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FTC and FCC warn VoIP service providers about illegal Covid-19 robocalls
On April 3, the FTC and the FCC sent letters to three Voice over Internet Protocol (VoIP) service providers, warning the companies to stop sending spam robocall campaigns promoting Covid-19 related scams. According to the agencies, “routing and transmitting illegal robocalls, including Coronavirus-related scam calls, is illegal and may lead to federal law enforcement.” The agencies sent a separate letter to a telecommunications trade association thanking the group for its assistance in identifying the campaigns and relaying a warning that the FCC will authorize U.S. providers to begin blocking calls from the three companies if they do not comply with the agencies’ request within 48 hours after the release of the letter.
FCC orders phone companies to deploy STIR/SHAKEN framework
On March 31, the FCC adopted new rules that will require phone companies in the U.S. to deploy STIR/SHAKEN caller ID authentication framework by June 30, 2021. As previously covered by InfoBytes, the STIR/SHAKEN framework addresses “unlawful spoofing by confirming that a call actually comes from the number indicated in the Caller ID, or at least that the call entered the US network through a particular voice service provider or gateway.” FCC Chairman Ajit Pai endorsed the value of widespread implementation, stating the framework will “reduce the effectiveness of illegal spoofing, allow law enforcement to identify bad actors more easily, and help phone companies identify—and even block—calls with illegal spoofed caller ID information before those calls reach their subscribers.” The new rules also contain a further notice of proposed rulemaking, which seeks comments on additional efforts to promote caller ID authentication and implement certain sections of the TRACED Act. Among other things, the TRACED Act—signed into law last December (covered by InfoBytes here)—mandated compliance with STIR/SHAKEN for all voice service providers.
FCC ruling provides TCPA exception for emergency Covid-19 communications
On March 20, the FCC issued a declaratory ruling which “confirm[s] that the [Covid-19] pandemic constitutes an ‘emergency’ under the…[(TCPA)].” Accordingly, “hospitals, health care providers, state and local health officials, and other government officials may lawfully communicate information about [Covid-19] as well as mitigation measures without violating federal law.” The “emergency purposes” exception to the TCPA means that these callers “may lawfully make automated calls and send automated text messages to wireless telephone numbers” in order to effectively communicate with the public regarding the “imminent health risk” caused by Covid-19. The content of the communications “must be solely informational, made necessary because of the [Covid-19] outbreak, and directly related to the imminent health or safety risk arising” from the pandemic. Excluded from this emergency exception to the TCPA are debt collection calls, advertising calls, and automated telemarketing calls, which continue to require the prior express consent of the called party.
District court grants summary judgment in favor of bank in TCPA robocall suit
On March 13, the U.S. District Court for the District of New Jersey granted a large bank’s (defendant) motion for summary judgment in a proposed class action alleging that the plaintiff received an unsolicited telemarketing call. The plaintiff—who was himself a TCPA investigator for an attorney—was a long-time customer of the defendant when he answered a robocall from the defendant in March 2005. The plaintiff filed suit against the defendant alleging that the robocall from the defendant violated the TCPA. In response, the defendant filed a motion for summary judgment which put forth three arguments: (i) plaintiff did not have Article III standing to sue because he was not injured by the call; (ii) the plaintiff had an existing business relationship with the defendant as a long-time customer; and (iii) the content of the call did not violate the law at the time of the call.
Here, the court determined that the plaintiff lacked Article III standing to sue the defendant because he did not show an injury-in-fact as a result of the robocall. The court added, “notably, [p]laintiff does not assert, nor has he put forward any evidence to show, that he suffered nuisance, annoyance, inconvenience, wasted time, invasion of privacy, or any other such injury.” Moreover, the court pointed to the plaintiff’s position and asserted that as a TCPA investigator, “he welcomed such calls.” The court additionally held that the plaintiff lacked statutory standing for similar reasons. As a customer of the defendant, the court stated that plaintiff’s claims were subject to the TCPA’s “established business relationship” exemption in effect at the time of the call. The court agreed with the defendant’s argument that the call did not violate the TCPA prohibitions in effect at the time of the call. Further, the court found that the call’s content did not violate FCC regulations at the time for “abandoned telemarketing calls and dual-purpose calls.” As a result, the court dismissed as moot the plaintiff’s motion for class certification and his motion to file a second amended complaint.
Court approves $7 million robocall class action settlement
On January 27, the U.S. District Court for the District of Minnesota, granted final approval of a $7.05 million class action settlement between consumers and a large national retailer for allegedly making robocalls. The lead plaintiff filed a proposed class action suit in 2016 against the retailer claiming that it used an automated dialing system to place collection calls to his cell phone in violation of the TCPA. The suit additionally asserted that some plaintiffs were charged by their cellphone service providers for these collection calls.
According to the settlement approval order, the settlement class includes individuals who received debt collection calls on their cell phones from the retailer between March of 2012 and May of 2018. Additionally, the court determined that, among other things, (i) the notice plan is the best plan practicable and provides sufficient notice to class members; (ii) the settlement is “fair, reasonable, and adequate”; and (iii) the class was adequately represented in the settlement negotiations. The court approved attorneys’ fees and costs of nearly $2 million, and an incentive award of $10,000 to the lead plaintiff, both to be paid out of the funds of the settlement.
After settlement, six remain in FTC robocalling suit
On January 10, the FTC announced that it entered into two settlement agreements: one with a call center and two individuals, and one with an additional individual (together, “the settling defendants”) that it claims made illegal robocalls to consumers as part of a cruise line’s telemarketing operation allegedly aimed at marketing free cruise packages to consumers. According to the two settlements (see here and here), the settling defendants “participated in unfair acts or practices in violation of . . . the FTC Act, and the FTC’s Telemarketing Sales Rule [(TSR)]” by “(a) placing telemarketing calls to consumers that delivered prerecorded messages; (b) placing telemarketing calls to consumers whose telephone numbers were on the National Do Not Call Registry; and (c) transmitting inaccurate caller ID numbers and names with their telemarketing calls.” The defendants are permanently banned from making telemarketing robocalls, and have been levied judgments totaling $7.8 million, all but $2,500 of which has been suspended due to the defendants’ inability to pay.
Also on January 10, the FTC filed a complaint in the U.S. District Court for the Middle District of Florida against the remaining six defendants allegedly involved in the telemarketing operation, for violations of the FTC Act and TSR based on the same actions alleged against the settling defendants.
Trump signs bill to combat robocalls
On December 30, President Trump signed S. 151—the “Telephone Robocall Abuse Criminal Enforcement and Deterrence Act” (TRACED Act, Public Law 116-105)—which, among other things, grants the FCC authority to promulgate rules to combat illegal robocalls and requires voice service providers to develop call authentication technologies. The TRACED Act, Public Law No. 116-105, also directs the FCC to issue regulations to ensure that banks and other callers have effective redress options if their calls are erroneously blocked by call-blocking services.
Highlights of the TRACED Act include:
- STIR/SHAKEN implementation. Within 18 months of enactment, the FCC must require voice service providers to implement “STIR/SHAKEN” caller ID authentication framework protocols at no additional charge to consumers. Providers will be required to adopt call authentication technologies to enable telephone carriers to verify the authenticity of the calling party’s calls. (Previously covered by InfoBytes here.)
- Increased enforcement authority. The FCC will be able to levy civil penalties of up to $10,000 per violation, with additional penalties of as much as $10,000 for intentional violations. The TRACED Act also extends the window for the FCC to take enforcement action against intentional violations to four years.
- FCC requirements. The TRACED Act directs the FCC to (i) initiate a rulemaking to protect subscribers from receiving unwanted calls or texts from callers who use unauthenticated numbers; (ii) initiate a proceeding to protect parties from “one-ring” scams “in which a caller makes a call and allows the call to ring the called party for a short duration, in order to prompt the called party to return the call, thereby subjecting the called party to charges”; (iii) submit annual robocall reports to Congress; and (iv) establish a working group to issue best practices to prevent hospitals from receiving illegal robocalls.
- Agency collaboration. The TRACED Act directs the DOJ and the FTC to convene an interagency working group comprised of relevant federal departments and agencies, such as the Department of Commerce, Department of State, Department of Homeland Security, FTC, and CFPB, which must consult with state attorneys general and other non-federal entities, to identify and report to Congress on recommendations and methods for improving, preventing, and prosecuting robocall violations.
- Criminal prosecutions. The TRACED Act encourages the DOJ to bring more criminal prosecutions against robocallers.
Earlier on December 20, the FCC issued a public notice seeking industry input on current practices for blocking unwanted calls as part of a study required by last June’s declaratory ruling and proposed rulemaking (covered by InfoBytes here; Federal Register notice here). The FCC will use the information collected in an upcoming report on the current state of call blocking efforts. Comments will be accepted until January 29, and reply comments are due on or before February 28.
TRO issued against VoIP service provider in card interest reduction scam
On December 5, the FTC and the Ohio attorney general announced that the U.S. District Court for the Western District of Texas issued a temporary restraining order (TRO) against a VoIP service provider and its foreign counterpart for facilitating (or consciously avoiding knowing of) a “phony” credit card interest rate reduction scheme committed by one of its client companies at the center of a joint FTC/Ohio AG action. As previously covered by InfoBytes, the original complaint alleged that a group of individuals and companies—working in concert and claiming they could reduce interest rates on credit cards—had violated the FTC Act, the Telemarketing Sales Rule, and various Ohio consumer protection laws. In addition to obtaining a TRO against the most recent alleged participants, the FTC and Ohio AG amended their July complaint to add the telecom companies as defendants alleging the companies “played a key role in robocalling consumers to promote a credit card interest reductions scheme.”
California addresses robocall spoofing
On October 2, the California governor signed SB 208, the “Consumer Call Protection Act of 2019,” which requires telecommunications service providers (TSPs) to implement specified technological protocols to verify and authenticate caller identification for calls carried over an internet protocol network. Specifically, the bill requires TSPs to implement “Secure Telephone Identity Revisited (STIR) and Secure Handling of Asserted information using toKENs (SHAKEN) protocols or alternative technology that provides comparable or superior capability by January 1, 2021. The bill also authorizes the California Public Utilities Commission and the Attorney General to enforce certain parts of 47 U.S.C. 227, making it unlawful for any person within the U.S. 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.
As previously covered by InfoBytes, in June 2019, the FCC adopted a Notice of Proposed Rulemaking (NPRM) requiring voice providers to implement the “SHAKEN/STIR” caller ID authentication framework. The FCC argued that once “SHAKEN/STIR” is implemented, it would “reduce the effectiveness of illegal spoofing and allow bad actors to be identified more easily.”
District Court: Debt collector must pay $267 million in robocall damages
On September 9, the U.S. District Court for the Northern District of California entered a final judgment against a debt collection agency that was found guilty of violating the TCPA by making more than 500,000 unsolicited robocalls using autodialers. The court’s final judgment is consistent with the jury’s verdict from last May, which identified four classes of individuals: two involving consumers who received skip-tracing calls or pre-recorded messages, and two involving non-debtor consumers who never had debt collection accounts with the defendant but received calls on their cell phones. In a February 2018 order, the court resolved cross motions for summary judgment, affirming that the dialers used by the defendant to place the calls constituted autodialers within the meaning of the TCPA and that the defendant lacked prior express consent to place the calls. Under the more than $267 million final judgment, class members will each receive $500 per call, with one of the named plaintiffs receiving $7,000 for his individual TCPA claim.