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FTC settles with VoIP service provider for TSR violations

Federal Issues FTC Enforcement Telemarketing Sales Rule FTC Act VoIP

Federal Issues

On April 26, the FTC announced the filing of a proposed consent order with a Voice over Internet Protocol (VoIP) service provider, a related company, and the company’s owner (collectively, “defendants”) for allegedly “help[ing] scammers blast millions of illegal robocalls.” In the complaint the FTC claims that the defendants violated Section 5(a) of the FTC Act, the Telemarketing Act, and the TSR by continuing to provide VoIP services to customers despite “knowing or consciously avoiding knowing” the customers were: (i) using the services to place calls to numbers on the FTC’s Do Not Call (DNC) Registry; (ii) delivering prerecorded messages; and (iii) displaying spoofed caller ID services to callers involved in scams related to credit card interest rate reduction, tech support, and the Covid-19 pandemic.

According to the announcement, this is the third such action by the FTC against VoIP service providers during the past two years. Under the terms of the consent order, the defendants are (i) banned from assisting and facilitating abusive telemarketing practices, including the use of VoIP services; (ii) prohibited from further violations of the TSR or assisting others in doing so; (iii) banned from providing services or assigning telephone numbers without employing automated procedures to block calls from unassigned or invalid numbers; and (iv) required to ensure that they do not provide VoIP to suspected telemarketers. The proposed order also provides for a $3 million civil money penalty that is suspended due the company’s inability to pay.