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FTC Drops Hammer On Robocalls

FTC Initiates Action Aimed at Alleged Neighbor-Spoofed Robocalls


Earlier this week, the Federal Trade Commission (FTC) announced that it filed a complaint seeking to stop operations that allegedly facilitated billions of illegal robocalls to consumers nationwide that pitched everything from auto warranties to home security systems and debt-relief services.

According to the FTC, from January 2014 through May 2016, there were approximately 883M average unlawful robocalls per year, 157M of which on average were connected to numbers on the national Do Not Call Registry. From January 2016 through May 2016, the FTC reports, approximately 54M of connected calls utilized spoofed caller ID numbers and generated almost 8,000 consumer complaints to the Commission.

The FTC has charged the defendants with violating the agency’s Telemarketing Sales Rule .

“This case shows that the FTC will keep using every tool it has to fight illegal robocalls,” said Bureau of Consumer Protection Director Andrew Smith. “We will go after not only robocallers, but also companies — like these — who give robocallers the platform and tools to deceive the public and violate the law.”

According to the Commission, the companies operate a computer-based telephone dialing platform that can be used to disseminate large volumes of telephone calls, including robocalls.

The “red flags” for the dialing platform, according to the FTC, include complaints from consumer, telcom providers and the FCC; citations from the FCC for unlawful robocalls; the receipt of numerous subpoenas about unlawful telemarketing calls; the receipt of civil investigative demands (CIDs) from the FTC; and testimony in an FTC investigational hearing followed by continued operations without any meaningful modifications.

The FTC alleges that from June 2013 to May 2016, one of the corporate defendants had one dialing client, an alleged shell company, which accessed the dialing platform and resold it to other telemarketers.

Allegedly, the platform permitted users to make billions of robocalls, including calls to phone numbers on the DNC Registry and calls with fake, or “spoofed,” caller IDs. The FTC also alleges that the “one-stop-shop for illegal telemarketers” allowed telemarketers to place outbound calls in campaigns designed to leave messages in consumers’ voicemail boxes – hanging up on people if they answered the phone.

The complaint alleges that, via the technology, the bundle of services and operation bombarded consumers with more than one billion illegal robocalls annually, including hundreds of thousands of illegal calls. At least 64 million of these calls allegedly used a technique called “neighbor spoofing,” which fakes caller ID and makes it appear that calls are coming from a consumer’s local area.

Charges include: (i) illegal robocalls; (ii) calls to number on the DNC Registry; (iii)  calls with spoofed caller IDs; (iv) abandoned calls; (v) calls with unlawful prerecorded messages; (vi) assisting and facilitating TSR violations by others.

The FTC is seeking a court order permanently stopping the alleged illegal and abusive conduct, and civil penalties.

The FTC is expected to continue to aggressively investigate and take action against illegal telemarketing operations, including those that utilize certain types of autodialing platforms.

Contact FTC defense lawyer Richard Newman at mailto:rnewman@hinchnewman.com to discuss the implementation of preventative telemarketing compliance protocols, or if your company is the subject of an FTC enforcement action or investigation (CID).

Richard B. Newman is a regulatory litigation, investigations and compliance attorney at Hinch Newman LLP focusing on advertising and digital media matters.

ADVERTISING MATERIAL. Informational purposes only. Not legal advice. Always seek the advice of an attorney. Previous case results do not guarantee similar future result. Hinch Newman LLP | 40 Wall St., 35th Floor, New York, NY 10005 | (212) 756-8777.

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About Carol St. Amand

Carol St. Amand

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