[Federal Register Volume 78, Number 245 (Friday, December 20, 2013)]
[Proposed Rules]
[Pages 77024-77026]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-30290]
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FEDERAL TRADE COMMISSION
16 CFR Part 310
RIN 3084-AB19
Telemarketing Sales Rule; Notice of Termination of Caller ID
Rulemaking
AGENCY: Federal Trade Commission (``Commission'' or ``FTC'').
ACTION: Notification.
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SUMMARY: After reviewing the public comments elicited by an Advance
Notice of Proposed Rulemaking (``ANPR'') seeking suggestions on ways to
enhance the effectiveness and enforceability of the caller
identification (``Caller ID'') requirements of the Telemarketing Sales
Rule (``TSR''), as well as technical presentations at the FTC's 2012
Robocall Summit, the Commission has determined that amending the TSR
would not reduce the incidence of the falsification, or ``spoofing,''
of Caller ID information in telemarketing calls. Accordingly, the
Commission is closing this proceeding.
DATES: This action is effective on December 5, 2013.
ADDRESSES: Federal Trade Commission, Office of the Secretary, Room H-
113 (Annex J), 600 Pennsylvania Avenue NW., Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: Craig Tregillus, Attorney, Division of
Marketing Practices, Bureau of Consumer Protection, Federal Trade
Commission, Room H-286, 600 Pennsylvania Ave. NW., Washington, DC
20580, (202) 326-2970.
SUPPLEMENTARY INFORMATION: When the Commission amended the TSR in 2003,
it added a requirement that telemarketers transmit identifying
information to Caller ID services.\1\ Violations of this provision can
lead to civil penalties of up to $16,000 per violation, in the case of
unlawful conduct that has ended, or $16,000 per day, in the case of
ongoing violations.\2\ The Commission explained that it added this
prohibition to (1) promote consumer privacy by enabling consumers to
know who is calling them at home; (2) encourage industry accountability
and help legitimate businesses distinguish themselves from deceptive
ones; and (3) assist law enforcement in identifying TSR violators.\3\
The use of Caller ID information, however, has changed
[[Page 77025]]
since 2003 with the growing availability of technologies that allow
callers to alter or ``spoof'' the number and name that appear on the
recipient's Caller ID display.\4\
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\1\ Telemarketing Sales Rule, Statement of Basis and Purpose and
Final Amended Rule, 68 FR 4580, 4672 (Jan. 29, 2003) (then codified
at 16 CFR 310.4(a)(7), now at 16 CFR 310.4(a)(8)).
\2\ See 15 U.S.C. 45(m)(1)(A); see also Federal Trade Commission
Civil Penalty Adjustments, 74 FR 857 (Jan. 9, 2009). In addition,
the Truth in Caller ID Act of 2009 makes it unlawful ``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'' and
provides criminal penalties and forfeitures for violations. 111
Public Law 331, 124 Stat. 3572, codified at 47 U.S.C. 227(e). The
Federal Communications Commission enforces that statute, and has
issued implementing regulations. See 76 FR 43196, 43203-06 (July 20,
2011). Further, a number of states have enacted anti-spoofing laws.
See Office of the Minnesota Attorney Gen., Comment No. 00053, at 3,
n.7 (citing Minn. Stat. Sec. 325E.312; Fla. Stat. Sec. 817.487;
815 Ill. Comp. Stat. Sec. 517/10; La. Rev. Stat. Ann. Sec.
51:1741.4; Miss. Code Ann. Sec. 77-3-805; Ok. Stat. Ann. Sec.
776.23).
\3\ 68 FR 4627.
\4\ See S. Rept. 96, 111th Cong., 1st Sess. 1-2 (2009); Hearing
before the House Subcomm. on Telecomm. and the Internet, Truth in
Caller ID Act, 110th Cong., 1st Sess. Ser. No. 110-8, 9-10 (2007)
(test. of Kris Monteith); H. Sengar, D. Wijesekera, S. Jojodia,
Authentication and Integrity in Telecommunication Signaling Network,
Proceedings of the 12th IEEE Int'l Conf. and Workshops on the Eng'g
of Computer-Based Systems (2005).
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On December 15, 2010, the Commission issued an ANPR requesting
public comment on whether the TSR should be amended to help effectuate
the objectives of the Rule's Caller ID provisions, including, in
particular, enabling consumers and law enforcement to use Caller ID
information to identify entities responsible for illegal telemarketing
practices.\5\ The Commission received public comments from 51 different
individuals and entities in response to the ANPR.\6\ Of these, 28 came
from consumers, one from a state attorney general,\7\ and the remainder
from a standards organization,\8\ attorneys,\9\ trade associations,\10\
telemarketers,\11\ and telecommunications carriers \12\ and their
service providers.\13\
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\5\ 75 FR 78179 (Dec. 15, 2010).
\6\ The comments are available online at www.ftc.gov/os/comments/tsrcalleridnprm/index.shtm and are identified here by the
commenter's name and the comment number. One comment was blank
(Errickson, No. 00041), one was entered twice (AT&T Servs., Inc.,
Nos. 00040, 00057), and one added an addendum reiterating a prior
comment (Smith, Nos. 00021, 00024).
\7\ Office of the Minn. Atty. Gen., No. 00053.
\8\ Alliance for Telecomm. Indus. Solutions, No. 00048.
\9\ Copilevitz & Canter, LLC, No. 00036; Heyman Law Office, No.
00038.
\10\ E.g., ACA Int'l, No. 00042; American Teleservices Ass'n,
No. 00050; Direct Mktg. Ass'n, No. 00051.
\11\ E.g., InfoCision Mgmt. Corp., No. 00052; MDS Commc'ns, No.
00046; Soundbite Commc'ns, No. 00056.
\12\ AT&T Servs., Inc. No., 00040; NobelBiz, Inc., No. 00043;
Verizon and Verizon Wireless, No. 00044.
\13\ E.g., Bent, 00045; Martino, No. 00022; Omega Servs., LLC,
No. 00054.
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The consumer comments generally favored any TSR revision that would
make Caller ID services more accurate to help in identifying and
halting unwanted telemarketing calls.\14\ The business and trade
association comments largely opposed any modifications,\15\ arguing
that additional restrictions would only burden legitimate businesses,
and do nothing to halt Caller ID spoofing. Both consumer and business
comments noted the harm each has incurred when spoofing has caused
their telephone numbers to appear on consumers' Caller ID displays,
subjecting them to consumer complaints and the loss of business
goodwill.\16\
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\14\ E.g., Bensor, No. 00016; Grout, No. 00034; Herrera, No.
00025; Michael, No. 00017; Smith, 00020. A few consumers advocated
making Caller ID spoofing a criminal offense, which the Commission
lacks the statutory authority to do. E.g., Fox, No. 00027; Messer,
No. 00018; Shields, No. 00029.
\15\ E.g., American Teleservices Ass'n, No. 00050, at 5; AT&T
Servs., Inc., No. 00040, at 3-4; Verizon and Verizon Wireless, No.
00044, at 3-4. Some of the comments supported proposals to give
sellers and telemarketers greater flexibility in choosing what may
appear in Caller ID name displays, such as authorization to use
well-known product names. See, e.g., Teleperformance USA, No. 00037.
These proposals may be raised by commenters in the forthcoming
review of the TSR. See 78 FR 30798, 30799 (May 23, 2013) (noting
intent to undertake scheduled ten-year review of TSR).
\16\ Direct Mktg. Ass'n, No. 00051; Booth, No. 00031; Messer,
No. 00018; Minn. Atty. Gen., No. 00053, at 2; Publishers Clearing
House, No. 00049, at 1; Quicken Loans, No. 00058, at 2.
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None of the comments submitted in response to the ANPR suggested
that any additions or modifications to the TSR could reduce the
incidence of Caller ID spoofing. In fact, as previously indicated,
Caller ID alteration unquestionably violates the prohibition added to
the TSR in 2003 that bars telemarketers from ``failing to transmit . .
. the telephone number and . . . the name of the telemarketer to any
caller identification service in use by a recipient of a telemarketing
call.'' \17\ By definition, a spoofed telephone number is not the
number of the telemarketer, and the Commission can rely on this
prohibition to bring an enforcement action for violation of the TSR
against a telemarketer that uses a spoofed number.
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\17\ See supra note 1.
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Moreover, any modification of the TSR likely would be circumvented
by those intent on falsifying Caller ID information without detection
because there is no apparent technical solution to the problem that is
likely to be implemented in the near term. The comments in response to
the ANPR and in presentations at the FTC's 2012 Robocall Summit \18\
demonstrate that, as one commenter put it, ``it is not technically
feasible, by looking at the signaling data . . . to distinguish between
a CPN [calling party number] that has been manipulated and one that has
not.'' \19\ This is because the telephone network originally was
designed to transmit only basic information, including the CPN and name
used for billing.\20\ Although CPN once sufficed to establish the
identity of a caller, this is no longer the case. With the advent of
such newer technologies as Voice over Internet Protocol (``VoIP'') and
programmable autodialers that allow manipulation (and falsification) of
the CPN, CPN can no longer function to authenticate the source of all
calls.\21\ Thus, until future modifications to the telephone signaling
system provide a more reliable authentication mechanism, prohibitions
in the Caller ID provisions of the TSR can be technically evaded.\22\
Violators using spoofed numbers and names are difficult to track down
and identify, and some are based in foreign countries to further
complicate law enforcement by U.S. authorities.
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\18\ The FTC 2012 Robocall Summit, convened with the goal of
developing solutions to the rapid rise in illegal robocalls,
included an update on the current state of robocall technology, a
discussion of the laws surrounding the use of robocalls, and an
exploration of potential technological solutions to the problem of
illegal robocalls (including panels on caller-ID spoofing and call
authentication technology, data mining and anomaly detection, and
call-blocking technology).
\19\ AT&T Servs., Inc., No. 00040, at 2. Adam Panagia, the
Director of AT&T's Network Fraud Investigation Team made the same
point at the Robocall Summit. See FTC Summit, Robocalls: All the
Rage (Oct. 18, 2012), Tr. at 127, available at http://www.ftc.gov/bcp/workshops/robocalls/docs/RobocallSummitTranscript.pdf.
\20\ See generally, FTC Robocall Summit, Tr. at 12-17 (Steve
Bellovin, FTC Chief Technologist) (recounting the history of the
development of the telephone and signaling systems).
\21\ Id. at 21-26, 121-25 (Henning Schulzrinne, Federal
Communications Commission Chief Technology Officer).
\22\ The record indicates that at least one technical proposal
has been advanced that might be able to solve the authentication
problem, see Bent, No. 00045, but it appears that this or any other
technical solution to Caller ID spoofing will not be available in
the near term and would require modification of the current
signaling system and likely action by the Federal Communications
Commission. See Stopping Fraudulent Robocall Scams: Can More Be
Done? Hearing Before the Subcomm. on Consumer Prot., Prod. Safety,
and Ins. of the S. Comm. on Commerce, Sci. and Transp. (July 10,
2013) at 21, n.74 (Prepared Statement of the Federal Trade
Commission) available at http://ftc.gov/os/testimony/113hearings/130710 robocallstatement.pdf (outlining the technical work to be
done in the ``coming months and years'').
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Notwithstanding the likely persistence of the problem of Caller ID
spoofing, market initiatives are underway to commercialize innovative
new technologies that offer promise for curtailing the number of
unwanted robocalls that consumers receive.\23\ These technologies rely
on call filtering systems to help screen out unwanted robocalls,
including those placed by telemarketers attempting to hide behind
spoofed telephone numbers. The FTC's
[[Page 77026]]
Robocall Challenge was designed to help address unwanted robocalls by
spurring innovation in the marketplace.\24\
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\23\ See, e.g., Herb Weisbaum, Why aren't phone companies doing
more to block robocalls?, NBC News, July 17, 2013, www.nbcnews.com/business/why-arent-phone-companies-doing-more-block-robocalls-6C10641251; www.nomorobo.com (announcing the availability of
Robocall Challenge winner Aaron Foss' free Nomorobo filter as of
September 30, 2013).
\24\ FTC Press Release, FTC Announces Robocall Challenge Winners
(Apr. 2, 2013), available at http://www.ftc.gov/opa/2013/04/robocall.shtm.
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While the Commission has concluded that modification of the
existing Caller ID requirements of the TSR would not serve any useful
purpose at this time, it remains fully committed to combatting illegal
telemarketing and Caller ID spoofing. In addition to the recent
Robocall Challenge and Robocall Summit,\25\ the Commission will
continue to vigorously enforce the TSR, including its prohibition on
spoofing, and the 2009 rule amendments that prohibit the vast majority
of robocalls.\26\ Since the creation of the national Do Not Call
Registry in 2003, the FTC has brought 110 cases alleging Do Not Call
privacy violations against 320 companies and 263 individuals. The 86
cases that have concluded thus far have resulted in orders totaling
over $126 million in civil penalties and $793 million in restitution or
disgorgement. Under the 2009 amendments, the FTC has brought 34
robocall cases against 103 companies and 80 individuals,\27\ including
a number of cases that have alleged TSR Caller ID spoofing
violations.\28\ As technology changes, the Commission will continue to
evaluate if and when amending the TSR to specifically address Caller ID
spoofing would further assist in the Commission's enforcement efforts.
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\25\ See note 18, supra.
\26\ See Telemarketing Sales Rule, Final Rule Amendments, 73 FR
51164 (Aug. 29, 2008). The amendments, codified at 16 CFR
310.4(b)(1)(v), prohibit prerecorded message calls without a
consumer's prior written agreement to receive them, and require that
such messages tell consumers at the outset of the message how to
activate an automated interactive opt-out mechanism that will place
them on the marketer's do-not-call list and terminate the call. The
Federal Communications Commission has since adopted corresponding
requirements that took effect on October 16, 2013. See Telephone
Consumer Protection Action of 1991, Final Rule, 77 FR 34233 (June
11, 2012), Telephone Consumer Protection Act of 1991, Final Rule and
Announcement of Effective Date, 77 FR 63240 (Oct. 16, 2012).
\27\ These cases include five actions against telemarketers that
placed robocalls from ``Rachel'' at ``Card Services.'' FTC v. WV
Univ. Mgmt., LLC, Civ. No. 6:12-1618 (M.D. Fla. filed Oct. 29,
2012); FTC v. A+ Fin. Ctr., LLC, Civ. No. 2:12-14373 (S.D. Fla.
filed Oct. 23, 2012); FTC v. The Greensavers, LLC, Civ. No. 6:12-
1588 (M.D. Fla. filed Oct. 22, 2012); FTC v. Ambrosia Web Design,
LLC, Civ. No. 2:12-2248 (D. Ariz. filed Oct. 22, 2012); FTC v. ELH
Consulting, LLC, Civ. No. 12-2246 (D. Ariz. filed Oct. 22, 2012);
see also Press Release, FTC Leads Joint Law Enforcement Effort
Against Companies That Allegedly Made Deceptive ``Cardholder
Services'' Robocalls (Nov. 1, 2012), available at http://www.ftc.gov/opa/2012/11/robocalls.shtm.
\28\ E.g., FTC v. The Cuban Exchange, Inc., Civ. No. 12-5890
(E.D.N.Y. filed Nov. 28, 2012); FTC v. A+ Fin. Ctr., LLC, Civ. No.
12-1437 (S.D. Fla. filed Oct. 23, 2012); FTC v. Nelson Gamble &
Assocs., Civ. No. SACV12-1504 (C.D. Cal. filed Sept. 10, 2012); U.S.
v. JGRD, Inc., Civ. No. 12-0945 (E.D. Pa. filed Feb. 23, 2012); U.S.
v. Cox, Civ. No. SACV 11-1910, (C.D. Cal. filed Dec. 12, 2011); U.S.
v. Sonkei Commc'ns., Inc., Civ. No. SACV11-1777 (C.D. Cal. filed
Nov. 17, 2011); U.S. v. Feature Films for Families, Inc., Civ. No.
4:11-0019 (N.D. Fla. filed May 5, 2011); U.S. v. The Talbots, Inc.,
Civ. No. 1:10-10698, (D. Mass. filed Apr. 27, 2010).
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2013-30290 Filed 12-19-13; 8:45 am]
BILLING CODE 6750-01-P