to support the development of more effective apps to
increase consumer control over robocalls. ACT has completed three key
deliverables following the completion of the Strike Force. They are:
A public-facing website that provides technical information
and recommendations for current and potential robocall control
app developers, including technical updates related to changes
to information provided by networks and vendors on call
spoofing or signaling systems that applications can harness.
The website provides app developers information on privacy and
privacy policy best practices. ACT designed this information to
make it easy for app developers to capitalize on the approaches
developed by the Strike Force and to create innovative new
solutions.\14\
---------------------------------------------------------------------------
\14\ http://actonline.org/2017/03/28/robocalls-app-developers/
Targeted outreach to the ACT's members, including more than
5,000 app companies and IT firms from across the mobile economy
to educate members about opportunities to develop robocall
---------------------------------------------------------------------------
control apps.
An online workshop for developers offering both real-time
participation and access to ACT's archives. The workshop will
work to catalyze the creation of new apps by helping developers
quickly get up to speed on the technical and policy
considerations behind robocall control apps.\15\
---------------------------------------------------------------------------
\15\ Id.
ACT is pleased to satisfy its obligations as part of the Strike
Force, and we are proud of the incredible work every member has
contributed in taking meaningful steps to contribute to the mitigation
of unwanted robocalls.
While further innovative apps are in development, apps today are
already playing a major role in mitigating unwanted robocalls (examples
include AT&T Call Protect, Nomorobo, Hiya, PrivacyStar, and many
others), and will continue to do so. We encourage developers,
consumers, and other stakeholders to explore the apps available today;
and to collaborate and develop innovative apps to mitigate unwanted
robocalls.
As discussed in this report, the Robocall Strike Force is examining
the development of a standardized framework for delivering information
from networks to devices with the aim of better empowering consumers to
make informed call handling decisions. Moving forward, ACT will
continue to encourage its members to rely on these important consensus
documents as they find new and innovative ways to provide for consumers
to take control over robocalls.
3.2. Consumer Education Efforts by Strike Force Members
3.2.1. Wireless
The wireless sector has been actively working to address abatement
of illegal robocalling, and promoting consumer awareness of existing
tools.
With release of the Industry Strike Force Report, CTIA convened the
RWG and immediately began work on wireless stakeholder engagement,
working with other trade associations, and committing to and providing
regular updates to the Industry Strike Force. Specifically, since CTIA
convened its RWG:
CTIA has highlighted and facilitated members' efforts to
keep their consumer-facing robocall prevention content current
in collaboration with Industry Strike Force initiatives.
CTIA conducted a survey of its members to learn about spam-
scoring services available in the marketplace today.
CTIA convened six third party vendor presentations to
educate members on innovative robocall mitigation techniques.
CTIA has integrated a robocall mitigation use case into its
ongoing Automated Cyber-Threat Information Sharing (AIS) Pilot
being sponsored by CTIA's Cybersecurity Working Group.
CTIA is working with members on the best ways to display
verified caller ID information graphically on a user's handset.
CTIA' s consumer education efforts have been robust and effective.
CTIA's webpage on Robocall Mitigation provides a comprehensive list of
well over 80 mitigation apps and step-by-step video instructions for
Android, BlackBerry, iOS and Windows devices. Many, if not most, of
these apps are free. Carriers often refer their customers to the CTIA
website to guide consumers to the rich variety of available third-party
apps. Likewise, CTIA and other associations have supported ACT in its
efforts. CTIA has updated its website to contain references to numerous
tools, including apps, as well as important consumer tips. Go to:
http://www.ctia.org/your-wireless-life/consumer-tips/blocking-
robocalls.
In March 2017 alone, CTIA's robocall consumer tip pages
received over 15,000 views
Since November 2016, CTIA's robocall consumer tip pages has
received an average of nearly 10,000 views each month
Several carrier and vendor members of CTIA's RWG have their web
resources on robocall mitigation mirrored on the dedicated FCC Resource
webpage: http://fcc.gov/unwanted-calls. In turn, CTIA uses social media
to heighten public awareness on robocall mitigation. CTIA also
facilitated members' efforts to keep their consumer-facing content
current in collaboration with Industry Strike Force initiatives.
CTIA looks forward to continuing to support the efforts of the
Industry Strike Force and other industry efforts. Attention will be
directed to authentication, empowering consumer choice, and efforts to
automate what are today the largely manual and iterative Traceback and/
or Do Not Originate processes, which are described in detail below.
CTIA considers illegal robocalling to be a potential cyber threat.
So, looking ahead to automation, CTIA has integrated a robocall
mitigation use case into the ongoing Automated Cyber-Threat Information
Sharing (AIS) Pilot sponsored by CTIA's Cybersecurity Working Group.
This pilot seeks to build toward automated examination and sharing of
call detail records associated with suspected robocalls to inform
Traceback and Do Not Originate capabilities.
3.2.2. Wireline
After the initial meeting of the Industry Strike Force at the FCC
on August 19, 2016,\16\ USTelecom worked with its association members
and Strike Force participants to increase consumer awareness on
robocall issues. After the conclusion of the first Strike Force
meeting, USTelecom and CTIA, in coordination with the FCC, published
consumer-centric websites providing them with information on robocall
issues, including consumer tools available to them.\17\
---------------------------------------------------------------------------
\16\ See, Public Notice, FCC to Host First Meeting of Industry-Led
Robocall Strike Force, DA 16-917 (August 12, 2016); see also, FCC
website, First Meeting of Industry-Led Robocall Strike Force (available
at: https://www.fcc.gov/news-events/events/2016/08/first-meeting-
industry-led-robocall-strike-force) (visited March 30, 2017).
\17\ See, USTelecom website, Robocalls (available at: http://
www.ustelecom.org/issues/robocalls) (visited April 22, 2017); see also,
CTIA website, How to Stop Robocalls (available at: http://www.ctia.org/
consumer-tips/robocalls) (visited April 22, 2017).
---------------------------------------------------------------------------
USTelecom's webpage includes a broad variety of consumer-centric
information regarding robocalls, including consumer safety tips and
robocall mitigation tools. The website also includes a link to several
tools available to consumers to block and/or mitigate robocalls on a
range of consumer voice platforms, including traditional TDM networks,
IP networks and wireless services.\18\ A link to USTelecom's website is
also available through the FCC's robocall portal. Several consumer
groups and other organizations also maintain resources on their
respective websites educating consumers about robocall issues.\19\ In
addition, several companies participating in the Industry Strike Force
have also taken steps to educate customers about robocalls, as well as
make mitigation tools available to consumers on their company
websites.\20\
---------------------------------------------------------------------------
\18\ See, USTelecom website, Robocalls (available at: http://
www.ustelecom.org/issues/robocalls) (visited April 25, 2017).
\19\ See e.g., Consumer Reports, Robocall Blocker Review, August 14
(2015) (available at: http://www.consumerreports.org/cro/magazine/2015/
07/robocall-blocker-review/index.htm) (visited April 25, 2017); see
also, AARP website, Robocalls (available at: http://blog.aarp.org/tag/
robocalls/); AARP website, Scam Alert (available at: http://
blog.aarp.org/2014/08/01/how-to-avoid-robocall-scams/) (visited April
25, 2017); FTC website, Consumer Information, Robocalls (available at:
https://www.consumer.ftc.gov/features/feature-0025-robocalls) (visited
April 25, 2017).
\20\ See e.g., AT&T website, Call Blocking options: Nomorobo
(available at: https://www.att.com/esupport/article.html#!/u-verse-
voice/KM1074689) (visited April 25, 2017); CenturyLink website, Ways to
block unwanted calls from your home phone (available at: http://
www.centurylink.com/home/help/products/calling-features/ways-to-block-
unwanted-calls-from-your-home-phone.html) (visited April 25, 2017);
Verizon website, What are robocalls (available at: https://
www.verizon.com/support/consumer/consumer-education/robocalls) (visited
April 25, 2017); Frontier website, Call Block & Priority (available at:
https://frontier.com/helpcenter/categories/phone/calling-features/call-
block-priority-residential) (visited April 25, 2017).
---------------------------------------------------------------------------
There is strong industry support for increased consumer education
about robocalls, to include increasing awareness of the threat, as well
as tools available to consumers. Such an approach can have a tangible
and positive impact on robocall issues, and educational outreach has
been previously identified by the FCC and the Federal Trade Commission
as an essential component to raising awareness of this issue.\21\
Public outreach measures have been successfully implemented by the
Federal government in the past and are ideally suited in the current
context. Whether implemented on a broad public relations scale, or
through targeted multi-industry efforts, such outreach measures ensure
that valuable information is disseminated and shared amongst target
audiences.
---------------------------------------------------------------------------
\21\ See e.g., Public Notice, FCC to Host Consumer Webinar on
Dealing with Robocalls (released February 2, 2017); See e.g., Comments
of FTC Chairman Jon Leibowitz, FTC Robocall Workshop, October 18, 2012
(noting that the FTC ``pride ourselves on the fact that we take a
multi-faceted approach to consumer protection issues that includes
enforcement, education, policy, and advocacy.'' (available at: https://
www.ftc.gov/sites/default/files/documents/public_events/robocalls-all-
rage-ftc-summit/robocallsummittranscript.pdf) (visited April 25, 2017).
See also, FTC website, Phone Scams (available at: https://
www.consumer.ftc.gov/articles/0076-phone-scams) (visited April 25,
2017); FCC website, Unwanted Calls (available at: https://www.fcc.gov/
unwanted-calls) (visited April 25, 2017).
---------------------------------------------------------------------------
3.3. Industry Input from Non-Strike force members
3.3.1. Wireless
CTIA has worked to bring non-members into the discussion and
activity on illegal robocall abatement. CTIA convened numerous meetings
to share technology and solutions. As discussed in the October Strike
Force report, CTIA undertook the task of working with members to
provide robocall mitigation information to customers.
CTIA surveyed its RWG members and learned about spam-scoring
services in the market today. As noted, CTIA then reached out to the
third party vendor community, and facilitated presentations from six
companies to the RWG regarding robocall mitigation opportunities. The
companies below presented:
Cequint: Provides spam scoring, based on real-time network
data analytics to ensure that legitimate enterprise calls to
customers are not placed incorrectly on a blacklist. https://
www.cequint.com/personal/
Hiya: Provides network-based caller ID and spam detection
and protection natively integrated for all clients, and O/S
platform independent. https://hiya
.com/#page-top
iconectiv: Certified Caller ID: Demonstrated the process of
certificate assignment (and revocation) pursuant to STIR/SHAKEN
protocol. http://iconectiv.com/thought-leadership/existing-
robocalling-and-spoofing-mitigation-techniques
Neustar: Smart ID product, which integrates APIs on: CNAM
(to include business logos); subscriber insights; and certified
caller ID. Includes Neustar's Trust Lab, selected by ATIS as
its Robocalling Test Bed. https://www.neustar.biz/
communications/caller-id
Nomorobo: A wireless, network-agnostic application based on
new API capabilities available with the release of iOS 10 and
higher. A nominal subscription-based service, it allows the
download of updated number blacklists to the iPhone. http://
www.nomorobo.com/
PrivacyStar, a First Orion company: Originally app-based,
expanded their in-network deployments which leverage data
analytics and call heuristics to aid in call labeling and
categorization and offer consumers more information to reduce
blocking of ``wanted'' robocalls (pharmacy, school,
enterprise). https://www.privacystar.com/
CTIA and its members are encouraged by the level of communication
about these issues, and look forward to pressing forward on new
solutions and approaches, including those developed by third parties.
In fact, some CTIA members already make services from these third party
vendors available to their customers.
3.3.2. Wireline
Since the start of the industry-led Strike Force efforts, USTelecom
has also made significant outreach and inroads to non-Strike Force
members. For example, in January, 2017, USTelecom met with
representatives from Duke Energy, which is leading a coalition of
approximately 90 electric utility organizations called ``Utilities
United Against Scams'' (Utilities Coalition). The Utilities Coalition
was formed last year by Duke Energy to address and combat ongoing fraud
targeted towards electric utility customers through illegal robocalls.
The calls would fraudulently advise consumers that their electricity
services would be cut off, unless payment was immediately submitted.
In January, 2017, USTelecom delivered a presentation to the
coalition regarding the ITB Group \22\ efforts, and USTelecom will also
be attending its first face to face meeting in Fort Worth, Texas in
May. In addition, USTelecom was able to facilitate discussions between
the Utilities Coalition and other industry partners in order to shut
down several toll free numbers that were hosting fraudulent interactive
voice response (IVR) systems that were spoofing legitimate electric
utility companies. Fraudsters were using the spoofed IVR systems to
facilitate communications between targeted consumers and the scammers
(i.e., consumers were led to believe they were contacting legitimate
electric utility companies).
---------------------------------------------------------------------------
\22\ See sections below, ``USTelecom Efforts on Detection,
Assessment, Traceback and Mitigation'' and ``USTelecom Status of
Traceback Initiatives'' for further details on the ITB Working Group.
---------------------------------------------------------------------------
As a result of this coordination, the Utilities Coalition was able
to identify toll free numbers being used in the IVR scams and have them
removed from service. This industry-wide coordination is ongoing, and
the group is working to establish a more streamlined and effective
system for electric utilities to remove these fraudulent IVR numbers
from service on an expedited basis.
In addition to this effort, USTelecom continues its outreach and
coordination with various Federal agencies regarding areas of potential
cooperation. For example, USTelecom staff met with IRS investigators in
September, 2016, to discuss the IRS scam, and additional cooperation
between industry and the agency. As a result of these efforts,
USTelecom staff conducted in-person training for Treasury Department
staff, including Treasury Inspector General for Tax Administration
(TIGTA) personnel on November 9, 2016. The class, ``Telephony 101 and
Robocall Fundamentals'' provided Treasury Department personnel with an
overview of how telecom networks function, the nature of robocalling,
the wide variety of robocall schemes and industry traceback efforts.
These efforts are ongoing, and in addition to the IRS, USTelecom
has coordinated with Health and Human Services and Immigrations and
Customs Enforcement on industry-led efforts to combat robocalls.
Finally, USTelecom has also conducted outreach to various industry
stakeholders engaged on the robocall issue. For example, USTelecom has
met on several occasions with various stakeholders deploying robocall
mitigation tools, including several vendors of telecommunications
services. USTelecom intends to continue this outreach and coordination
in the coming year.
3.4. Network to Device Display
3.4.1. Wireless and other IP-based Networks
The telecommunications industry has been working on the
complexities surrounding on-device displays about illegal robocalling.
To date, industry efforts on Robocall Mitigation have focused on the
transmission of ``verified Caller ID'' using the ``STIR/SHAKEN''
framework where a SIP-based network is available, e.g., a VoLTE network
supporting wireless subscribers. Using this protocol can enable a
carrier to determine if an originating service provider has
authenticated a particular telephone number. Industry has been
considering how verified Caller ID information can and should be
displayed on a user's wireless handset to enable real time decision
making by consumers about incoming calls. Questions include whether
there should be standardization with respect to a minimum set of
display requirements or whether that is best left to the network, OEM
and app communities.
Industry participants are investigating how an OEM or carrier can
graphically display verified caller ID information on the user's
handset. Work on network-to-device display is in early stages and
ongoing. CTIA is working with its carrier, handset and system vendor
members, and standards organizations, on how to best display
information to the consumer about an incoming call. Considerations
include whether minimum set of requirements for network-to-device
display is preferred, versus giving carriers greater flexibility to
pursue innovation in graphical design from the handset, system vendor,
and carrier communities.
3.4.2. Wireline
On the wireline side, substantial innovation is ongoing to address
the display challenges associated with existing customer premises
equipment. For example, for several months Verizon has been trialing,
to millions of its wireline customers, a new service that warns about
potential spam by inserting a warning indication in the Caller Name
field of the home user' phone display that the incoming call may be
spam related. One advantage of this approach is that because it rides
on the CNAM database that carriers use to associate a calling party
name with a particular telephone number, it uses the customer's
existing 15-character display, and it does not require either a VoIP
connection or the transmission of a new SS7 field. This trial is an
implementation of the patented prototype technology that Verizon
presented to strike force members last fall, which Verizon has offered
to share with interested carriers.
3.5. Industry Member Activity
Industry participants and Strike Force members continue to improve
and expand mitigation tools to combat illegal robocalling. Much of this
work cannot be made public because it would provide too much
information to the robocallers but here are some examples of what is
being done. The market is working.
AT&T: Launched AT&T Call Protect in December 2016 as a free
network service. It allows customers with iPhones and HD Voice-
enabled Android handsets to automatically block suspected
fraudulent calls. It can flag suspected spam calls so the
customer can choose whether to answer or not. And, using the
interface provided by the AT&T Call Protect app, customers can
manually block an unlimited number of specific telephone
numbers for 30-day intervals. The customer can download the app
via the AT&T website or on their device through the App Store.
Network call data analysis and heuristics that power this
solution are provided by Hiya. In addition, AT&T blocked its
billionth unwanted robocall in cases where its business
contracts allow it to block impermissible traffic using a new
program that detects violators through network data analysis.
Comcast: Comcast offers Nomorobo, a free cloud-based service
that hangs up on or blocks illegal robocaller or telemarketing
calls from calling the intended home telephone number, to its
wireline customers
Sprint: Sprint offers Premium Caller ID service on a
subscription basis. It now includes, for select Android
smartphones, the ability to not only the ability to identify a
higher percentage of nuisance calls, but also an option to
block them. This solution directly leverages data and network
intelligence powered by a partnership with Cequint, a wholly
owned subsidiary of Transaction Network Services (TNS).
T-Mobile: T-Mobile launched Scam ID in March 2017 as a free,
network-based automatic service that identifies calls from
known phone scammers, across all handset platforms, on
smartphones and feature phones. If a scam call is detected, the
Caller ID will display ``Scam Likely'' on the device, giving
customers the option to answer, or permanently block the
number. Customers that choose to invoke Scam Block, another
free service, will have all calls from known scammers blocked.
These solutions are powered by network call data analysis and
heuristics provided by PrivacyStar, a First Orion company.
Verizon: Verizon has used the CNAM-based solution described
above to warn more than four million wireline Fios Digital
Voice customers about calls identified by Verizon's analytics
engine and its robocall mitigation team, including calls
relating to the well-known IRS impersonation scam. Verizon's
network team also worked with Nomorobo to develop a ``one
click'' solution that simplifies Fios Digital Voice customers'
ability to sign up for that third-party blocking service. And
since November 2016, Verizon Wireless has been trialing a
service that scores all incoming calls to its Caller Name ID
customers, identifying potential spam and calling-out the level
of risk with a ``risk meter.'' The service is powered by
Cequint, a wholly owned subsidiary of Transaction Network
Services (TNS), and is currently available on ten Android
devices. Verizon expects a broader product launch later in
2017.
Apple: Apple introduced CallKit for iOS 10 and higher. API
developers can create a call directory app extension to
identify and block incoming callers by their phone number. This
opens the iPhone ecosystem to an important call control
capability, for devices running iOS 10 and higher, across all
service provider networks. https://developer.apple.com/
reference/callkit
West: In response to the rise of spam calls, West is working
with the various call blocking solution providers to promote
decision support tools for the entities whose numbers have been
compromised.
Google: In late 2016, Google introduced spam protection
functionality on the Google Phone application for Pixel, Nexus,
and Android One devices, which warns users about potential spam
callers and provides users with the choice to block and report
these numbers. (See, e.g., https://support.google.com/
pixelphone/answer/3459196) The user interface and reporting
aspects of Google Phone spam protection have also been made
openly available at no cost to third parties via the Android
Open Source Project (https://source.android.com/). In addition,
there are plans to provide platform APIs in upcoming builds of
Android that would offer new forms of spam solution support for
carriers and manufacturers.
Strike Force members worked with the CFCA in developing
customer education messaging about how consumer can protect
themselves from fraud, including the attached the attached
fraud-related message: https://www.youtube.com/
watch?v=rE53QDNP8Is.
4. Detection, Assessment, Traceback and Mitigation (USTelecom)
In June of 2015, USTelecom formed a Robocall Engineering Working
group. USTelecom invited its carrier members to participate in this
working group with the goal of easing and simplifying the process of
tracing the origins of robocalls, otherwise known as traceback. During
the course of these Robocall Engineering Working Group efforts, the
group noted that the sharing of certain network intelligence and
traceback information among its participants could and did lead to the
successful thwarting and mitigation of unwanted and illegal phone
traffic. A key lesson learned from USTelecom's extensive experience and
leadership in traceback efforts is that with investments in personnel
and IT systems, along with providers' contact information for traceback
and subpoena requests being readily available, voice providers can
establish the systems and processes needed to efficiently process
requests (whether government subpoenas or requests from other carriers)
to identify the source of suspicious traffic traversing their networks.
Unfortunately, while numerous providers have formally joined our
traceback efforts, and many others cooperate in good faith in
tracebacks, there are still upstream carriers who refuse to cooperate,
which prevents carriers from tracing these malicious calling events
back to the origin of the call.
In May of 2016, the Robocall Engineering Working group felt it
would be beneficial for wide-scale industry participation, and to
include service providers from outside of USTelecom's membership in
these robocall mitigation efforts. USTelecom therefore developed a
framework for participation and governance and began to invite numerous
service providers to participate in traceback efforts.
Many service providers accepted the invitation and the terms of the
framework. On June 28, 2016, USTelecom conducted the first Industry
Traceback Working Group (ITB Group) conference call. There are
currently twenty-one members of the ITB Group, which includes
traditional wireline phone companies, wholesale carriers, wireless
providers, and cable companies. The membership also includes foreign
carriers (e.g., Bell Canada), and non-traditional voice providers
(e.g., Google). USTelecom will continue to reach out to industry
stakeholders in an effort to continue expanding membership in the ITB
Group.
The ITB Group conducts biweekly conference calls to discuss
malicious calling events that were observed on the members' respective
networks. Various network actions and mitigation practices are
discussed and shared with the group. Between conference calls, when a
malicious calling event occurs on one or more networks, the ITB Group
is alerted via e-mails that are sent out by the detecting service
provider. The remaining group members conduct network scans, research
and analysis to determine if these events are occurring on their
respective networks. Each ITB Group member explains their observations,
their respective notification actions, network actions, and shares any
traceback information with the rest of the working group.
Subsequent to the October meeting of the Industry Strike Force,
USTelecom and the ITB Group focused its efforts on completing a Do Not
Originate (DNO) \23\ trial in order to assess the feasibility of DNO as
a robocall mitigation tool. During November and December of 2016,
USTelecom staff and individual ITB Group members reached out to
relevant stakeholders to identify potential DNO candidates. This
included outreach to industry trade associations, individual companies,
and government stakeholders. Once suitable candidates for DNO were
identified, a series of trials were conducted during January and
February of 2017.
---------------------------------------------------------------------------
\23\ See section below, ``USTelecom Status of Do Not Originate
Initiatives'' for further details on the DNO.
---------------------------------------------------------------------------
Finally, the ability of carriers to institute a DNO varies by ITB
Group members. Each ITB Group member oversees a diverse range of
network facilities, some of which are more capable of instituting DNOs
in a more seamless manner. In addition, the resources and capabilities
available to each of the ITB Group members also varies, with some
members having fully staffed fraud and network engineering departments
operating on a round-the-clock basis. In addition, implementation of
DNOs by individual ITB Group members was wholly voluntary throughout
this process.
4.1. USTelecom Status of Traceback Initiatives
With the establishment of the ITB Group, efforts were primarily
focused on the mechanics and processes for initiating industry
traceback efforts. Initial efforts of the group were focused on
identifying possible illegal robocall incidents, and threat
intelligence was shared between ITB Group members. This initial
information sharing effort enabled ITB Group members to scale the scope
of suspected robocall incidents, and enabled individual ITB Group
member efforts to institute mitigation measures on their own networks
to address these call incidents.
As the ITB Group grew in membership size, these information sharing
efforts significantly accelerated awareness of such incidents across a
broad range of industry stakeholders. In addition, these initial
efforts facilitated coordination between individual ITB Group members,
who could more easily cooperate on analyzing suspected robocalling
events. Also, efforts have been implemented for faster responses to
traceback requests, by working in conjunction with ATIS to update ATIS'
Service Provider Contact Directory (SPCD).\24\ The SPCD, available upon
request across the industry ecosystem (e.g., service providers,
regulators and enforcement bureaus) to provide contact information for
reporting or passing along trouble reports to interconnecting
companies, has been expanded to include contacts related to traceback
and for subpoena requests. As more providers submit their contact
information for the SPCD, traceback efforts can be investigated in a
more expeditious manner.
---------------------------------------------------------------------------
\24\ See section below, ``Work with enforcement to shorten the
cycle time between identification and action to stop illegal activity''
for further details on the SPCD.
---------------------------------------------------------------------------
In late 2016 (between November and December), USTelecom staff began
exploring enhancements to its initial efforts. These reforms were
instituted to make the ITB Group's traceback process more focused and
more effective in tracing back specific call paths closer to their
point of origin in the network. These reforms included: (1) more
targeted traceback requests; (2) expanded outreach to upstream
carriers; and (3) detailed cataloguing of information collected during
individual tracebacks.
Regarding the first reform, ITB Group members focused on exercising
their ability under Section 222(d) of the Communications Act, which
allows carriers to share CPNI in order to ``protect the rights or
property of the carrier, or to protect users of those services and
other carriers from fraudulent, abusive, or unlawful use of, or
subscription to, such services.'' \25\ The sharing of such information
by telecommunications providers can benefit consumers by enabling
providers to quickly, efficiently and cooperatively identify the true
source of fraudulent, abusive or unlawful calls, including robocalls.
In instances where calls are traced to their point of origin, this
often enables investigating providers to work with the originating
carrier to cease such calls initiated by its customer. Such efforts are
also extremely valuable to law enforcement, since carriers' ability to
trace calls through several networks can substantially assist law
enforcement personnel in subsequent investigations.
---------------------------------------------------------------------------
\25\ 47 USC 222(d)(2).
---------------------------------------------------------------------------
Regarding expanded outreach to upstream carriers, USTelecom
initiated an effort whereby non-ITB Group upstream carriers were
contacted by USTelecom staff. Because any particular call flow can
include both ITB Group members, and non-ITB Group members, it was
essential to reach out to carriers in the latter category to encourage
them to participate in the industry-led effort to identify the source
of illegal robocalls.
Finally, USTelecom instituted a process whereby the association
catalogues certain information relating to traceback efforts by the ITB
Group. The information is retained in a password-protected Microsoft
Access database by USTelecom. Once a traceback effort is initiated by
an ITB Group member, a reference number is assigned for that particular
call incident. This information includes the requesting ITB Group
member, the date of the calling incident, the date the traceback effort
was initiated within the ITB Group, the volume of calls associated with
the calling incident, and the phone number associated with the calling
incident (Traceback Number).
Once this data is entered, ITB Group members are asked to scan
their respective networks for the Traceback Number to see whether it
has transited their respective networks. If this is the case, ITB Group
members report back to USTelecom with a listing of the top 5 or 10
upstream carriers (that may include both ITB Group members, and non-ITB
Group members), as well as associated call volumes (Incident Reports).
The Incident Reports from responding ITB Group members are entered into
a separate table that tracks upstream carriers and call volumes for the
Traceback Number. The general process for this effort is highlighted in
the below diagram.
USTelecom will then select an Incident Report from an ITB Group
member for an active traceback effort. USTelecom staff coordinates
separately with each ITB Group member identified as a source of
upstream traffic to obtain the source of their upstream traffic. In
addition, USTelecom also reaches out to non-ITB Group members,
requesting that the source of their upstream traffic be provided to
USTelecom for further traceback efforts. This process is reflected in
the below diagram.
This process is repeated through each network hop: USTelecom
coordinates with ITB Group members to push back deeper into the network
path; while also reaching out to non-ITB Group members requesting
additional traceback information. The process continues, until such
point that USTelecom can no longer continue to traceback the Incident
Report further into the network path due to the absence of
participating ITB Group members and/or non-responsive non-ITB Group
members. A sample call path scenario is illustrated below.
In January, 2017, the ITB Group initiated its first traceback
effort under the enhanced traceback process. The number at issue
involved an IRS-related scam using a non-toll free number. Between
January 13, 2017, and January 27, 2017, USTelecom staff identified
approximately 70 upstream carriers, and sent approximately forty
separate communications to upstream carriers requesting assistance on
the ITB Group Traceback efforts (several of these upstream carriers
lacked readily available contact information). None of the non-ITB
Group members provided actionable information. However, working with
just the members of the ITB Group, USTelecom was able to trace the call
back through four distinct network hops by the end of the traceback
effort.
Finally, USTelecom recently met with staff from the FCC's
Enforcement Bureau to discuss the traceback efforts of the ITB Group,
and potential handoffs of information collected by the ITB Group during
the traceback process. During this initial meeting, USTelecom staff
provided FCC personnel with an overview of the enhanced traceback
process, discussed areas of potential cooperation, as well as certain
challenges faced by industry in these efforts. USTelecom will continue
to work with its partners in government and law enforcement, in order
to maximize the effectiveness of industry-led efforts.
4.2 USTelecom Status of Do Not Originate Initiatives
On October 26, 2016, USTelecom was directed to complete a report on
one component of robocall mitigation efforts known as Do Not Originate
(DNO).\26\ That report was delivered to Strike Force members on March
31, 2017 (DNO Report). The DNO Report provided an overview of the DNO
process, including spoofing challenges associated with this approach,
as well as DNO's application as a highly specialized tool. It also
included a summary of industry efforts on this issue, including the
development of USTelecom's ITB Group, and provided an analysis of three
completed DNO trials, and the findings from those efforts. It finally
discussed lessons learned over the last two months from these DNO
efforts, and provides an analysis on the effectiveness and feasibility
of DNO.
---------------------------------------------------------------------------
\26\ Id., Section 3.2.3, p. 34.
---------------------------------------------------------------------------
This is a process whereby certain telephone numbers are identified
at VoIP gateways or interconnection points, and prevented from
terminating to the end user based upon the originating telephone
number. A measured and tightly controlled process is implemented, and
can be instituted by some or many carriers. Calls from numbers that
have been placed on a DNO list are rejected by the first service
provider in the call path that has implemented DNO based on the
originating telephone number and thus blocked from entering the phone
system. This is no substitute for authentication, but USTelecom's
testing efforts demonstrated that the process can prevent a certain
subset of narrowly defined harmful calls from reaching consumers.
The USTelecom DNO trials demonstrates that applied in a narrow and
tightly controlled manner, this can be an effective deterrent in
mitigating certain types of large and medium scale attacks. It is
important to note that the calls themselves will still route across
networks up until the point that the traffic is handed off to a carrier
that is instituting a block. Because there are potentially multiple
paths for any call to take, the effectiveness of any given effort will
rely on the participation rate of carriers. In other words, the more
carriers that are instituting a block on a given number, the more
effective that particular undertaking will be.
The DNO Report discussed a series of three DNO trials using certain
criteria.\27\ The three completed trials involved efforts involving the
Internal Revenue Service, a toll free directory assistance number, and
the Immigration and Customs Enforcement agency. A complete analysis of
these efforts was provided to the industry-led Strike Force on March
31, 2017.
---------------------------------------------------------------------------
\27\ See e.g., USTelecom Comments, CG Docket No. 02-278, WC Docket
No. 02-278, p. 17 (submitted January 23, 2015) (available at: https://
ecfsapi.fcc.gov/file/60001015988.pdf) (visited April 22, 2017).
---------------------------------------------------------------------------
4.3 The Effectiveness and Feasibility of DNO
Blocking DNO numbers can be an effective tool for addressing
certain types of robocalls (specifically, ones where bad actors spoof
known ``vanity'' numbers to impersonate legitimate callers), when it is
applied in a narrow and targeted manner. As USTelecom has previously
noted, there is no single `silver bullet' to the robocall problem,\28\
and the process of blocking DNO numbers should be viewed as one of a
growing number of tools available to address the robocall problem. In
general, robocalls are best addressed in a holistic manner through
deployment of a wide variety of tools by a broad range of stakeholders.
These stakeholders include consumer groups (e.g., education/awareness,
adoption of consumer-based blocking tools), government entities (e.g.,
enforcement, education, coordination, regulatory protection), standards
organizations (e.g., development of industry standards such as SHAKEN/
STIR), and industry (e.g., Blocking DNO numbers, traceback, robocall
mitigation tools, etc.).
---------------------------------------------------------------------------
\28\ See e.g., USTelecom Comments, CG Docket No. 02-278, WC Docket
No. 02-278, p. 17 (submitted January 23, 2015) (available at: https://
ecfsapi.fcc.gov/file/60001015988.pdf) (visited April 22, 2017).
---------------------------------------------------------------------------
In particular, this process should be paired with robust traceback
efforts in order to ensure that the bad actors whose illegal spoofing
is being partially mitigated by these policies can be investigated
fully and prosecuted if appropriate. As discussed below, the calls that
are candidates for the DNO blocking are often among the most egregious
legal violations of all categories of robocalls.
USTelecom concludes that the DNO trials outlined in this report
were effective due to the efforts being narrowly targeted towards the
specific set of telephone numbers identified and confirmed as inbound-
only. That is no guarantee that they will be similarly effective in the
future, or that they could be successfully scaled without creating
harmful unintended consequences. If DNO blocking procedures were more
widely deployed beyond a narrow set of numbers (i.e., inbound-only
telephone numbers), bad actors could easily and rapidly transition to
randomized and/or legitimate telephone numbers in order to circumvent
DNO blocks. In fact, the widespread deployment of a broader range of
DNO numbers (e.g., unassigned telephone numbers) could have the
perverse effect of quickly nullifying any protections, while also
making robocallers more difficult to identify. This could also increase
instances of both ``false positives'' (i.e., blocking numbers that
should not have been blocked) and ``false negatives'' (i.e., fail to
block numbers that should have been blocked).
Accordingly, due to the nature of the DNO blocking process (i.e.,
outright blocking in the network), its use should currently be limited
to those instances where the number in question (i) is used by bad
actors as part of an impersonation scam, (ii) is confirmed as an
`inbound-only' number using strong vetting procedures that go beyond
merely asking the subscriber or its carrier about the number's use, and
(iii) appropriate authorizations are obtained from the entity to whom
the number is assigned. In addition, the process should also be
deployed in a highly controlled environment. Carriers must carefully
and continually coordinate with the telephone number owner before and
during the entire process, in order to ensure that issues arising from
inadvertent blocking of legitimate calls do not arise. As happened
during one of the trials, legitimate calls will be blocked if any
carrier attempts to implement blocks of purported inbound-only numbers
without fully vetting the subscriber's understanding that the number is
inbound-only.\29\ Such false positives should of course be avoided in
the first instances, and if they do occur they need to be remedied
promptly.
---------------------------------------------------------------------------
\29\ Customers who attest that they never initiate calls with a
particular number often find other parts of their business, or third
parties contracted services, that do. And a carrier that has assigned a
number to a customer cannot conclusively and uniquely tell that
customer that no other carrier originates traffic using that number to
initiate legitimate calls. Outbound services using the telephone number
could be hosted in the cloud or third party providers and carried over
multiple wholesale provider networks. Given the highly dynamic and
competitive call processing and handling ecosystem, which involves a
diversity of business arrangements and call center structures,
simplistic assumptions about a number's appropriateness for DNO are
likely to result in unintended consequences.
---------------------------------------------------------------------------
In the near term, any widely deployed efforts would likely face
significant technical scalability issues, in addition to the policy
risks (e.g., incentivizing more spoofing of legitimate numbers in order
to get around DNO blocks) discussed above. For example, the network
capabilities for all providers operating in today's voice ecosystem
varies widely. In some instances, an individual carrier may even have
disparate network capabilities within their respective networks (e.g.,
portions of the network may be TDM, while other portions may be IP-
based). As a result, as any centralized list of DNO numbers grows, it
may very well exceed the capacity of certain network systems.
In addition, there is currently no centralized method for obtaining
blocking authorizations across the universe of network providers. As a
result, letters of authority (LOAs) from each number's owner must
ideally be sent to each organization seeking to institute a DNO
blocking process, since there is currently no form of `transitive'
authorization. In order to implement DNO blocking process on a broader
scale, some form of universal LOA would need to be developed. In
addition, some form of centralized distribution method for such LOAs
would need to be developed, along with a list management framework.
Regarding this latter point, any such list would need to be continually
monitored and updated as telephone numbers are added to, or removed
from, the list of authorized DNOs, while keeping such information out
of nefarious hands.
Because of the risks of unintended consequences if the blocking
were implemented in an unmeasured way, USTelecom supports the
permissive approach outlined by the Commission in its recent Notice of
Proposed Rulemaking.\30\ This is an appropriate starting point for
considering its applicability to other categories of phone numbers.
Specifically, the Commission's proposal is to permit voice service
providers to block telephone calls in certain, narrow circumstances to
protect subscribers from fraudulent and illegal robocalls. Under the
proposal, the Commission would codify the Consumer and Governmental
Affairs Bureau guidance public notice that providers may block calls
when the subscriber to a particular telephone number requests that
calls originating from that number be blocked.\31\ USTelecom intends to
participate in the Commission's rulemaking proceeding, and it is
anticipated that this current report to the Industry Strike Force will
help to further inform industry's analysis of this proposal.
---------------------------------------------------------------------------
\30\ See e.g., Blocking NPRM, p. 10 (stating that ``it is also
important for the Commission to protect the reliability of the nation's
communications network and to protect consumers from provider-initiated
blocking that harms, rather than helps, consumers. The Commission
therefore must balance competing policy considerations--some favoring
blocking and others disfavoring blocking--to arrive at an effective
solution that maximizes consumer protection and network
reliability.'').
\31\ The Commission also seeks comment on authorizing providers to
block calls from three categories of numbers: invalid numbers, valid
numbers that are not allocated to a voice service provider, and valid
numbers that are allocated but not assigned to a subscriber.
---------------------------------------------------------------------------
4.4. Work with enforcement to shorten the cycle time between
identification and action to stop illegal activity
In October 2016, ATIS completed its work on a process to maintain a
contact list for robocall related subpoenas as noted by the Initial
Strike Force Report. The list is included as part of ATIS' larger
service provider contact directory that allows the industry to identify
contacts for other key issues, including call termination issues. ATIS
maintains this list and has been working to promote the completion of
contact information and its use by the industry. ATIS efforts since the
Initial Strike Force report include efforts to streamline and automate
input processes. This streamlining/automation is expected to be
finalized in April 2017.
The ATIS Service Provider Contact Directory is available
electronically at no charge. However, because this document is intended
only for use only by service provider and enforcement agencies, it is
password protected. More information about this document, including how
to request the password, is available from: http://www.atis.org/
01_committ_forums/NGIIF/contact_directories.asp.
USTelecom also realizes the importance of participation in the ATIS
carrier directory. It will continue to coordinate with all of the ITB
Group members and the association's individual members to ensure that
their updated contact information is added to the list maintained by
ATIS. In addition to direct communication and coordination with its
individual members and members of the ITB Group, USTelecom has also
utilized additional tools to expand awareness of this ATIS effort.
These efforts include articles in the association's weekly newsletter,
as well as blog entries regarding the importance of the ATIS
initiative.
Further, CTIA has ensured that all national carriers have added
their contact information to the ATIS service provider contact
directory to help expedite investigations into the sources of illegal
robocalls.
5. Regulatory Support
During the first sixty days, the Strike Force identified several
regulatory road blocks and asked the Commission for rule clarifications
and, if necessary, rule changes. The Commission addressed those
requests in its NPRM and NOI released on March 23, 2017. Industry
members expect to comment on the proposed rules and the technical and
definitional questions raised by the FCC. Abating illegal robocalls is
a complex undertaking, with potential unintended consequences, so
carriers must have clear guidelines and protections for actions they
may take to facilitate illegal robocall abatement. As new regulatory
issues arise, the industry will continue to work with the Commission to
remove any additional regulatory road blocks.
6. Conclusion
Significant progress has been made over the past six months. But
this is not the end of the industry effort to develop ways to stop
unwanted and illegal calls. The industry is committed to continuing to
develop mitigation tools and techniques until these illegal harassing
calls are stopped.
______
Response to Written Questions Submitted by Hon. Catherine Cortez Masto
to Adrian Abramovich
Question 1. Deterrence--In your statement you said that a major
reason that robocallers do what they do is because the software is
easily accessible and inexpensive. One person can now make millions and
millions of calls with just a computer. You mentioned the need to
regulate the companies that sell autodialers and other software that
makes this practice easy for telemarketers.
Other than looking at these companies, what actions can we take
that would deter people from engaging in illegal robocalls?
Answer. No response to received.
Question 2. Do believe criminal penalties, with possible jail time,
would deter some callers from making robocalls?
Answer. No response received.
Question 3. Size of the Industry--You said in your testimony you
would make a good faith effort to work with the committee with your
knowledge of the telemarketing industry. With regards to that industry,
I am curious about its size. Obviously we see billions of these calls
made but with modern technology one person can initiate an endless
amount of calls.
From your experience, do you have any sense of the quantity of
actors out there?
Answer. No response received.
Question 4. Are there bigger players that are responsible for a
majority of the calls? Or is the industry much larger and diversified?
Answer. No response received.
Question 5. Are people in the industry worried about government
action? Or is there a general sense that the chances of being caught
are very small?
Answer. No response received.
______
Response to Written Question Submitted by Hon. John Thune to
Rosemary Harold
Question. Would a longer statute of limitations improve the
Commission's ability to focus its enforcement efforts against knowing
and willful violators of the TCPA?
Answer. Yes, even a one-year longer statute of limitations for
enforcement of the TCPA would improve the Commission's enforcement
efforts against knowing and willful violators.
______
Response to Written Questions Submitted by Hon. Maria Cantwell to
Rosemary Harold
Question 1. What is the interplay between privacy and robocalls?
How do robocallers get access to our private information in order to
target consumers for robocalls?
Is there any evidence that robocallers share call lists with each
other or on the dark web which has the potential of creating repeat
victims?
Answer. Taking each question in turn:
Interplay between privacy and robocalls: Consumers widely
consider unauthorized robocalls to be intrusive and an invasion
of privacy. When Congress passed the Telephone Consumer
Protection Act (TCPA) in 1991, one of the stated bases for
placing additional restrictions on robocalls was that
``. . . automated telephone calls that deliver an artificial or
prerecorded voice message are more of a nuisance and a greater
invasion of privacy than calls placed by `live' persons. These
automated calls cannot interact with the customer except in
preprogrammed ways, do not allow the caller to feel the
frustration of the called party, fill an answering machine tape
or a voice recording service, and do not disconnect the line
even after the customer hangs up the telephone. For all these
reasons, it is legitimate and consistent with the Constitution
to impose greater restrictions on automated calls than on calls
placed by `live' persons.''
(See S.Rep. No. 102-178, 102d Cong., 1st Sess. (1991) at 4-5.)
How robocallers get access/target consumers: Different
robocallers use different techniques, depending on the goal of
the communication. For example, during his testimony before the
Committee, Adrian Abramovich generally described his intention
to reach certain demographics (married, over the age of 30,
etc.), and explained that he targeted certain area codes in an
attempt to reach consumers fitting the profile. While we make
no assessment about the truthfulness of those statements, we
note that the process Abramovich describes is fairly typical
for target demographic-based telemarketing. Some robocall
telemarketers purchase lists of phone contacts from data
brokers or lead generators. Some robocallers use a scattershot
or broadcast approach, hitting as many phone lines as possible
in as short a time as possible. This type of robocaller tends
to dial phone numbers randomly.
Robocallers sharing lists/dark web: Over the course of our
investigations, we have found indications that similar (or even
identical) robocall scams have been perpetrated by apparently
unrelated persons or entities. These indications suggest that
scammers are trading information in some way.
Question 2. Last year the FCC initiated a proceeding seeking public
comment on ways to authenticate caller ID information to further secure
our telephone networks against illegal robocallers. What is the status
of that proceeding?
Answer. A robust call authentication framework is part of the
Commission's multi-pronged effort to combat the scourge of spoofed
robocalls that American consumers know all too well. In July 2017, the
Commission sought public input on the best way to establish a reliable
system to verify caller ID information and tasked the North American
Numbering Council (NANC) with recommending a governance framework. In
May 2018, Chairman Pai accepted the recommendations of the NANC
regarding the call authentication ecosystem, namely the adoption and
deployment of ``SHAKEN/STIR,'' the set of procedures and protocols
intended to eliminate the use of illegitimate spoofed numbers from the
telephone system. Industry stakeholders have now completed the first
step of this process--formation of the governance authority for
implementing SHAKEN/STIR. The governance authority is a stakeholder
group established to determine the policies by which a carrier and its
calls are considered trusted enough to ``sign'' calls originating on
their networks. Next, a policy administrator will be established to
certify carriers that are authorized to approve a call as legitimate.
Finally, certification authorities will be chosen to provide the
``keys'' that digitally stamp a call as legitimate. Although some
carriers are expected to start signing calls even before this process
is complete, operationalizing this system will help all carriers sign
calls, attesting to their validity from start to finish--and
conversely, making clear which calls are not valid.
The Commission expects this effort to move forward as quickly as
possible to protect consumers. Industry has been making progress, but
success requires sustained investment in this next-generation call
authentication standard. To address this, on November 5, 2018 Chairman
Pai sent letters to the phone industry demanding that voice providers
adopt a robust call authentication system to combat illegal caller ID
spoofing and launch that system no later than next year. In particular,
the Chairman sent letters asking those that have not yet established
concrete plans to protect their customers using the SHAKEN/STIR
framework to do so. Chairman Pai also thanked those companies that have
committed to implement a robust call authentication framework in the
near term.
Question 3. Would it decrease enforcement matters if the FCC adopts
a call authentication system to combat illegal robocalls?
Answer. Caller ID authentication appears to be an important tool to
combat illegal, malicious spoofing. And illegal spoofing makes it
difficult for law enforcement to locate the violators and protect
consumers from unwanted communications. Accordingly, we are hopeful
that, to the extent that caller ID authentication removes the ability
of malicious callers to hide behind falsified information, the
increased risk of detection will cause many fraudsters to cease using
robocalling as a vehicle for their scams.
______
Response to Written Questions Submitted by Hon. Catherine Cortez Masto
to Rosemary Harold
Question 1. Impact on Immigrants--Robocalls, and particularly those
done by illegitimate businesses are obviously a nuisance and can pose a
danger to anyone who receives them. But some populations are
particularly vulnerable, we had a hearing in the Aging committee last
fall on the impact of these calls on seniors. Another population that
can be impacted is immigrants, especially those who have recently
arrived or may be still developing English skills. There is some
reporting suggesting that scammers actively target immigrants.
Can any of you talk about cases where this has happened? A
deliberate targeting of immigrants and non-English speakers?
Answer. Yes. For example, in recent months, the FCC has received
numerous consumer complaints about Chinese-language robocalls from
scammers trying to steal money or personal information by posing as
Chinese consulate employees. According to multiple news reports, random
consumers in areas with large Chinese communities have been targeted.
The FCC issued a public notice warning consumers of the scam (available
in English and Chinese), here: https://www.fcc.gov/chinese-americans-
targeted-consulate-phone-scam.
Question 2. Are there any steps your agency is taking to reach
these populations with educational campaigns?
Answer. Yes, the Commission extends information to immigrant
populations and non-English speakers through the Commission website and
via distribution of tip cards in Spanish, Korean, Tagalog, Vietnamese,
and Chinese. The Commission has provided information on particular
scams targeting immigrants, such as calls from scammers posing as
representatives from:
Charitable organizations collecting donations in the wake of
Hurricanes Harvey, Irma and Maria and most recently Hurricanes
Florence and Michael.
Insurance companies offering additional flood insurance.
The IRS, seeking to collect supposedly overdue taxes.
Chinese embassy representatives asking for personal
information.
Question 3. Deterrence--There was an article in the Washington Post
in January about an FTC action against a robocaller from California who
had made billions of illegal robocalls. He was living in a wealthy
neighborhood and paying $25,000 a month for his house, had a personal
chef, and drove two Mercedes. The FTC brought him in for questioning
and he basically admitted he did it without remorse, he was fined $2.7
million and banned from telemarketing. While it's clear that in the
digital age your agencies need more resources to police this behavior,
it's evident from the article that even when cases are brought fines
are often negotiated down by the perpetrators of these calls and
robocallers have clearly concluded that the financial benefits outweigh
and costs of this behavior.
How does the FCC find individuals to pursue?
Answer. The Commission identifies enforcement targets principally
via consumer complaints filed with the FCC's Consumer & Governmental
Affairs Bureau. The FCC also accepts and may act on referrals from
other governmental agencies, members of the U.S. Congress, state or
local officials, and industry stakeholders. For example, USTelecom
leads the efforts of an Industry Traceback Group, which attempts to
identify the source of illegal robocalls and shares the results of its
efforts with the Commission. To encourage further participation in the
Industry Traceback Group, on November 6, 2018, the Commission's Chief
Technology Officer and I sent letters to voice providers, calling on
them to assist in industry efforts to trace scam robocalls that
originate on or pass through their networks. In addition to complaints
or referrals from third parties, Enforcement Bureau staff may identify
potential violators through independent research (such as media reports
or consumer complaints filed online, among others).
Question 4. If the person is found to engage other criminal
behavior, such as fraud, while making robocalls how does the FCC work
with other law enforcement organizations to bring charges related to
those crimes?
Answer. The FCC coordinates with other law enforcement agencies at
the local, state, federal, and international level. The Commission has
executed Memoranda of Understanding with multiple entities to allow
each entity to share relevant evidence with the other in pursuit of
respective law enforcement goals. We continue to look for ways to
strengthen these relationships and build processes to better and more
quickly communicate with outside agencies that may have an interest in
pursuing criminal charges against identified targets.
Question 5. How does the FCC ascertain what the content of the
calls was and how difficult is it to prove that a person engaged in
fraudulent behavior beyond just making illegal robocalls?
Answer. FCC investigators use multiple techniques to determine the
content of the robocalls, including interviewing robocall victims,
reviewing consumer complaints, and obtaining evidence via the agency's
investigatory subpoena powers (e.g., actual recordings of the call).
Proving fraud in the context of robocalling, as in any other context,
presents challenges.
Question 6. Does the FCC have a sense of the size of the illegal
robocalling industry? How many people or organizations are engaging in
these illegal calls?
Answer. We do not have a precise calculation of the number of
people/organizations who deliberately make unlawful robocalls. Our data
indicate that a relatively small number of entities account for a very
large portion of the total number of unlawful robocalls.
Question 7. On average, how many fines does the agency levy in
recent years?
Answer. From January 1, 2017, through September 30, 2018, the
agency has issued or proposed fines of $242,536,000.00 pursuant to the
Truth in Caller ID Act (TICIDA) and the Telephone Consumer Protection
Act (TCPA). From January 1, 2010 through December 31, 2016, the agency
issued or proposed fines of $3,387,500 under the TICIDA and TCPA.
Question 8. Do you believe that the current fines are a significant
enough deterrent, or do you think that increased levels of fines would
also increase the level of deterrence?
Answer. The current fines under the TCPA and TICIDA are assessed on
a per-call basis, so any robocaller making millions of illegal
robocalls may find itself facing penalties in the hundreds of millions
of dollars. This is a significant deterrent against abuse. A more
limiting factor to enforcement is likely to be the applicable statute
of limitations periods. The statute of limitations is one year for TCPA
violations and two years for TICIDA violations, which may not be enough
time to complete investigations involving complex robocalling cases.
Accordingly, the FCC's enforcement tools might be enhanced if Congress
considered expanding the current statute of limitations for violations
under TCPA and TICIDA.
Question 9. Banking--In 2014 a couple won a lawsuit against Bank of
America for more than $1 million after they were flooded with robotic
collection calls over the course of several years. It is understandable
that banks and other companies want to contact their customers about
issues, but we cannot have financial institutions blatantly ignoring
the law and instituting a policy of annoying their customers with
illegal phone calls.
Can you provide data on how many illegal calls originate from the
financial industry?
Answer. The Commission does not have that data.
Questions 10. Is there evidence of organizations in the financial
industry systematically ignoring existing law?
Answer. We cannot comment on matters that may be under
investigation by the FCC's Enforcement Bureau. We encourage all
aggrieved persons to file complaints on fcc.gov to alert us to illegal
robocalls they have received from any industry segment. We note that in
2016, the Commission's Broadnet Declaratory Ruling held that the TCPA
does not apply to Federal government contractors, including those in
the financial industry. See Rules and Regulations Implementing the
Telephone Consumer Protection Act of 1991, Broadnet Teleservices LLC
Petition for Declaratory Ruling, CG Docket No. 02-278, Declaratory
Ruling, 31 FCC Rcd 7394 (2016). There are two pending petitions for
reconsideration of that decision.
Question 11. A one million dollar cost, as shown in this case, is
not a significant sum for a large bank, are the financial risks great
enough to discourage this behavior?
Answer. As noted above, the fines for large robocalling schemes can
provide a substantial financial deterrent.
Question 12. Educating Seniors--I appreciate the efforts people are
making in the government and private sector to hold competitions and
develop apps. Ultimately, as we well know, seniors are the most
vulnerable to scam calls. We have a lot of seniors moving to Nevada and
a lot of retirement communities in places like Las Vegas, which
received an estimated 26.7 million robocalls in March of this year.
Seniors are harder to reach with some of this new technology that
can be of real assistance in blocking these calls.
Can you provide examples of how your agency is trying to educate
seniors about new technology?
Answer. We have undertaken a major outreach campaign to reach older
Americans and alert them to robocalls scams. In September, the FCC
teamed up with AARP on two tele-townhalls to inform older Americans
about phone scams and what they can do to avoid being victims. We also
work with the American Library Association to furnish libraries
throughout the Nation with FCC Consumer Guides and Tip Cards for all
patrons, many of whom are 65 and over. We use information gathered from
consumer complaints about robocalls to post consumer alerts concerning
current scams such as ``grandparent scams,'' ``Social Security scams,''
``IRS scams,'' and others that target older Americans. We also share
this information with national and local community groups.
Question 13. Is there data available on how educated our seniors on
our robocalls? If so, can you please provide it?
Answer. While we do our best to educate seniors and will continue
our efforts to help them avoid unwanted robocalls, we do not have data
on how well-informed seniors are about robocalls.
______
Response to Written Questions Submitted by Hon. Maria Cantwell to
Lois Greisman
Question 1. What is the interplay between privacy and robocalls?
How do robocallers get access to our private information in order to
target consumers for robocalls?
Is there any evidence that robo callers share call lists with each
other or on the dark web which has the potential of creating repeat
victims?
Answer. Robocalls are not only a mechanism for perpetrating fraud,
they are also an intrusion on consumer privacy. Some robocallers
purchase lists containing consumer information from data brokers to
target specific communities, but in the FTC's experience these data
brokers operate in plain sight on public websites. For example,
telemarketers selling home security systems, solar panels, replacement
windows, and other goods for residential use can legally purchase lists
of new home-buyers. Most of these data brokers, which range from small
businesses to large, publicly traded firms, usually provide this
information to legitimate businesses that responsibly use it for legal
marketing and other purposes.
At the same time, in our experience, some robocallers obtain
information on potential targets through online lead generation, while
others are simply random-dialing numbers throughout the country.
Question 2. What is your budget for robocalls enforcement? Is it
enough?
Answer. The FTC does not have a discrete robocall enforcement
budget. Rather, divisions within the FTC's Bureau of Consumer
Protection, along with our regional offices, bring robocall cases and
engage in outreach and educational initiatives as part of their efforts
to protect consumers from fraud and abusive telemarketing. The costs of
running the FTC's robocall enforcement program are included within the
total request for funding the FTC submits to Congress on an annual
basis. Like any law enforcement challenge, additional resources and
enforcement tools could yield even greater results.
______
Response to Written Questions Submitted by Hon. Tom Udall to
Lois Greisman
Question 1. Most people recognize the fines leveled by the FTC are
a drop in the bucket compared to the injury and harm consumers
experience from bad actors. Does the FTC have the resources to increase
its enforcement activity?
Answer. The FTC has expended significant time and effort to combat
illegal robocalls. The FTC uses every tool at its disposal to tackle
this pernicious consumer protection problem. Like any law enforcement
challenge, additional resources and enforcement tools could yield even
greater results. In order to advance its robocall enforcement program,
the FTC seeks to repeal the common carrier exemption from its
jurisdiction. The exemption impedes investigations, complicates
litigation, and prevents the FTC from challenging common carriers of
telecommunications that violate the TSR.
Question 2. Yesterday, my staff googled ``autodialer.'' One of the
top hits was a video on YouTube from a user showing how to use Excel
and Skype to make hundreds of calls. This is just one of many videos
showing how to buy equipment and call lists from the Internet and spam
people. How can the FTC stop this problem if it is so simple to make
fraudulent calls?
Answer. The FTC is keenly aware of the low barriers to entry and
ease of placing illegal robocalls. This is one reason the FTC believes
that civil law enforcement alone will not completely solve the problem.
The FTC partners with industry to help spur innovative technological
solutions such as call blocking applications, which enable consumers to
limit the calls they wish to receive. The FTC will continue to work
with the FCC and the telecommunications industry to advance call
verification and call labeling protocols that will offer consumers even
more tools to avoid unwanted, fraudulent, or abusive calls.
______
Response to Written Questions Submitted by Hon. Catherine Cortez Masto
to Lois Greisman
Question 1. Impact on Immigrants--Robocalls, and particularly those
done by illegitimate businesses are obviously a nuisance and can pose a
danger to anyone who receives them. But some populations are
particularly vulnerable, we had a hearing in the Aging committee last
fall on the impact of these calls on seniors. Another population that
can be impacted is immigrants, especially those who have recently
arrived or may be still developing English skills. There is some
reporting suggesting that scammers actively target immigrants.
Can any of you talk about cases where this has happened? A
deliberate targeting of immigrants and non-English speakers?
Are there any steps your agency is taking to reach these
populations with educational campaigns?
Answer. The FTC periodically encounters robocall scams that target
foreign language speakers or non-native English speakers. In 2017, the
FTC sued a telemarketing operation that impersonated the government and
used spoofed caller ID numbers to sell English-learning products to
Spanish-speaking consumers. In that case, FTC v. ABC Hispana Inc., et
al., the FTC obtained a court order banning the defendants from all
telemarketing and imposing a $6.3 million judgment.\1\ Most recently,
we learned of Chinese language robocalls purporting to be from the
Chinese Consulate. Some of the robocall messages falsely stated that
consumers needed to pick up a package at the Consulate, while others
falsely stated that consumers needed to pay fees to avoid trouble with
the Chinese government. In response, in April the FTC coordinated with
the Chinese Embassy to publish a consumer notice about these scams in
English and Simplified Chinese.\2\
---------------------------------------------------------------------------
\1\ The FTC's pleadings and press releases are available here:
https://www.ftc.gov/enforcement/cases-proceedings/152-3108/abc-hispana-
inc-et-al.
\2\ A copy of the FTC consumer warning is available here: https://
www.consumer.ftc.gov/blog/2018/04/scammers-impersonate-chinese-
consulate. The publication of this alert, both on the FTC and Chinese
Consulate websites, was followed by a series of media interviews by FTC
staff.
---------------------------------------------------------------------------
In addition, as part of its longstanding Every Community
initiative, the FTC engages in frequent consumer education to
immigrants and non-native English speakers. For example, to date the
FTC has held a series of 22 Ethnic Media Roundtables around the
country, bringing together the FTC, state attorneys general offices,
local agencies and law enforcement, community-based organizations, and
ethnic media to discuss how scams affect diverse local communities.
Also, as part of this initiative, the FTC does targeted outreach to
legal services providers, teachers of English as a second language,
librarians, and other local community members who can help us amplify
our consumer protection messages.
The FTC also educates consumers about avoiding scams targeting
immigrants in English, Spanish, Arabic, Chinese, Creole, Korean,
Russian, and Vietnamese at FTC.gov/immigration. We created a plain
language fraud handbook in English, Spanish, Amharic, Arabic, Dari,
French, and Somali for refugees and recent immigrants at FTC.gov/
refugee. And we offer the top ten things to do to avoid fraud in
English, Spanish, Arabic, Chinese, Korean, Russian, Tagalog, and
Vietnamese. Our community partners can order large quantities of these
resources for free at FTC.gov/bulkorder.
Question 2. Deterrence--There was an article in the Washington Post
in January about an FTC action against a robocaller from California who
had made billions of illegal robocalls. He was living in a wealthy
neighborhood and paying $25,000 a month for his house, had a personal
chef, and drove two Mercedes. The FTC brought him in for questioning
and he basically admitted he did it without remorse, he was fined $2.7
million and banned from telemarketing. While it's clear that in the
digital age your agencies need more resources to police this behavior,
it's evident from the article that even when cases are brought fines
are often negotiated down by the perpetrators of these calls and
robocallers have clearly concluded that the financial benefits outweigh
and costs of this behavior. How does the FTC find individuals to
pursue?
Answer. The FTC analyzes consumer complaints, reviews evidence
compiled in prior investigations and litigation, and pursues tips from
informants and third parties to identify targets in robocall cases. As
is true of any law enforcement agency, the details of the FTC's process
for initiating specific investigations are generally non-public.
Question 3. If the person is found to engage other criminal
behavior, such as fraud, while making robocalls how does the FTC work
with other law enforcement organizations to bring charges related to
those crimes?
Answer. The FTC has a Criminal Liaison Unit (CLU), which, when
appropriate, coordinates law enforcement initiatives with state and
Federal criminal prosecutors. Through CLU, the FTC has referred
numerous cases to criminal prosecutors. In the first three quarters of
Fiscal Year 2018, criminal prosecutors relied on FTC information and
support to charge twenty-two new defendants and obtain forty-four new
pleas or convictions.
Question 4. How does the FTC ascertain what the content of the
calls was and how difficult is it to prove that a person engaged in
fraudulent behavior beyond just making illegal robocalls?
Answer. In challenging certain types of illegal robocalls, the FTC
has numerous means through which to ascertain the content of the calls
and, accordingly, to challenge that content as deceptive. Such means
include obtaining declarations from consumers who received the
telemarketing pitches, obtaining telemarketing scripts, and
transcribing FTC investigators' undercover recordings of calls by
telemarketers.
Question 5. Does the FTC have a sense of the size of the illegal
robocalling industry? How many people or organizations are engaging in
these illegal calls?
Answer. We have no precise way to measure the size of the illegal
robocalling industry. In its robocall and Do Not Call enforcement
cases, the FTC has sued 454 companies and 367 individuals to date. The
FTC knows these illegal robocalls are supported by several different
types of businesses and service providers:
software companies that provide autodialing software;
VoIP providers that provide the telephone lines to connect
the calls;
data brokers and lead generators that sell lists of
consumers to call;
call centers that field robocalls after consumers press 1 to
speak with a live operator;
caller ID resellers that license ``local area code''
telephone numbers that telemarketers use to entice consumers to
answer the phone;
sellers of goods and services who reap the financial
benefits of blasting out low-cost robocalls to reach a wide
audience; and
fraudsters who rely on robocalls as a low cost way to reach
potential victims
To the extent the Commission has jurisdiction, it targets parties
in these industries that assist and facilitate illegal robocalling. In
this regard, we observe that the common carrier exemption to the
Commission's jurisdiction impedes investigations, complicates
litigation, and prevents the FTC from challenging common carriers of
telecommunications that violate the TSR.
Question 6. On average, how many fines does the agency levy in
recent years?
Answer. The FTC does not have authority to levy fines. Rather, to
enforce the robocall and Do Not Call provisions of the Telemarketing
Sales Rule (TSR), the FTC litigates in Federal court to obtain
disgorgement of ill-gotten profits, consumer redress, and injunctive
relief. The FTC can also refer enforcement of TSR violations to the
Department of Justice (``DOJ'') to obtain civil penalties; the DOJ can
refer the matter back to the FTC to litigate. To date, the FTC has
brought 138 Do Not Call and robocall cases against 454 corporate
entities and 367 individuals, resulting in actual collections of more
than $121 million. The $121 million in collections includes $71 million
in equitable monetary relief (disgorgement/redress) and $50 million in
civil penalties. This does not include the $280 million civil penalty
trial verdict against Dish Network (litigated by DOJ on the FTC's
behalf), which is now on appeal to the Seventh Circuit Court of
Appeals.\3\ Since January 2017, the FTC has brought ten cases alleging
violations of the TSR's robocall or Do Not Call rules, seeking civil
penalties and/or equitable monetary relief.
---------------------------------------------------------------------------
\3\ See USA et al., v. Dish Network L.L.C., No. 3:09-cv-03073 (C.D.
Ill.). Pleadings and press releases from the case are available here:
https://www.ftc.gov/enforcement/cases-proceedings/052-3167/dish-
network-llc-united-states-america-federal-trade.
Question 7. Do you believe that the current fines are a significant
enough deterrent, or do you think that increased levels of fines would
also increase the level of deterrence?
Answer. The FTC is authorized to obtain judgments, including a
civil penalty of up to $41,484 per violation of the TSR. As a practical
matter, in our law enforcement experience, defendants very rarely have
sufficient assets to pay a significant civil penalty. As such, we think
it unlikely that increasing the maximum civil penalty would have any
deterrent effect.
Question 8. Banking--In 2014 a couple won a lawsuit against Bank of
America for more than $1 million after they were flooded with robotic
collection calls over the course of several years. It is understandable
that banks and other companies want to contact their customers about
issues, but we cannot have financial institutions blatantly ignoring
the law and instituting a policy of annoying their customers with
illegal phone calls. Can you provide data on how many illegal calls
originate from the financial industry?
Is there evidence of organizations in the financial industry
systematically ignoring existing law?
A one million dollar cost, as shown in this case, is not a
significant sum for a large bank, are the financial risks great enough
to discourage this behavior?
Answer. The FTC does not have data on the volume of illegal calls
from financial institutions or information on the possible scope of
non-compliance with telemarketing rules by such entities. As a general
matter, the FTC does not have jurisdiction over banks and other
financial institutions.\4\ We further observe that while the FTC
enforces the Fair Debt Collection Act, debt collection robocalls are
outside the scope of the FTC's Telemarketing Sales Rule, as such calls
do not seek to sell any good or service. Debt collection robocalls,
however, may be covered under other Federal statutes, such as the
Telephone Consumer Protection Act and the Truth in Caller ID Act, both
enforced by the Federal Communications Commission.
---------------------------------------------------------------------------
\4\ The exemption is explicit in the FTC Act, 15 U.S.C.
Sec. 45(a)(2).
Question 9. Educating Seniors--I appreciate the efforts people are
making in the government and private sector to hold competitions and
develop apps. Ultimately, as we well know, seniors are the most
vulnerable to scam calls. We have a lot of seniors moving to Nevada and
a lot of retirement communities in places like Las Vegas, which
received an estimated 26.7 million robocalls in March of this year.
Seniors are harder to reach with some of this new technology that
can be of real assistance in blocking these calls.
Can you provide examples of how your agency is trying to educate
seniors about new technology?
Is there data available on how educated our seniors on our
robocalls? If so, can you please provide it?
Answer. The FTC has a robust program to educate older adults.
Through Pass It On, the FTC's signature consumer education campaign
directed at active older adults, the agency enlists older adults to
share their experiences with scams and fraud with their peers. This
includes, at FTC.gov/PassItOnImposters, strategies for handling calls
from imposters pretending to be online technical support, the IRS, a
romantic interest, or a family member with an emergency. These efforts
at reaching older adults are complemented by ongoing advice via
consumer alerts (consumer.ftc.gov/blog) on a range of issues, including
robocalls \5\ and online technical support scams,\6\ which affect many
older adults.
---------------------------------------------------------------------------
\5\ Untangling a Robocaller Web (June 5, 2018), at https://
www.consumer.ftc.gov/blog/2018/06/untangling-robocaller-web; That's Not
Your Neighbor Calling (Jan. 31, 2018), at https://www.consumer.ftc.gov/
blog/2018/01/thats-not-your-neighbor-calling.
\6\ Warn Your Friends about Tech Support Scams (July 27, 2018), at
https://www.con
sumer.ftc.gov/blog/2018/07/warn-your-friends-about-tech-support-scams;
No Gift Cards for Tech Support Scams (June 6, 2018), at https://
www.consumer.ftc.gov/blog/2018/06/no-gift-cards-tech-support-scammers.
---------------------------------------------------------------------------
While we are not aware of particular research about older
consumers' level of education regarding robocalls, we know that
robocalls involve a complex set of technological issues that are
challenging for many consumers. We try to address these challenges by
creating an array of educational messages that take many forms,
including handouts, videos, and blog posts. This spring, we also
created FTC.gov/calls, which features three new shareable graphics
telling people how to block unwanted calls on their mobile and home
phones. These graphics provide key information on the various call-
blocking options that are available for different types of phones,
including a landline that uses the Internet (VoIP) or traditional
copper line.
Question 10. Common Carrier Exemption--At a recent panel you called
for getting rid of the common carrier exemption as a way for the FTC to
crack down on robocalls. Can you explain the mechanism by which
repealing this exemption would help the FTC increase enforcement
efforts?
Answer. Robocallers use VoIP lines to make a significant number of
commercial robocalls. Telecommunications carriers typically provide
VoIP lines to telemarketers, and we have observed that many small VoIP
carriers appear to market their services specifically to robocallers.
The common carrier exemption to the FTC jurisdiction likely precludes
the FTC from bringing any law enforcement actions against VoIP
providers, even if they knowingly sell or lease telephone lines to
telemarketers making illegal robocalls.
As such, the common carrier jurisdictional exemption creates a
significant gap in the FTC's robocall enforcement work and impedes the
agency's ability to more effectively protect consumers. For instance,
in FTC v. Christiano, a case the FTC filed on May 31, 2018, the FTC
sued James Christiano and two of his companies for assisting and
facilitating illegal robocalls.\7\ The FTC alleged that the defendants
provided robocallers with autodialing software and servers to host that
software--even while knowing the robocallers were using that software
to place illegal calls. Mr. Christiano owned a third company that
provided the robocallers with VoIP lines. The FTC did not pursue the
VoIP company for its knowing participation in the illegal robocalls due
to the common carrier exemption.
---------------------------------------------------------------------------
\7\ See FTC v. Christiano et al., No. 8:18-cv-00936 (C.D. Cal.).
The complaint and press release from the case are available here:
https://www.ftc.gov/enforcement/cases-proceedings/162-3124/james-
christiano-et-al-netdotsolutions-inc.
---------------------------------------------------------------------------
______
Response to Written Question Submitted by Hon. Maria Cantwell to
Kevin Rupy
Question. What is the interplay between privacy and robocalls? How
do robocallers get access to our private information in order to target
consumers for robocalls?
Is there any evidence that robocallers share call lists with each
other or on the dark web which has the potential of creating repeat
victims?
Answer. Unwanted, unconsented to robocalls can be considered a
nuisance or affront to privacy as they cause unnecessary and
unwarranted interruption and distraction. In the past year, however,
there are a growing number of tools and services that are helping
consumers better manage these calls, thereby providing them with
increased control over their privacy.
Robocallers can gain access to consumers' telephone numbers from a
variety of sources. These include publicly available sources, and so-
called ``lead-lists.'' In addition, illegal robocallers can also
generate telephone numbers randomly or sequentially without regard to
the actual identity of the subscriber.
______
Response to Written Question Submitted by Hon. Richard Blumenthal to
Kevin Rupy
Question. I recently introduced S. 2705, the Repeated Objectionable
Bothering of Consumers on Phones (ROBOCOP) Act to require phone
companies to offer effective tools to block robocalls to consumers at
no extra cost to them. Do you support this legislation?
Answer. USTelecom supports the goal of the ROBOCOP Act. Its member
companies are actively pursuing the development of the technologies
described in the bill under the auspices of the Federal Communications
Commission and an industry-created governance board. In addition,
USTelecom member companies already offer a number of free, effective
tools to block robocalls at no extra cost to their customers.
Given the development of marketplace solutions in this area, a
legislative approach that mandates robocall tools is unnecessary.
Today, a broad range of voice providers, independent application
developers and a growing number of diverse companies are offering
services that can help Americans reduce unknown and potentially
fraudulent calls. While these tools are not a panacea to the robocall
problem, they are an important component that empowers consumers with
the increased ability to better identify and/or block illegal or
unwanted robocalls.
An increasing number of robocall mitigation tools are being
deployed by facilities-based providers themselves. For example, AT&T
has deployed its ``Call Protect'' service, and has partnered with
robocall blocking service ``Hiya.'' Similarly, Verizon's new Spam
Alerts service utilizes TNS's Call Guardian and Neustar's Robocall
Mitigation solution to proactively identify illegal robocalls and other
fraudulent caller activity with more accuracy. Various carriers have
also worked with Nomorobo to facilitate their customers' ability to use
that third-party blocking service, such as Verizon's ``one click''
solution that simplifies customers' ability to sign up for the service.
In addition, in the last year alone the number of scoring and
labelling analytics tools for consumers has exploded. In 2016 there
were over 85 call-blocking applications available across all platforms,
including several offered by carriers to their customers at no charge.
As of today, there are now over 550 applications available, a 495
percent increase in call blocking, labeling, and identifying
applications to fight malicious robocalls. The diversity in tools
across multiple platforms demonstrates industry's commitment to empower
consumers, regardless of the type of network utilized by their chosen
voice service provider. The significant availability in services and
offerings throughout the marketplace is an important component of the
battle against illegal robocalls. Specifically, the diversity in
robocall analytics and tools means that illegal robocallers face a wide
variety of mitigation techniques that makes their countermeasure
efforts less effective--in other words, they must overcome multiple
mitigation techniques, as opposed to a single standard.
______
Response to Written Questions Submitted by Hon. Tom Udall to
Kevin Rupy
Question 1. Your testimony identified products that are available
to telephone customers, even those with ``plain old telephone
service.'' Are there costs associated with these services? Do any of
your member companies offer discounts for certain populations, such as
those who receive basic telephone service through the Lifeline program?
Answer. There are a growing number of tools available to consumers
today that mitigate illegal and/or unwanted robocalls. These tools work
across various platforms and services, including cable, wireless, IP,
and ``plain old telephone service.'' Given the diversity in robocall
scoring and analytics services, as well as the variety of voice
platforms, some of these consumer services are free, while others
include a charge.
For example, Verizon's new Spam Alerts service provides its
wireline customers who have Caller ID--whether they are on copper or
fiber--with enhanced warnings about calls that meet Verizon's spam
criteria by showing the term ``SPAM?'' before a caller's name on the
Caller ID display. By using existing Caller-ID technology, the service
empowers consumers to better decide if they should answer a particular
call. Various carriers have also worked with Nomorobo to facilitate
their customers' ability to use that free, third-party blocking service
by establishing a ``one click'' solution that simplifies customers'
ability to sign up for the service.
Programs such as Lifeline are not directly tailored to provision
robocall mitigation services to consumers. Rather, the program provides
consumers with a pre-determined subsidy that can be utilized for voice
or broadband services. Of course, it is possible that the consumer's
choice for subsidized Lifeline service may include a free robocall
mitigation service. In the alternative, a consumer could choose to
utilize the savings from the Lifeline subsidy to acquire a
subscription-based robocall service.
Question 2. AARP partners with organizations to warn seniors,
especially home-bound men and women, about fraudulent calls--like the
``grandparent'' or IRS scam. Do any of your members work with outside
organizations to help provide information about these scams?
Answer. Education is an important tool in the fight against illegal
robocalls, and several of our members--and other industry
stakeholders--have implemented education efforts to provide information
to consumers on robocall tools and scams. Verizon, for example, has
developed a package of consumer education materials to help consumer-
facing personnel, such as staffers at consumer protection agencies or
in constituent-services offices, effectively counsel consumers about
robocalls. AT&T has developed a website that provides customers with
easy access to consumer information and tips about identifying and
avoiding unwanted calls, as well as alerts on recently identified
scams. AT&T's website also provides links to other important consumer
resources, as well as instructions for reporting various types of fraud
(including telephone call fraud).
In addition to the efforts of individual companies, other
stakeholders are also engaged in consumer education. For example, the
Federal Communications Commission (FCC) and the Federal Trade
Commission (FTC) have correctly focused on raising customer awareness
of their options, including with the successful Stop Illegal Robocalls
Expo in April 2018. The Expo featured technologies, devices and
applications to minimize or eliminate the number of illegal robocalls
consumers receive. It also provided a platform for showcasing
innovative technologies, devices and applications that are available to
consumers to assist in combatting illegal robocalls.
Similarly, several industry and governmental organizations are also
focused on consumer education. For example, CTIA--the Wireless
Association, has published a webpage devoted to increasing awareness of
robocall prevention tools and provides consumers with instructions on
how to stop robocalls. In addition, the Communications Fraud Control
Association (CFCA), maintains a consumer education channel on YouTube
that includes various educational videos, including on robocalls. The
Better Business Bureau Institute has also started publishing an annual
``Scam Tracker'' report that collects reports of scams and fraud and
displays the information in real time on an interactive map that warns
consumers.
Similar educational outreach has been conducted by the FCC and FTC
for some time. For example, the FTC maintains a wide range of
educational materials on its website that provides timely and
informative information to consumers regarding robocall related scams
and information. USTelecom, CTIA and several other industry and
consumer organizations are also members of the FCC's Consumer Advisory
Committee (CAC). One of the first recommendations adopted by the
members of the CAC, focused on ways for the FCC to improve consumer
education efforts, particularly with respect to robocalls.
Question 3. Have your members considered ways to help notify or
enable consumers' complaints about the abusive or fraudulent robocalls?
Answer. Empowering consumers through streamlining the complaint
process is an important component to addressing the robocall issue.
Both the FCC and the FTC provide portals where consumers can file
robocall complaints. In addition, both agencies publish portions of the
complaint data (excluding any personal information), which is then used
by industry stakeholders to assist in their robocall efforts. For
example, analytic companies use the public data to improve their
scoring of illegal robocalls, and USTelecom has used the same data to
match consumer complaints with active traceback investigations.
In order to simplify the FCC's complaint process for consumers, the
FCC's CAC--of which USTelecom is a member--adopted a series of
proposals for the agency's consideration. Among other things, the CAC
encouraged the FCC to simplify the consumer complaint filing process
for unwanted calls by developing a form that allows for information to
be entered about multiple unwanted calls at once, and creating a
separate intake portal for unwanted-call complaints. The FCC
subsequently created the proposed intake portal, and was in the process
of exploring alterations to its portal to allow for multiple calls to
be entered at once.
Question 4. Are your members Customer Service Representatives able
to assist callers that complain about the robocalls?
Answer. Consumer education is a critical component to increasing
consumer protection from illegal robocalls. Many of USTelecom's member
companies are taking active steps to educate consumers. For example,
recognizing that consumer education may be particularly beneficial if
provided at the moment consumers are complaining about robocalls,
Verizon has developed a package of consumer education materials to help
consumer-facing personnel, such as staffers at consumer protection
agencies or in constituent-services offices, so they may effectively
counsel consumers about robocalls. Counselors are encouraged to first
ask questions to elicit the nature of the consumer's service and
facility (e.g., smartphone, wireline VoIP, wireline copper), and then
the talking points have a ``decision tree'' that counselors can follow
to tailor their advice to each customer's particular technology
platform and his or her needs. The package includes different
educational brochures to be mailed or e-mailed to consumers based on
what makes sense for each one.
In addition, AT&T's website provides customers with easy access to
consumer information and tips about identifying and avoiding unwanted
calls. More specifically, AT&T's Cyber Aware Resources page includes
alerts on recently identified scams and provides links to other
important consumer resources, as well as instructions for reporting
various types of fraud (including telephone call fraud). AT&T also
issues consumer alerts when fraud events are identified.
USTelecom and its member companies actively work with other
stakeholders to increase consumer education. For example, in April,
2018, several USTelecom members worked with the FCC and the Federal
Trade Commission to put on a public expo to raise customer awareness of
their options. In addition, as member of the FCC's Consumer Advisory
Committee, USTelecom worked with FCC staff, industry stakeholders and
consumer groups to propose a variety of consumer education initiatives
that the agency has since adopted. For example, in response to a CAC
recommendation asking that the FCC incorporate educational information
into replies to consumer complaints, the agency began linking resources
(including consumer guides) in their response to complaints.
______
Response to Written Questions Submitted by Hon. Catherine Cortez Masto
to Kevin Rupy
Question 1. There was an article in the Washington Post in January
about an FTC action against a robocaller from California who had made
billions of illegal robocalls. He was living in a wealthy neighborhood
and paying $25,000 a month for his house, had a personal chef, and
drove two Mercedes. The FTC brought him in for questioning and he
basically admitted he did it without remorse, he was fined $2.7 million
and banned from telemarketing. While it's clear that in the digital age
your agencies need more resources to police this behavior, it's evident
from the article that even when cases are brought fines are often
negotiated down by the perpetrators of these calls and robocallers have
clearly concluded that the financial benefits outweigh and costs of
this behavior. In your testimony, you emphasized the need for criminal
enforcement to crack down on illegal robocalls, and in questioning, you
said that tools exist to criminally target those who engage in
``hardcore fraud.''
Would U.S. Telecom and its members support an expansion of criminal
penalties for robocalls already illegal under the TCPA, including those
that may not otherwise prosecuted for other criminal statutes like
fraud?
Answer. USTelecom is supportive of criminal enforcement actions
against illegal robocallers, however, we believe that criminalizing
violations under the TCPA is not the correct approach. TCPA violators
are already subject to substantial no-fault, class action litigation
exposure for alleged violations of the statute and the Federal
Communications Commission's (FCC) rules implementing the statute.
Although USTelecom believes that S.3149 (the Do Not Call Act) is
motivated by a sincere desire to address the behaviors of firms and
individuals such as the witness featured at the April 18 Senate
hearing, there is no indication that there is a lack of any Federal
authority to address those behaviors adequately, either by the FCC or
the U.S. Attorney.
For example, last month, the Department of Justice announced that
twenty-one members of a ``massive India-based fraud and money
laundering conspiracy that defrauded thousands of U.S. residents of
hundreds of millions of dollars'' were sentenced to terms of
imprisonment up to 20 years. These individuals were all prosecuted
under various existing criminal statutes. Given that sufficient legal
authorities exist for Federal prosecutors to prosecute egregious
robocallers under the Communications Act, the FTC Act and the Federal
criminal statutes, USTelecom recommends that the U.S. Attorney General
should issue guidance to Federal prosecutors outlining these
authorities and prioritizing Federal law enforcement activities in this
area.
USTelecom stands prepared to work with and assist Federal agencies
in putting these predatory criminals behind bars. Indeed, this criminal
prosecutorial effort--which was given ``significant support'' by both
the FCC and TIGTA--proves that through appropriate collaboration, these
criminal elements can be located, identified, and aggressively
prosecuted. If criminal enforcement agencies join the FCC and the FTC
to conduct robocall fraud investigations, such joint enforcement--
especially if coupled with stronger private sector traceback activity--
could reduce the number of illegal robocalls American consumers
receive.
Question 2. What steps are your members taking to help Federal law
enforcement identify the source of these calls?
Answer. USTelecom, along with several of its member companies,
works closely with Federal law enforcement to identify the source of
illegal robocalls. For the last several years, USTelecom has led the
efforts of the Industry Traceback Group (ITB Group), whose primary
mission is to vigorously protect participating carriers' networks, and
users of their services, from fraudulent, abusive, and/or unlawful
robocalls. With 24 voice provider members from a broad range of
industry (i.e., cable, wireline, wireless, wholesale, etc.), the ITB
Group identifies illegal and fraudulent traffic, and through its
cooperative framework of sharing call detail information, traces these
calls to their origins.
Once the ITB Group has traced a call back through the network as
far as possible, it will share this information with the appropriate
Federal enforcement agencies. In particular, USTelecom will provide
referrals to the enforcement departments of the FCC and/or FTC. In
fact, just this week, the FCC's Enforcement Bureau sent a letter to
USTelecom expressing its ``gratitude for the work of USTelecom and the
USTelecom Industry Traceback Group.'' It also noted that due to the
information obtained from the USTelecom Industry Traceback Group, the
amount of time necessary for the Enforcement Bureau to conduct a
traceback investigation from start to finish has ``shrunk from months
to weeks.''
While current Federal enforcement efforts are laudatory, they are
mostly limited to civil enforcement. As a result, bad actors currently
engaged in criminal robocall activities are--at most--subject only to
civil forfeitures. USTelecom believes there is an acute need for
coordinated, targeted and aggressive criminal enforcement of illegal
robocallers at the Federal level through the use of existing Federal
statutes. Given the felonious nature of their activities, criminal
syndicates engaged in illegal robocalling activity should be
identified, targeted and brought to justice through criminal
enforcement efforts.
USTelecom and its industry partners stand ready to further assist
in these efforts to bring these bad actors to justice. Indeed, the
ultimate goal of USTelecom's Industry Traceback Group is to identify
the source of the worst of these illegal calls, and further enable
aggressive enforcement actions by Federal agencies.
Question 3. Common Carrier Exemption--At a recent panel the FTC has
called for getting rid of the common carrier exemption as a way for the
FTC to crack down on robocalls.
What is the position of USTelecom on the common carrier exemption
as it relates to illegal robocalls?
Answer. USTelecom maintains that the FTC has sufficient authority
to pursue illegal robocallers, and that there is no need to remove the
common carrier exemption. Moreover, in a memorandum of understanding
(MOU) between the FCC and the FTC, both agencies expressly address the
common carrier exemption, and commit to coordinate their respective
jurisdictions. For example, the agencies ``express their belief that
the scope of the common carrier exemption in the FTC Act does not
preclude the FTC from addressing non-common carrier activities engaged
in by common carriers.''
They also agree that enforcement authority exercised by the FTC
should not be viewed as a limitation of the FCC's authority, including
``FCC authority over activities engaged in by common carriers and by
non-common carriers for and in connection with common carrier
services.'' The MOU further notes that no exercise of enforcement
authority by the FCC ``should be taken to be a limitation on authority
otherwise available to the FTC.'' In other words, the common carrier
exemption only preempts the FTC's authority over common carriers in
instances where they engage in common carrier activities. The MOU
underscores that both the FTC and FCC have sufficient authority to
pursue common and non-common carriers in appropriate instances.
Question 4 Why does USTelecom think that this would, or would not
be, an effective means of policing robocalls?
Answer. 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. This in turn has
the potential to create duplicative or conflicting regulatory
requirements, resulting in additional consumer confusion and
frustration. Moreover, USTelecom believes that existing statutory tools
are sufficient for addressing the robocall issue both in terms of civil
and criminal enforcement.
______
Response to Written Question Submitted by Hon. John Thune to
Scott Delacourt
Question. During the hearing, Ms. Saunders testified that ``one big
issue is that if auto dialer is not sufficiently defined broadly, it
won't cover texts. There is no independent language in the TCPA that'll
cover texts unless the auto dialer definition is covered.'' Do you
agree with Ms. Saunder's assessment? Please explain.
Answer. No, I do not agree the above assessment, as it is incorrect
and shows a fundamental misunderstanding of the Telephone Consumer
Protection Act (``TCPA'') and its implementation. Additionally, Ms.
Saunders's assessment does not account for the robust protections that
consumers have to prevent unwanted text messages, nor does the
assessment consider the common and best practices of legitimate U.S.
companies seeking to build positive relationships with consumers.
First, the statement that ``[t]here is no independent language in
the TCPA that'll cover texts unless the auto dialer definition is
covered'' is simply incorrect. The independent language in the statute
that allows the TCPA to cover text messages is ``any call.'' \1\
Specifically, the statute prohibits any person from ``mak[ing] any call
(other than a call made for emergency purposes or made with the prior
express consent of the called party) using any automatic telephone
dialing system or an artificial or prerecorded voice'' to certain
telephone lines and numbers, including wireless numbers.\2\ ``Call'' is
not defined in the statute, and has therefore been interpreted by both
the Federal Communications Commission (``FCC'') and various courts. It
is now well-settled law that the term ``any call'' encompasses text
messages. In 2003, the FCC affirmed that ``any call . . . encompasses
both voice calls and text calls to wireless numbers including, for
example, short message service (SMS) calls.'' \3\ Courts agree that
texts are calls for TCPA purposes, and have held that the FCC's
interpretation of the word ``call'' is entitled to Chevron
deference.\4\ In sum, text messages are covered under the TCPA based on
the statute's ``any call'' language, not its ``ATDS'' language.
---------------------------------------------------------------------------
\1\ 47 U.S.C. Sec. 227(b)(1)(A); see also 47 C.F.R.
Sec. 64.1200(a)(1) (prohibiting ``any telephone call'' initiated using
an ATDS or an artificial or prerecorded voice without consent or an
emergency purpose).
\2\ See 47 U.S.C. Sec. 227(b)(1)(A).
\3\ In the Matter of Rule and Regulations Implementing the
Telephone Consumer Protection Act of 1991, CG Docket No. 02-278, Report
and Order, 18 FCC Rcd. 14014 ( 165) (July 3, 2003) (``2003 TCPA
Order''); see also In the Matter of Rule and Regulations Implementing
the Telephone Consumer Protection Act of 1991, CG Docket No. 02-278,
Report and Order, 27 FCC Rcd. 1830 ( 4) (Feb. 15, 2012) (``2012 TCPA
Order'') (``The Commission has concluded that the prohibition
encompasses both voice and text calls, including short message service
(SMS) calls, if the prerecorded call is made to a telephone number
assigned to such service.'').
\4\ See Satterfield v. Simon & Schuster, Inc., 569 F.3d 946 (9th
Cir. 2009).
---------------------------------------------------------------------------
Second, there is no direct relationship between the definition of
``automatic telephone dialing system'' or ``ATDS'' and the TCPA's
application to text messages. The ATDS definition is key to determining
whether the TCPA's consent restrictions apply to calls to wireless
numbers, among other things. It has nothing to do with whether text
messages--as a broad category of calls--are covered under the TCPA. As
described above, that issue rests on the definition of another term in
the statute: ``any call.'' If the Commission narrows the definition of
ATDS in line with the plain meaning of the statute, text messages will
still be covered.
Third, in addition to being incorrect and reflecting a
misunderstanding of the implementation of the TCPA, Ms. Saunders's
statement ignores a key and robust protection that consumers have
against unwanted telemarketing text messages--the Do Not Call rules.
The TCPA gives consumers the ability to register numbers on the
National Do Not Call Registry to prevent unwanted telemarketing calls.
This protection extends to wireless telephone numbers as well as
wireline numbers.\5\ In addition, consumers may take advantage of the
TCPA's company-specific do-not-call lists to prevent unwanted
telemarketing messages.\6\ The Do Not Call rules are not triggered by
whether a caller uses an ATDS--even manual telemarketing calls must
comply with Do Not Call.\7\ Accordingly, narrowing the definition of
ATDS in line with the plain language of the statute would not affect a
consumer's ability to prevent unwanted telemarketing texts using the Do
Not Call rules.
---------------------------------------------------------------------------
\5\ 2003 TCPA Order at 33 (``We conclude that the national
database should allow for the registration of wireless telephone
numbers, and that such action will better further the objectives of the
TCPA and the Do-Not-Call Act.'').
\6\ See 47 C.F.R. Sec. 64.1200(e).
\7\ See id. Sec. 64.1200(c) (restricting ``any telephone
solicitation[s]''); id. Sec. 64.1200(d) (restricting ``any call[s] for
telemarketing purposes'').
---------------------------------------------------------------------------
Fourth, consumers are also protected against unwanted text messages
by the common and best practices of legitimate U.S. companies.
Independent of the TCPA framework, it is a best practice to include an
option for consumers to opt-out of text messages and to honor such opt-
outs. Not only is this good business--as I testified, U.S. businesses
have no interest in engaging in abusive practices and fear the brand
and customer relationship damage of being cast as an illegal and
abusive robocaller--but it is also enforced by industry itself. For
example, CTIA--The Wireless Association administers the Short Code
Registry program, a common way of sending marketing text messages. As
part of the program, CTIA publishes the Short Code Monitoring Handbook,
which describes best practices for short code programs and ``requires
all short code programs to comply with a basic code of conduct that
promotes the best possible user experience.'' \8\ One key best practice
is that, ``[f]unctioning opt-out mechanisms are crucial for all short
code programs to comply with the CTIA Short Code Compliance Handbook.
Programs must always acknowledge and respect customers' requests to opt
out of short code programs. Short code programs must respond to, at a
minimum, the universal keywords STOP, END, CANCEL, UNSUBSCRIBE, and
QUIT by sending an opt-out message and, if the user is subscribed, by
opting the user out of the program.'' \9\ CTIA audits against this and
other best practices, and failure to comply with the Handbook may
result in suspension from the short code registry.\10\ Accordingly,
even if a non-marketing text message is not covered under the TCPA
because it is not made using an ATDS, industry common and best
practices still value and protect consumer choice.
---------------------------------------------------------------------------
\8\ Short Code Monitoring Handbook, CTIA Short Code Monitoring
Program, Version 1.7, at 3 (March 27, 2017).
\9\ Id. at 4.
\10\ Id. at 14-16.
---------------------------------------------------------------------------
______
Response to Written Questions Submitted by Hon. Maria Cantwell to
Scott Delacourt
Question 1. What is the interplay between privacy and robocalls?
Answer. The TCPA reflects a balance between consumer protection and
the benefits of communications between businesses and consumers. In
enacting the TCPA in 1991, Congress made clear that regulation of
calling must balance consumers' rights to privacy with legitimate
business interests: ``[i]ndividuals' privacy rights, public safety
interests, and commercial freedoms of speech and trade must be balanced
in a way that protects the privacy of individuals and permits
legitimate telemarketing practices.'' \1\ The TCPA does not prohibit
all technologically assisted calling, and does not regulate all calls
by businesses.
---------------------------------------------------------------------------
\1\ Rules and Regulations Implementing the Telephone Consumer
Protection Act of 1991, CG Docket No. 02-278, Report and Order, 27 FCC
Rcd. 1830, 24 (Feb. 15, 2012).
---------------------------------------------------------------------------
The FCC has acknowledged this. For example, in formulating TCPA
rules, the Commission has stated that, ``the rules the Commission
adopts'' aim to ``strike an appropriate balance between maximizing
consumer privacy protections and avoiding imposing undue burdens on
telemarketers.'' \2\ Time and again, the FCC has ``affirm[ed] the vital
consumer protections of the TCPA while at the same time encouraging
pro-consumer uses of modern calling technology.'' \3\ Recently
Commissioner O'Rielly recognized the importance of balancing these
interests, noting that the Commission's actions should ``protect
consumers from unwanted communications while enabling legitimate
businesses to reach individuals that wish to be contacted. That is the
balance that Congress struck when it enacted the [TCPA] in 1991.'' \4\
---------------------------------------------------------------------------
\2\ Rules and Regulations Implementing the Telephone Consumer
Protection Act of 1991, CG Docket No. 02-278, Report and Order, 18 FCC
Rcd. 14014, 1 (July 3, 2003).
\3\ Rules and Regulations Implementing the Telephone Consumer
Protection Act of 1991, CG Docket No. 02-278; Declaratory Ruling and
Order, 30 FCC Rcd. 7961, 2 (July 10, 2015) (``2015 Declaratory Ruling
and Order'').
\4\ Id. at 8084 (Statement of Commissioner Michael O'Rielly
Dissenting in Part and Approving in Part).
---------------------------------------------------------------------------
With the TCPA's passage in 1991, Congress's primary aim was to
alleviate intrusive telemarketing calls--like nuisance calls during
dinner--and junk faxes. As Chairman Pai has said, ``Congress passed the
[TCPA] to crack down on intrusive telemarketers and over-the-phone scam
artists.'' \5\ In the Preamble to the TCPA, Congress cited the
``proliferation of intrusive, nuisance calls to [consumers'] homes from
telemarketers'' as a reason for acting.\6\ According to the Supreme
Court, ``Congress determined that Federal legislation was needed
because telemarketers, by operating interstate, were escaping state-law
prohibitions on intrusive nuisance calls.'' \7\
---------------------------------------------------------------------------
\5\ Id. at 8072 (Dissenting Statement of then-Commissioner Ajit
Pai).
\6\ Telephone Consumer Protection Act of 1991, PL 102-243, 105
Stat. 2394, Sec. 2 (Dec. 20, 1991).
\7\ Mims v. Arrow Financial Services, LLC, 565 U.S. 368, 370 (2012)
(also citing the Preamble of the TCPA) (emphasis added); see also
Emanuel v. Los Angeles Lakers, Inc., 2013 WL 1719035, at *3 (``Courts
``broadly recognize that not every text message or call constitutes an
actionable offense; rather, the TCPA targets and seeks to prevent the
proliferation of intrusive, nuisance calls.'' (internal quotations
omitted)).
Question 2. How do robocallers get access to our private
information in order to target consumers for robocalls?
Answer. As I discussed during my oral testimony, the term
robocallers often encompasses two very different types of callers--the
first being bad actor telemarketers, the second being companies trying
to lawfully contact their consumers for a legitimate business purpose.
The Chamber's knowledge only extends to those in the second category of
callers. There are varied methods for compiling and building customer
and target lists for legitimate communications. The Chamber represents
companies who place calls based on valid consent (either written or
non-written, depending on the context), which can be obtained in
several ways, including through business transactions, customer
inquiries, or written consent.
Question 3. Is there any evidence that robo callers share call
lists with each other or on the dark web which has the potential of
creating repeat victims?
Answer. Chamber members engage in legal calling campaigns. I am not
familiar with how bad actors obtain phone numbers, whether on the Dark
Web or otherwise.
______
Response to Written Questions Submitted by Hon. Catherine Cortez Masto
to Scott Delacourt
Question 1. Calls from Legitimate Businesses--In your testimony,
you said ``The TCPA prohibits making phone calls to wireless telephone
numbers ``using any automatic telephone dialing system'' (``ATDS'')
without the prior express consent of the called party. The Act focuses
on technology, not bad conduct such as harassment or fraud.'' How does
the Chamber think the law could be changed to ensure that robocall
enforcement targets harassment?
Answer. This question rightly inquires how to focus enforcement on
bad actors, not on well-intentioned U.S. businesses that use a new
technology or make a technical error.
Currently, the TCPA is abused by class action plaintiffs' lawyers
to seek from U.S. businesses enormous statutory damages that bear no
relationship to harm. These lawsuits, while profitable for lawyers, do
not benefit class members and do nothing to deter truly bad actors.\8\
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\8\ Unstable Foundation: Our Broken Class Action System and How to
Fix It, U.S. Chamber Institute for Legal Reform, at 15 (October 2017),
https://www.instituteforlegalreform.com/uploads/sites/1/
UnstableFoundation_Web_10242017.pdf (`Critics of the current class
action system point to the absence of any substantial compensation for
class members, the control by plaintiffs' lawyers of the class action
process, and the unchecked conflict of interest between class members
and class counsel. Defenders of the current system argue that these
points should all be disregarded, because class actions supposedly
deter unlawful conduct and provide potential defendants with a powerful
incentive to act lawfully. This deterrence argument may sound good, but
there is a big difference between theory and practice. The reality of
class actions shows that there is no credible basis for a deterrence
justification.'').
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It would be preferable for the law to focus on calls that are
placed with the intent to defraud or otherwise do harm. Rather than
focus on technology (i.e., whether an automated telephone dialing
system (``ATDS'') was used to place the call), Congress could look to
the Truth in Caller ID Act of 2009,\9\ which outlaws ``intentionally
harmful or fraudulent spoofing of caller ID information.'' \10\
Specifically, the Truth in Caller ID Act makes it ``unlawful for any
person within the United States, in connection with any
telecommunications service or IP-enabled voice service, to cause any
caller identification service to knowingly transmit misleading or
inaccurate caller identification information with the intent to
defraud, cause harm, or wrongfully obtain anything of value.'' \11\
Amending the TCPA to include a similar focus on intentionally harmful
or fraudulent actions would more effectively target the behavior that
is likely to harm consumers while protecting the modern communications
that consumers desire.
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\9\ Truth in Caller ID Act of 2009, PL 111-331, 124 Stat. 3571
(Dec. 22, 2010) (codified at 47 U.S.C. Sec. 227(e)).
\10\ Rules and Regulations Implementing the Truth in Caller ID Act
of 2009, WC Docket No. 11-39, Notice of Proposed Rulemaking, 26 FCC
Rcd. 4128 1 (March 9, 2011).
\11\ 47 U.S.C. Sec. 227(e)(1).
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There are several other steps that could move the TCPA in the right
direction to benefit consumers without unduly harming U.S. businesses.
For example, Congress could create robust safe harbors for legitimate
businesses that take reasonable steps to avoid violating the TCPA.
Congress also should remove the private right of action and leave
enforcement to the agencies that have the tools and expertise to attack
the problem in a concerted and consistent fashion.
Question 2. If the perpetrator of calls makes millions of billions
of calls that are non-fraudulent but nonconsensual, how does the
Chamber believe the law should impact those robocallers?
Answer. Your question raises two main concerns: consumer consent to
receive calls and call volumes. Regarding consent, the Chamber believes
that the TCPA is in need of reform. The TCPA--as interpreted by the
FCC--dictates consent requirements based on (1) the technology used to
place the call, (2) the type of number to which a call is delivered,
and (3) the content of a call.\12\ The consent requirement is subject
to change if any one of these three elements changes. For example, if
the caller uses an ATDS or an artificial or prerecorded voice to place
a telemarketing call to wireless number, then the caller must first
obtain written consent from the consumer; if the caller uses an ATDS or
an artificial or prerecorded voice to place a non-telemarketing call to
wireless number, then the consent from the consumer does not need to be
in writing, but still must be obtained expressly from the consumer and
prior to the call being placed. These consent requirements are overly
complicated, and they detract from what should be the real focus of
policymakers: stopping bad actors that purposefully evade the consent
requirement and that call with the intent to defraud. The TCPA should
not--as it does today--expose to ruinous liability well-intentioned
companies that take advantage of modern technology to communicate
quickly and efficiently with consumers.
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\12\ See 47 C.F.R. Sec. 64.1200(a)(1) (imposing one consent
requirement on any call to a wireless number utilizing an ATDS or an
artificial or prerecorded voice); id. Sec. 64.1200(a)(2) (imposing a
different consent requirement on a telemarketing or advertising call to
a wireless number utilizing an ATDS or an artificial or prerecorded
voice); id. Sec. 64.1200(a)(3) (imposing consent requirements on calls
place to residential landlines utilizing an artificial or prerecorded
voice).
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Regarding call volume, I respectfully suggest that this is a red
herring. The mere fact that a caller places a high volume of calls is
not inherently bad, as there are calls that consumers want to receive.
So long as a caller in good faith attempts to comply with the consent
requirements and does not have the intention of defrauding or otherwise
doing harm to consumers, the caller should be able to place as many
calls as it sees fit to communicate lawfully with customers.
Fundamentally, call volume--on its own--is not a relevant metric on
which policymakers should focus. Whether a legitimate company places
one hundred or one million calls with consumer consent, no consumer
harm occurs.
Question 3. Banking--In 2014 a couple won a lawsuit against Bank of
America for more than $1 million after they were flooded with robotic
collection calls over the course of several years. It is understandable
that banks and other companies want to contact their customers about
issues, but we cannot have financial institutions blatantly ignoring
the law and instituting a policy of annoying their customers with
illegal phone calls. Does the Chamber believe that banks, because they
are legitimate businesses, should be able to make collection calls
without user consent?
Answer. Businesses have every incentive to cultivate positive
customer relationships while using modern technology to efficiently
communicate with customers, including about debt collection.
As it happens, debt collection calls are ordinarily made with
consent. As the FCC has recognized, the provision of a phone number in
the context of incurring a debt constitutes consent for the purposes of
the TCPA.\13\ We support the FCC's practices of permitting legitimate
businesses to communicate with their customers regarding repayment of
debts. Importantly, the TCPA is not the only, or even the primary, law
that governs the debt collection process.\14\ Debt collection
activities are heavily regulated at the Federal and state levels. The
Chamber supports its members' compliance with these regulations.
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\13\ Request of ACA International for Clarification and Declaratory
Ruling, CG Docket No. 02-278, Declaratory Ruling, 23 FCC Rcd. 559, 9
(Jan. 4, 2008) (``2008 Declaratory Ruling'') (``We conclude that the
provision of a cell phone number to a creditor, e.g., as part of a
credit application, reasonably evidences prior express consent by the
cell phone subscriber to be contacted at that number regarding the
debt.'').
\14\ See, e.g., Fair Debt Collection Practices Act, 15 U.S.C.
Sec. 1692 et seq.
Question 4. A one million dollar cost, as shown in this case, is
not a significant sum for a large bank, does the Chamber believe this
is significant enough to deter ``harassment?''
Answer. The fundamental problem with the TCPA is its statutory
damages, coupled with its private right of action. TCPA class action
lawsuits have skyrocketed in recent years. As the Chamber recently
explained ``Settlement is where almost all TCPA cases end up if a class
is certified, or if certification seems at all likely, because of the
in terrorem value of classwide claims. In TCPA litigation, every 2,000
calls can equate to $1 million in potential statutory damages, even
before potential `willfulness' damages are considered.'' \15\
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\15\ Id. at 9.
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