Illegal Telemarketers Beware: FCC Issues $225 Million in Fines to Two Companies
The U.S. Federal Communications Commission (FCC) last week fined two Texas-based telemarketers $225 million—the largest fines in FCC history—for allegedly placing approximately 1 billion robocalls, many of them illegally spoofed, as part of an illegal health insurance scam.
The robocalls falsely claimed to offer health insurance plans from well-known insurers like Blue Cross Blue Shield and Cigna.
According to official filings from the FCC, John Spiller and Jakob Mears allegedly ran companies named Rising Eagle and JSquared Telecom and transmitted spoofed robocalls across the country during the first four-and-a-half months of 2019. The pair is also alleged to have made millions of spoofed calls per day and knowingly violated the Federal Trade Commission’s national Do Not Call registry.
"The individuals involved didn't just lie about who they were when they made their calls. They said they were calling on behalf of well-known health insurance companies on more than a billion calls. That's fraud on an enormous scale," said FCC Acting Chair Jessica Rosenworcel in a statement.
The FCC receives more complaints about robocalls than any other issue.
"It's easy to see why! Robocalls are intrusive and annoying, and during the last few years the number has skyrocketed," Rosenworcel said.
And the statistics back it up. In February alone, robocallers illegally placed 4.6 billion calls (averaging 159.1 million calls/day or roughly 1,911 calls/second), according to the YouMail Robocall Index for the month. That represents a 27 percent increase over January's total, and, at this rate, robocalls are on pace to reach 51 billion for 2021, a significant increase from 2020, according to YouMail's data.
"One of the most insidious things robocallers do is trick people into taking the call. They disguise who they are by spoofing their number and instead use numbers that we trust—friends, family, and familiar institutions. This isn't just frustrating; it's dangerous. When we can't trust that the number we see is the number that is truly calling, we're less likely to pick up the phone and more likely to miss important calls from those we really care about," Rosenworcel said.
While she called the $225 million fine levied against the two Texas companies "a just outcome," she added that "given the size and scope of the problem, we have to do much, much more."
To that end, Rosenworcel also announced last week that the FCC isn't limiting itself to fines and introduced a new anti-robocall agenda that includes the creation of a Robocall Response Team. According to Rosenworcel, this team will consist of more than 50 attorneys, economists, engineers, and analysts from the FCC to conduct a "top-to-bottom review of [the commission's] policies, laws, and practices, to identify gaps we need to close."
The FCC also last week sent cease-and-desist letters to six phone providers in the United States, Canada, and the United Kingdom for allegedly transmitting illegal robocall traffic. They were Icon Global, IDT, RSCom, Stratics Networks, Third Rock, and Yodel Tech.
"We have already warned providers that they have to stop carrying illegal robocalls. The letters today represent our final notice: if these providers don't act within 48 hours to stop transmitting these illicit robocalls, we will authorize other carriers to block this unlawful traffic," Rosenworcel said. "These missives won’t be the last. We are going to redouble our efforts to issue cease and desist letters to get providers to keep these junk calls off of our networks."
The FCC is also sending letters to the U.S. Department of Justice, the U.S. Federal Trade Commission, and National Association of State Attorneys General to step up efforts to crack down on robocalls.
Those efforts, Rosenworcel said, will require "a whole-of-government approach."
"I look forward to working with them to leverage the knowledge, skills, and jurisdictional reach we each have to address this problem," she said.