Robocall Operation Fined $300 Million as Offensive Against Illegal Telemarketing Continues

Wim De Gent
By Wim De Gent
August 5, 2023US News
Robocall Operation Fined $300 Million as Offensive Against Illegal Telemarketing Continues
A headset hangs on a cubical wall in Philadelphia on Sept. 26, 2003. (William Thomas Cain/Getty Images)

The Federal Communications Commission (FCC) issued a $300 million fine for an auto warranty scam robocall operation acting through an international network of companies.

The American regulator called the enterprise “the largest illegal robocall operation the agency has ever investigated”—and the fine its highest ever.

Operating since at least 2018, the enterprise involved a “complex scheme designed to facilitate the sale of vehicle service contracts under the false and misleading claim of selling auto warranties,” the FCC said in a release.

During a three-month span in 2021, the enterprise made more than 5 billion robocalls to more than 500 million phone numbers, violating federal spoofing laws by using more than 1 million different caller ID numbers in an effort to disguise the true origin of the robocalls, so as to increase the chances of the target answering.

According to the FCC, the operation violated numerous robocall prohibitions, such as dialing numbers included on the National Do Not Call Registry; failing to provide a call-back number that allowed consumers to opt out of future calls; and using fake caller IDs.

According to the FCC, the multi-national enterprise consisted of eight different entities: Sumco Panama, Virtual Telecom, Davis Telecom, Geist Telecom, Fugle Telecom, Tech Direct, Mobi Telecom, and Posting Express.

In 2022, the FCC initiated cooperation with the Ohio Attorney General’s Office, directing all U.S.-based voice service providers to no longer carry traffic linked to certain entities of the operation.

“As a result, these illegal auto warranty robocalls dropped by 99 percent,” the FCC said.

The AG’s office pressed charges under the Telephone Consumer Protection Act against several companies linked to the robocalls.

“The Commission also proposed a fine and offered the parties a chance to respond, which they did not do, resulting in today’s unprecedented fine,” the FCC statement read.

Two of the key figures in the operation had faced very similar charges in the past, the FCC said.

In 2017, Aaron Michael Jones received a $2.7 million fine and a lifetime ban on telemarketing. According to the Federal Trade Commission (FTC), Mr. Jones’s network of companies at the time made “billions of illegal telemarketing robocalls” and “called numbers listed on the Do Not Call Registry at a rate of more than 100 million per year.”

In a 2013 settlement, Roy M. Cox Jr. agreed to a lifetime telemarketing ban. Mr. Cox had been accused of organizing an illegal robocall operation offering credit card interest rate reduction programs, extended automobile warranties, and home security systems.

Refusal to pay the $300 million fine will have the case handed over to the U.S. Department of Justice.

“We take seriously our responsibility to protect consumers and the integrity of U.S. communications networks from the onslaught of these types of pernicious calls,” said FCC Enforcement Bureau Chief Loyaan A. Egal.

The FCC also took the opportunity to announce that AGs from Hawaii and New Mexico are the latest to sign a cooperative agreement. Thus far, 46 states, as well as the District of Columbia and Guam, have signed a Memorandum of Understanding to share evidence, coordinate investigations, and pool resources with the FCC’s Enforcement Bureau to better protect the American public from scams.

Just last month, the FTC announced stepping up its efforts to combat illegal telemarketing.

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