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Can You Hear Us Now?

We don’t think there is a person out there who enjoys robo calls. Well, maybe those who are looking to scam people and phone companies who make money off of the calls, but that’s about it. Many of these calls come with “spoofed” called ID’s which means you think you are getting a legitimate call from a business, a neighbor, or even a hospital, but you are not. Phone companies have the technology to block spoofed calls, but most likely because of the revenue, they do not.

However, in a bit of good news, two men, and the companies they represent, are not the subject of huge fine, courtesy of the FCC.

We’ll reprint the entire FCC press release here:

FCC PROPOSES RECORD $225 MILLION FINE FOR MASSIVE SPOOFED ROBOCALL CAMPAIGN SELLING HEALTH INSURANCE

Telemarketer Made Approximately 1 Billion Spoofed Robocalls in Less Than 5 Months to American Consumers Including Those on the Do Not Call List

WASHINGTON, June 9, 2020—The Federal Communications Commission today proposed a $225 million fine against Texas-based health insurance telemarketers for apparently making approximately 1 billion illegally spoofed robocalls. This is the largest proposed fine in the FCC’s 86-year history, reflecting the seriousness of the apparent violations by John C. Spiller and Jakob A. Mears, who used business names including Rising Eagle and JSquared Telecom.

Rising Eagle made approximately 1 billion spoofed robocalls across the country during the first four-and-a-half months of 2019 on behalf of clients that sell short-term, limited-duration health insurance plans. Mr. Spiller admitted to the USTelecom Industry Traceback Group that he knowingly called consumers on the Do Not Call list as he believed that it was more profitable to target these consumers. He also admitted that he made millions of calls per day, and that he was using spoofed numbers.

The robocalls falsely claimed to offer health insurance plans from well-known health insurance companies such as Aetna, Blue Cross Blue Shield, Cigna, and UnitedHealth Group. For example, one call stated: “Are you looking for affordable health insurance with benefits from a company you know? Policies have all been reduced nationwide such as Cigna, Blue Cross, Aetna, and United just a quick phone call away. Press 3 to get connected to a licensed agent or press 7 to be added to the Do Not Call list.” If they did press 3, consumers were transferred to a call center with no affiliation to the named companies, where call center representatives then would attempt to convince the consumer to purchase an insurance product sold by one of Rising Eagle’s clients. Rising Eagle’s largest client, Health Advisors of America, was sued by the Missouri Attorney General for telemarketing violations in February 2019.

Beginning in 2018, there was an increase in consumer complaints and robocall traffic related to health insurance and other health care products. The Traceback Group determined that approximately 23.6 million health insurance robocalls were crossing the networks of the four largest wireless carriers each day. The FCC Enforcement Bureau’s investigation found that a large portion of this unwelcome robocall traffic was driven by Rising Eagle.

The Truth in Caller ID Act prohibits manipulating caller ID information with the intent to defraud, cause harm, or wrongfully obtain anything of value. The FCC’s investigation found that the robocalls made by Rising Eagle were spoofed in order to deceive consumers, targeted millions of Do Not Call list participants, and were received on many wireless phones without prior consumer consent. The scam also caused the companies whose caller IDs were spoofed to become overwhelmed with angry call-backs from aggrieved consumers. At least one company was hit with several lawsuits because its number was spoofed, and another was so overwhelmed with calls that its telephone network became unusable.

In recent years, the FCC has issued a number of very large fines and proposed fines for spoofing violations. In addition, it has permitted phone companies to block suspected malicious robocalls before they get to consumers; led the push for caller ID authentication using STIR/SHAKEN standards; worked to reduce unwanted calls to reassigned numbers; took steps to prevent scam robotexts; and provided many alerts, tips, and other education tools to help consumers protect themselves from scammers. More information is available at: https://www.fcc.gov/spoofed-robocalls.

The proposed action, formally called a Notice of Apparent Liability for Forfeiture, or NAL, contains only allegations that advise a party on how it has apparently violated the law and may set forth a proposed monetary penalty. The Commission may not impose a greater monetary penalty in this case than the amount proposed in the NAL. Neither the allegations nor the proposed sanctions in the NAL are final Commission actions. The party will be given an opportunity to respond and the Commission will consider the party’s submission of evidence and legal arguments before acting further to resolve the matter.

Action by the Commission June 9, 2020 by Notice of Apparent Liability for Forfeiture (FCC 20-74). Chairman Pai, Commissioners O’Rielly, Carr, Rosenworcel, and Starks approving. Chairman Pai, Commissioners Carr, Rosenworcel, and Starks issuing separate statements.

While the proposed fines are great news and the people will have a chance to hire attorneys and dispute them, two commissioners issued similar chilling reminders of previous fines:

But what now? What is the plan for following through to make sure this forfeiture is paid (assuming there’s something to collect) and that these offenders get out of the robocalling business for good?

According to a Wall Street Journal Article, between 2015 and March of 2019 the FCC issued forfeitures totaling $208.4 million for robocall violations, but collected only $6,790. Sarah Krause, The Wall Street Journal, “The FCC Has Fined Robocallers $208 Million. It’s Collected $6,790.” (Mar. 28, 2019) (also noting that during Ajit Pai’s tenure as FCC chairman since January 2017, the FCC had issued $202 million in forfeiture orders against robocallers but had collected none of it), https://www.wsj.com/articles/the-fcc-has-fined-robocallers-208-million-its-collected-6-790-11553770803.

I asked the Enforcement Bureau about our progress in collecting on large forfeitures, and was told that the Bureau does not maintain a list of proposed forfeitures and collections. Notably in 2015, then Commissioner Pai observed how the Enforcement Bureau’s process had “gone off the rails,” in part by how “extremely hard [it is to] find out just how much money is actually being collected after the media headlines fade into the rear-view mirror.”. Remarks of Commissioner Ajit Pai at the PLI/FCBA 33rd Annual Institute on Telecommunications Policy & Regulation, Washington, DC (Dec. 3, 2015), https://www.fcc.gov/document/commissioner-pai-plifcba-remarks. Commissioner Pai also mentioned a then-recent POLITICO headline that read, “FCC proposes millions in fines, collects $0.”

He wanted the same answers then that I want now, but five years later we appear to be in the same place.

The threat of large fines as a deterrent means nothing if we systematically fail to actually collect on them, including coordinating with the Department of Justice. That means better follow-through on the entire life of an enforcement action. We must work harder to ensure on the back end that our enforcement efforts reap actual, measurable results, and then be transparent about how we’re doing to put violators on notice that we mean business. Otherwise, we’re just creating more headlines.

Fines of $208 million and only collected $6,790?

What the heck?

Penalties are only a deterrent if the fines are actually collected. Is it that $208 million is not enough of an incentive for the Justice Department to act? Will this $250 million fine get them DOJ off of their collective butts?

It almost makes you think that the government only pays lip service to the laws.

Unless, of course, you are a peon and then they will throw you in jail so fast it will make your head spin.



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