Your house, based on neighborhood crime patterns, is a prime target for robbers. The Internal Revenue Service wants to throw you in jail for tax evasion.

The good news? Your prescriptions are ready.

The challenge for dealing with intrusive robocalls, those mass-dialed schemes of aural spam, is finding a way to limit the ubiquitous, illicit scams involving the IRS, car warranties, and alarm systems, while not adding pharmacists, charities, and politicians to the rogue’s gallery of con artists.

With robocalls becoming a daily nuisance, politicians, businesses, and consumer advocates are each doing their part to develop a solution. Doing so, in terms of logistics and legality, is easier said than done. A key challenge: keeping legitimate businesses, big and small, from being ensnared.

A robocall, as typically defined, is any phone call that uses a computerized auto-dialer to deliver pre-recorded messages or to connect a call to a live caller. Some have criminal motives, others have a semi-legitimate service to offer (albeit using sleazy sales tactics), and others are benevolent and informative.

Scammers, over the years, have grown more sophisticated in their efforts to get you to answer the phone. “Neighbor spoofing” is one recent tool that enables incoming calls to trick caller ID systems into thinking incoming calls or texts are coming from a local number. Robocalls have also gone global, with scammers using phone banks in India and other locales.

Nearly 3 billion robocalls were placed nationwide in March 2018 alone, according to the YouMail Robocall Index, which estimates robocalls volumes each month. In 2017, the Federal Trade Commission (which often partners with the Federal Communications Commission in these matters) received more than 4.5 million robocall complaints, an increase of over a million calls from the year before.

In 2017, the FTC received approximately 348,000 “imposter scam” reports, resulting in reported losses of $328 million to imposter scams alone.

The signature piece of legislation to combat the problem, the Telephone Consumer Protection Act (TCPA), was passed by Congress in 1991, at a time when unwanted faxes were the primary annoyance. It targeted “automatic telephone dialing systems,” equipment with the capability and capacity to store mass quantities of phone numbers and dialing them to deliver prerecorded messages without direct, number-by-number manual processes.

The law followed a fairly simple guideline: If an unsolicited call, fax, or text costs the recipient money, those communications should be illegal. Consumers were also afforded the right to opt out of receiving these mass messages.

On July 10, 2015, the FCC issued an anticipated “Omnibus Declaratory Ruling and Order” to resolve 21 petitions related to the enforcement and interpretation of the TCPA.

The FCC opted not to detail a list of what equipment types met the definition of auto-dialer. It chose to, instead, create guidelines for defining them. Among those guidelines: present and potential future capability for automated speed dialing.

Legal issues

Recently, the D.C. Circuit Court of Appeals, in the matter of ACA International v. FCC, struck down portions of the FCC’s Omnibus order, limiting the definition of automatic telephone dialing systems. The Court called the updated description overly broad and “utterly unreasonable.” The ruling also vacated a safe harbor used to protect parties that made just one unwanted call or text to a reassigned number.

“The Court’s ruling is good news for American consumers. For too long, access to critical and time-sensitive financial information, such as low balance notifications, fee avoidance alerts, and due date reminders, has been restricted as a result of the FCC’s disastrous order.”
Richard Hunt, President and CEO, Consumer Bankers Association

Business concerns

The recent ruling was, in part, a reaction to hardships legitimate business say the TCPA has wrought. Name a medium- or large-sized company and odds are good they have either faced scrutiny by the FCC, or been brought into court, over their calling and texting practices.

Companies voicing concerns say they struggle with barely existent safe harbors and very limited exemptions. In addition to post-violation FCC settlements, there is also the costly specter of class-action lawsuits.

The TCPA provides a private right of action that enables consumers to recover up to $500 for each violation and up to $1,500 for each willful violation. Multiply those damages by thousands upon thousands of plaintiffs and the financial exposure can be massive. These lawsuits are so lucrative that there are professional plaintiffs who set up shop with a phone bank and lie in wait for a company to call and violate the law.

Other well-known companies, like Capital One Bank, AT&T, MetLife, Papa John’s Pizza, and Walgreen’s Pharmacy, have faced settlements of over $10 million. Legitimate charities have also faced TCPA lawsuits.

The Trump administration may even have an axe to grind regarding the law. In April 2016, the Trump campaign was sued in two separate TCPA class actions filed in the Northern District of Illinois. The suits claim the campaign sent unwanted text messages to thousands of cell phones users without prior consent. The lawsuits remain pending.

Among those who claim they are caught in the crossfire of robocall crackdowns is the Credit Union National Association.

The FCC’s Omnibus guidance, it says, “further opened the floodgates for litigation against compliance-minded American businesses.” It praised the D.C. Circuit’s opinion in a letter submitted to the House Commerce Committee in advance of robocall-related hearings last week.

 “The Court’s ruling is good news for American consumers,” says Richard Hunt, president and CEO of the Consumer Bankers Association. “For too long, access to critical and time-sensitive financial information, such as low balance notifications, fee avoidance alerts, and due date reminders, has been restricted as a result of the FCC’s disastrous order.”

Congress steps in

Among the efforts afoot to combat robocalls is legislation winding its way through the House and Senate.

SCAMMERS IGNORE DO NOT CALL REGISTRY

Amid the ever-growing nuisance caused by telemarketers, aggrieved parties may be wondering why the government’s Do Not Call Registry doesn’t seem to be helping at all.
The answer is a pretty simple: rogue telemarketers don’t care.
“Odds are, many of them are from scammers—and they don’t care about the Registry,” the Federal Trade Commission wrote in a recent alert.
In 2003, the FTC responded to public frustration with unsolicited sales calls and amended the Telemarketing Sales Rule to create a national Do Not Call Registry. The registry, which includes more than 229 million active telephone numbers, “has been tremendously successful in protecting consumers’ privacy from unwanted calls by the thousands of legitimate telemarketers who subscribe to the registry each year,” says the FTC, which oversees the telemarketing space with the Federal Communications Commission. 
Changes in technology however, “led to a new source of immense frustration—the blasting of prerecorded messages that primarily rely on Voice over Internet Protocol technology,” the FTC added in a recent alert. “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 perpetrators behind many unlawful calls also seek to evade law enforcement by operating overseas, notably massive call centers in India and Peru.
In one recent case, the FTC filed suit against individuals and entities in the United States 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.”
 “Voice over Internet Protocol technology allows callers, including law-breakers, to make higher volumes of calls inexpensively from anywhere in the world,” said Lois Greisman of the FTC’s Bureau of Consumer Protection at a recent hearing before the Senate Commerce Committee. “Technological developments also allow illegal telemarketers to easily fake the caller ID information that accompanies their calls, which allows them to conceal their identity from consumers and law enforcement.”
 In 2017, reports of ‘neighborhood’ caller ID spoofing, where the caller displays a caller ID number with the same area code and exchange as the called party, have also increased, she added. Also, many telemarketers use automated dialing technology to make calls that deliver prerecorded messages, “which allow violators to make very high volumes of illegal calls without significant expense.”
 “The net effect of these technological developments is that individuals and companies who do not care about complying with the Registry or other telemarketing laws are able to make more illegal telemarketing calls cheaply and in a manner that makes it difficult for the FTC and other law enforcement agencies to find them,” Greisman added. “As a result, consumer complaints about illegal calls—especially robocalls—have increased significantly.”
To date, the FTC has brought 134 enforcement actionsagainst companies and telemarketers for Do Not Call, abandoned call, robocall and Registry violations. Thus far, 121 of these FTC enforcement actions have been resolved, and in those cases the agency has recovered over $50 million in civil penalties and $71 million in redress or disgorgement. 
—Joe Mont

Beyond TCPA, legislation leveraged against robocallers include the Telemarketing and Consumer Fraud and Abuse Prevention Act, the Telemarketing Sales Rule, and the Fair Debt Collection Practices Act. Several states also provide additional restrictions on telemarketing calls.

Reacting to the expanding problem, new legislation is afoot in Washington.

Earlier this month, Sen. Brian Schatz (D-Hawaii) introduced the Robocall Enforcement Enhancement Act of 2018, legislation intended to help the FCC prosecute violations of its rules on automated telemarketing calls.

The legislation would lengthen the statute of limitations for the FCC pursuing violations of its robocall rules from one to three years and allow the FCC to pursue cases against robocall rule violations without first issuing a citation.

Sen. Richard Blumenthal (D-Conn.) has enlisted a group of bipartisan legislators to sign onto his Repeated Objectionable Bothering of Consumers on Phones Act in the Senate. Rep. Jackie Speier, (D-Calif.) also introduced a version of the bill, referred to as the ROBOCOP Act, in the House. It would require phone companies to provide customers with free tools for blocking robocalls.

 “This bicameral bill will put an end to the interruptions that have plagued family mealtimes, movie nights, and those big games,” Speier said in a statement. “It will help cut down on the stress and anxiety triggered by constant annoyance. I know, I experienced it firsthand when I was sick with the flu and tormented by ceaseless sales pitches.”

The ROBOCOP Act:

Directs the FCC to require telecom companies to verify that a caller ID is accurate;

provides an exception for consumers with legitimate need for altered caller ID, such as medical offices and domestic violence shelters; and

requires that call-blocking technology does not block public safety entities and calls that the consumer consents to receive.

The bill also gives consumers a private right of legal action against telecom companies that violate this statute.

On April 18, 15 Senators, including Ed Markey (D-Mass.) and Blumenthal, sent a letter to FCC Chairman Ajit Pai requesting that his Commission respond to the D.C. Circuit decision.

The senators urged the FCC to “establish a comprehensive definition of the term auto dialer; ensure that callers using automated dialing equipment to make calls or texts en masse must first obtain affirmative consent from customers; and maintain “aggressive protections” restricting unwanted calls or texts to reassigned numbers.

“Consumers should always have the right to revoke consent, regardless of any contractual clauses that may be included in user agreements,” the senators added.

Technology

Technological advances may be a saving grace for aggrieved phone owners.

The FTC and FCC have initiated a series of contests to encourage developers to create and innovate anti-robocall technology.

In 2013, the FTC offered a $50,000 cash prize for the “best overall solution” to block robocalls at its inaugural Robocall Challenge.

On April 23, the FTC and FCC hosted the “Stop Illegal Robocalls Expo,” where tech companies showcased technologies, devices, and applications for combatting illegal and unwanted calls. 

AT&T and T-Mobile are among the carriers now offering free robocall-blocking tools. Industry-developed protocols, “STIR" and “SHAKEN,” also aim to make consumer call blocking more effective.

Maureen Mahoney, policy analyst for Consumers Union, the advocacy division of Consumer Reports, urged protections against unwanted debt collection calls, at last week’s House Commerce Committee hearing. Congress, she said, should remove the exemption in the TCPA for federal debt collection robocalls.

Scott Delacourt, a partner for law firm Wiley Rein, testified on behalf on the U.S. Chamber of Commerce’s institute for Legal Reform. The ILR is an affiliate of the U.S. Chamber that promotes civil justice reform.

The FCC should adopt a new approach to the TCPA “that protects legitimate business calls and focuses on bad actors,” he said at the hearing. “TCPA class-action litigation has harmed consumers and legitimate businesses while doing little to reduce illegal and abusive robocalling.”

The TCPA “focuses on technology, not bad conduct such as harassment or fraud” and ambiguity over what constitutes an auto-dialer has become a source of “unnecessary and sometimes abusive” class-action litigation,” he added.

“Interpretations by courts and the FCC have strayed far from the statute’s text, Congressional intent, and common sense,” Delacourt said. This has turned the law “into a breeding ground for frivolous lawsuits.” Because the TCPA provides for uncapped statutory damages, defendants in class-action lawsuits face multi-million-dollar judgments.

Among the plaintiff abuses he cited: The Los Angeles Lakers were hit with a class-action lawsuit from fans who received text messages confirming receipt of fan-originated texts used on the scoreboard; and a ride-sharing service was sued for texts confirming receipt of ride requests.

The ILR’s recommendations include capping the amount of individual and class-action damages that can be sought under the TCPA.

Businesses should not be punished via the TCPA lawsuits when they call a 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, the group also suggests.

Topics