The Federal Communications Commission wants to fine Texas-based telemarketers a whopping $225 million for making one billion illegally spoofed robocalls—marking the largest proposed fine in the FCC's 86-year history.
Under the guise of Rising Eagle and JSquared Telecom, John C. Spiller and Jakob A. Mears falsified approximately one billion calls in the first half of 2019. The pair phoned people across the country on behalf of clients selling short-term, limited-duration health insurance plans. Spiller later told the USTelecom Industry Traceback Group—a collaborative effort that actively IDs the source of illegal robocalls—that he knowingly contacted folks on the Do Not Call list because it was "more profitable."
"Not only did he make millions of calls a day using spoofed numbers, but he took particular care to include customers who had put their names on the National Do Not Call Registry—because he 'found his sales rates … rose substantially' when he did so," FCC Chairman Ajit Pai said in a statement.
Spoofing, as defined by the FCC, is the act of deliberately falsifying caller ID info to disguise an identity. Scammers may use neighbor spoofing to appear local, or copy the number of a trusted company or government agency. They then use scripts to try to steal money or valuable personal information. In this case, Mears and Spiller falsely claimed to offer health insurance plans from well-known companies like Aetna, Blue Cross Blue Shield, Cigna, and UnitedHealth Group.
When unsuspecting victims entered a certain keypad number to "get connected to a licensed agent," they were instead transferred to an unaffiliated call center, where representatives would attempt to sell insurance from one of Rising Eagle's clients. Including Health Advisors of America, which was sued by the Missouri Attorney General for telemarketing violations in February 2019.
"The facts are pretty clear cut here," FCC Commissioner Geoffrey Starks said. "Spiller and Mears appear to have merited every penny of the forfeiture we propose today for their prolific robocalling campaign." But, as he pointed out, the threat of large fines "means nothing if we systematically fail to actually collect on them."
"Over the last several years the FCC has levied hundreds of millions in fines against robocallers just like the folks we have here today," Commissioner Jessica Rosenworcel added. "In fact, it was last year that The Wall Street Journal did the math and found that we had collected no more than $6,790 on hundreds of millions in fines. Why? Well, one reason is that the FCC looks to the Department of Justice to collect on the agency's fines against robocallers. We need to help them. So when they don't get involved—as here—that's not a good sign."
The 2009 Truth in Caller ID Act prohibits manipulating caller ID information with the intent to defraud, cause harm, or wrongfully obtain anything of value—which is exactly what Rising Eagle did. The scam, according to the FCC, also caused those firms whose identity was spoofed to be flooded with angry customers. At least one company was hit with "several" lawsuits, another was so overwhelmed that its telephone network went down, and one disabled and elderly recipient fell down trying to answer repeated calls.
Following Tuesday's proposal, Pai announced that seven state attorneys general sued Rising Eagle, JSquared Telecom, Spiller, and Mears, seeking a permanent injunction and damages of up to $3,000 for each violation.
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