5 FCC Regulatory Actions Against VoIP and Wholesale Carriers
In recent years, robocalls have become a pervasive annoyance. They have disrupted our daily lives with incessant, often fraudulent calls.
While these unwanted calls have been a problem for landline users for years, the rise of VoIP services has made them even more prevalent.
VoIP carriers, once hailed as a modern alternative to traditional landline services, are now facing increasing scrutiny from regulators and consumers alike. All due to their inability to effectively combat robocall traffic.
The Federal Communications Commission (FCC) has taken a series of actions against VoIP carriers, highlighting their shortcomings in preventing illegal robocalls.
Despite implementing STIR/SHAKEN call authentication and participating in the Robocall Mitigation Database, many VoIP carriers have been unable to curb the tide of robocalls flooding their networks.
This blog will delve into five recent events where the FCC has taken regulatory action against VoIP carriers for their failure to stop illegal robocall traffic.
1. Global UC's Penalty for Robocall Violations
In July 2023, the Federal Communications Commission (FCC) took decisive action against Global UC, a VoIP service provider, for its involvement in facilitating illegal robocalls. The company was found to be complicit in transmitting a significant volume of robocalls, including fraudulent messages about auto warranties and health insurance.
These robocalls targeted millions of U.S. consumers, exploiting vulnerabilities in the telecom system. The FCC's intervention marked a critical step in its ongoing effort to clamp down on VoIP carriers that enable such deceptive practices.
Investigation Findings
The FCC's investigation revealed that Global UC failed to implement necessary safeguards to block illegal robocall traffic.
Despite repeated warnings and clear regulatory guidelines, the company continued to allow scam calls to pass through its network. These calls often used spoofed caller IDs, misleading recipients into believing they were from legitimate sources.
The investigation highlighted the carrier's negligence in monitoring and controlling the type of traffic it facilitated, contributing to widespread consumer harm.
FCC Action
In response to these findings, the FCC imposed a substantial fine on Global UC and issued a cease-and-desist order. The fine serves as a stern warning to other VoIP providers about the consequences of non-compliance.
Additionally, the FCC has mandated Global UC to implement stringent measures to prevent future violations, signaling its unwavering commitment to protecting consumers from illegal robocalls.
2. FCC's Action Against One Eye LLC
In July 2023, the FCC targeted One Eye LLC, a VoIP carrier, for its involvement in transmitting illegal robocalls. The company was implicated in facilitating fraudulent calls, particularly those related to health insurance and car warranty scams.
These calls were part of a larger wave of robocall activity that has plagued U.S. consumers, contributing to the billions of unsolicited calls made annually.
The FCC's intervention aimed to disrupt the operations of carriers that knowingly or negligently allow such traffic through their networks.
Investigation Findings
The investigation into One Eye LLC revealed that the company was not only routing illegal robocalls but also failing to take necessary actions to prevent these calls, despite clear warnings from the FCC.
The robocalls in question often employed caller ID spoofing techniques to deceive recipients into answering the calls, under the guise of legitimate businesses.
These actions violated multiple FCC regulations designed to protect consumers from deceptive and harmful practices.
FCC Action
In response to the violations, the FCC issued a cease-and-desist order against One Eye LLC and imposed a significant financial penalty.
The FCC's order demanded that the company immediately halt the transmission of illegal robocalls and implement stronger measures to ensure compliance with federal regulations.
This action was part of the FCC's broader crackdown on VoIP providers that contribute to the epidemic of illegal robocalls in the United States.
3. Sumco Panama and Related Entities Blocked (July 2023)
In July 2023, the FCC took a significant step in its fight against illegal robocalls by ordering U.S. phone carriers to block all traffic originating from Sumco Panama and related entities.
These groups were responsible for an extensive robocall operation, generating over 8 billion illegal calls since 2018.
The robocalls primarily promoted auto-warranty scams, which have become a pervasive issue in the U.S., affecting millions of consumers and causing widespread frustration and financial loss.
Investigation Findings
The FCC's investigation uncovered that Sumco Panama was behind one of the largest robocall operations ever recorded. The robocalls, often using spoofed caller IDs, targeted consumers with fraudulent offers related to auto warranties.
The investigation revealed that these calls were designed to deceive consumers into providing personal and financial information, leading to significant consumer harm.
Despite previous warnings, Sumco Panama continued its operations, ignoring FCC regulations.
FCC Action
As a result of these findings, the FCC took the unprecedented step of ordering all U.S. carriers to block traffic from Sumco Panama. Thus, effectively cutting off the group’s access to U.S. consumers.
On top of that, the FCC issued a record breaking fine of $300 Million for all the frauds committed through and facilitated by Sumco Panama’s network.
This action marked one of the most aggressive moves by the FCC to date. The action demonstrated the agency's commitment to eradicating illegal robocall operations.
The FCC also initiated further investigations into other entities associated with Sumco Panama to ensure that similar operations are dismantled.
4. Cease-and-Desist Letters to Multiple VoIP Providers
In August 2023, the FCC intensified its efforts to curb illegal robocalls by issuing cease-and-desist orders to multiple VoIP providers, including Call Pipe, Fugle Telecom, and SipKonnect.
These companies were found to be key enablers of robocall traffic, particularly scam calls related to auto warranties, health insurance, and fraudulent sweepstakes.
These scams have become a major nuisance, with the FCC estimating that billions of robocalls are made to U.S. consumers each month.
Investigation Findings
The FCC's investigation revealed that these VoIP providers were consistently routing illegal robocall traffic without taking adequate steps to prevent it.
The robocalls often involved spoofed caller IDs, misleading consumers into believing they were receiving calls from legitimate sources.
Despite previous warnings and the opportunity to comply with the FCC's anti-robocall rules, these companies failed to act, allowing the fraudulent calls to continue unabated.
The investigation also noted that these calls targeted vulnerable populations, leading to significant financial losses.
FCC Action
In response, the FCC issued cease-and-desist orders to the implicated VoIP providers, demanding that they immediately stop transmitting illegal robocalls.
The FCC warned that failure to comply could result in more severe penalties, including fines or being completely barred from the U.S. communications network.
This action was part of the FCC's broader strategy to target not only the originators of robocalls but also the service providers that enable these illegal activities.
5. $225 Million Fine for Health Insurance Robocalls
In August 2023, the FCC imposed a historic $225 million fine on a health insurance telemarketing firm, Rising Eagle, for making nearly 1 billion illegal robocalls in just five months. This marked one of the largest fines ever levied by the FCC for robocall violations.
The firm was responsible for bombarding consumers with unwanted calls promoting health insurance plans. They often used deceptive tactics such as spoofing caller IDs to make the calls appear legitimate.
Investigation Findings
The FCC's investigation revealed that the telemarketer, which remains unnamed in some reports, orchestrated an extensive robocall campaign that involved spoofing numbers to trick consumers into answering calls.
The calls were not only unsolicited but also misleading, falsely presenting themselves as official communications from well-known health insurance providers.
The investigation highlighted that these robocalls violated multiple FCC regulations, particularly those related to caller ID spoofing and the Do Not Call Registry.
FCC Action
In response to these egregious violations, the FCC issued a $225 million fine, sending a strong message to other telemarketers and VoIP providers about the consequences of engaging in illegal robocall practices.
The FCC also ordered the company to cease its robocall operations immediately and implement corrective measures to ensure future compliance.
This action underscores the FCC's commitment to aggressively pursuing violators in the ongoing battle against robocalls, which remain a top consumer complaint in the United States.
These actions highlight the FCC's intensified efforts to curb the plague of illegal robocalls. They are targeting both the entities behind the calls and the carriers that facilitate their transmission.
Challenges for Carriers in Identifying and Curbing Illegal Robocall Traffic from Upstream Carriers
Carriers face several challenges in identifying and curbing illegal robocall traffic originating from upstream carriers:
1. International Traffic: Many robocalls originate from international sources, making it even more challenging to identify the source and take action. Jurisdictional complexities and international cooperation can be obstacles.
2. Lack of Transparency: Upstream carriers may not always provide sufficient information or transparency about the traffic they are sending to downstream carriers. This can make it difficult to identify suspicious activity.
3. Resource Constraints: Carriers may have limited resources to invest in advanced tools and technologies for detecting and blocking robocalls. This can hinder their ability to effectively combat the problem.
4. Technological Limitations: Even with advanced technologies like STIR/SHAKEN and the Robocall Mitigation Database, there are limitations. These tools may not be able to detect all types of robocall scams, and they can be circumvented by sophisticated bad actors.
Addressing these challenges requires a multifaceted approach involving collaboration between carriers, regulators, technology providers, and consumers.
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