The Federal Trade Commission (FTC) has warnedOpens a new window 19 internet phone-service firms to stop carrying illegal robocalls as regulators finally move to curb the explosion of robocalls with deceitful telemarketing pitches.
Although the FTC didn’t name the companies issued warning letters, it did say they were enabling swindlers to bilk consumers out of millions of dollars.
Internet phone technology can be a fraudster’s best friend, the FTC said. The technology allows scammers to trigger an avalanche of illegal calls for very little money and with a slim chance of prosecution at present.
The FTC’s move is significant. Until recently, federal regulators have been unsure of the legal grounds to hold telecoms responsible for anything that travels across their phone lines.
Federal test case
Late last year, the FTC and the Ohio attorney general filed a lawsuitOpens a new window without fanfare against the VoIP provider Globex, accusing it of collaborating with an outfit called Educare to unleash an onslaught of calls pitching bogus credit card interest rate reduction services. According to the lawsuit, consumers were scammed out of more than $11 million.
The company suspended the robocall campaign and challenged the FTC’s lawsuit. But a federal court overruled Globex’s objection in mid-January and that ruling seemed to add to the regulators’ confidence.
Other examples of the new headwinds against VoIP robocallers include an FCC pushOpens a new window against some unsolicited robocalls and a Justice Department move against two VoIP providers for connecting millions of illegal calls from India to American internet phone users.
Justice Department lawyers filed civil actions and restraining ordersOpens a new window against Ecommerce National in Arizona and Global Voicecom in New York.
‘Devastating financial harm’
“Robocalls are an annoyance to many Americans, and those that are fraudulent or predatory are a serious problem, often causing devastating financial harm to the elderly and vulnerable members of our society,†said Jody Hunt, an assistant attorney general. “The department will pursue individuals in the United States who knowingly facilitate imposter fraud calls, using both criminal and civil tools where appropriate.â€
Criminal robocalling is a focus for Justice Department lawyers, especially after offenders in India impersonated Internal Revenue Service tax collectors to swindle the elderly out of huge sums.
In one example cited by the lawyers, more than 720 million robocalls were channeled from India in a 23-day period. Many used spoofed, or faked, “Caller ID†numbers in the United States to persuade unsuspecting Americans to pick up their calls.
The VoIP defendants are alleged to have ignored repeated warnings to stop the illegal activity.
Impact on VoIP
Cases such as these are being supported by the transparency that internet phone calls now offer. It’s much easier to trace a call over the web than with land-line systems. This means federal agencies can build stronger cases against internet phone firms.
The implication for the VoIP phone sector is that the robocall sector will be closely monitored by the feds and that companies that enable law breakers can expect to be dragged into court.
The FTC’s warning letter to the 19 VoIP providers is yet another sign that the feds finally mean business.
Key takeaways:
- US regulators are clamping down on internet phone providers that channel illegal robocalls to con Americans out of their savings and are now beginning to take action against the VoIP companies that make calls by the millions.
- Following a landmark case against a Nevada-based VoIP operation, both the Federal Trade Commission and the Department of Justice have started taking action, either via warning letters or civil suits.
- VoIP companies that continue to allow their platforms to be used to channel illegal robocall campaigns designed to prey on US citizens are likely to face the full weight of federal law.