Harsh TCPA Enforcement Trend Emerging Under Chairman Pai


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August 2017 TCPA Compliance Monitoring Report

If once is chancetwice is a coincidence, and three times is a trend, there’s now a clear trend pointing to robust Telephone Consumer Protection Act (“TCPA”) enforcement under the Pai Federal Communications Commission (“FCC” or “Commission”). That’s especially true for callers or calling platforms that spoof caller ID information when making robocalls.

Earlier this month, the Commission issued a Notice of Apparent Liability (“NAL”) proposing a penalty of $82,106,000 to Philip Roesel personally and his company, Best Insurance Contracts, Inc. The NAL stems from Roesel’s use of altered caller ID information (“spoofing”) to make insurance sales calls and develop insurance sales leads for other sales people. The NAL suggests that Roesel made over 21 million robocalls using spoofed caller ID information, but it bases the forfeiture on “just” the 82,106 calls the FCC’s Enforcement Bureau confirmed had spoofed caller ID information. The Commission then applied the base forfeiture of $1,000 per call to arrive at its final proposed forfeiture. The Commission can impose a forfeiture of up to $11,052 per spoofing violation.

This NAL also continues the Commission shift toward considering caller ID spoofing presumptively deceptive. As we noted in June, when the Commission imposed a $120 million proposed forfeiture on another individual, the Commission is taking an increasingly hostile approach to robocallers that spoof caller ID information. In the June NAL, the caller, Adrian Abramovich, was making fraudulent calls in furtherance of an international timeshare sales scam. Therefore, his conduct more clearly fit within the statute’s prohibition on spoofing caller ID information with the intent to “defraud, cause harm, or wrongfully obtain anything of value.”

However, Roesel sells legitimate insurance policies. Nonetheless, the Commission found that his use of spoofed caller ID information was intended to cause harm and wrongfully obtain something of value. The Commission concluded that Roesel intended to spoof caller ID information when making his calls “to perpetuate an illegal robocalling campaign,” and because illegal robocalls are harmful according to the Commission, Roesel’s caller ID spoofing was done with the intent to cause harm.

The Commission also found that Roesel wrongfully obtained something of value by using spoofed caller ID information. By making it difficult for called parties, the FCC, or other law enforcement agencies to determine who was making the robocalls, Roesel attempted to avoid FCC forfeiture penalties for TCPA violations, Federal Trade Commission civil penalties for violations of the do-not-call registry, and/or private lawsuits brought by the individuals Roesel called. This avoidance of consequences constituted something of value according to the FCC, and Roesel intended to wrongfully obtain protection from those consequences by using caller ID spoofing to hide his identity.

This reasoning by the Commission effectively renders every illegal robocall made with spoofed caller ID information a double violation, once for the robocall violation and once for the caller ID spoofing violation. The Commission reinforces that interpretation by issuing a citation to Roesel on the same day for the illegal robocalls he and his company made. Therefore, if Roesel continues making robocalls without the consent of the people he calls, he could face additional forfeiture proceedings for those violations as well.

Finally, the Commission determined that Roesel intended to wrongfully obtain something of value because he was selling insurance. Despite this line of business being legitimate, the FCC relied on that to satisfy the “obtain something of value” prong of the statute. The FCC then relied on the fact that the robocalls Roesel made were illegal to show that he wrongfully intended to gain that value. Roesel would likely argue that his intent could not be wrongful because his intent was to sell real insurance policies, but by decoupling the intent to obtain something of value from the intent to obtain it wrongfully, the Commission has effectively turned any robocall made for sales purposes with spoofed caller ID into a caller ID spoofing violation if the robocall does not comply with the TCPA.

This means that even businesses that rely on robocalling for legitimate sales calls must carefully consider the risk of using spoofed caller ID information. While the Commission allows that some uses of caller ID spoofing may be permissible, the burden would likely by on the caller to justify their use of caller ID spoofing, and if the caller cannot justify its use to the Commission, it faces double violations for any robocalls that violate the TCPA, one for the TCPA violation and one for the caller ID spoofing.

If you have any questions about how the Commission’s approach to caller ID spoofing could impact your business, please contact Seth Williams, slw@commlawgroup.com, Nate Hardy, njh@commlawgroup.com, or Jane Wagner, jlw@commlawgroup.com.

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