The Federal Communications Commission this week levied its largest-ever fine against a robocalling operation: $225 million, against two companies which the agency says transmitted around 1 billion robocalls shilling short-term health insurance.
The FCC said that many of the calls made in the first half of 2019 by John C. Spiller and Jakob A. Mears (who used business names including Rising Eagle and JSquared Telecom) were illegally spoofed, and that the companies lied to consumers, falsely claiming to offer health insurance plans from companies such as Blue Cross Blue Shield and Cigna. In at least one case, the agency added, the spoofing led to an unassociated company being overwhelmed with call-backs from angry customers.
“Mr. Spiller admitted to the USTelecom Industry Traceback Group that he made millions of spoofed calls per day and knowingly called consumers on the Do Not Call list as he believed that it was more profitable to target these consumers. Rising Eagle made the calls on behalf of clients, the largest of which, Health Advisors of America, was sued by the Missouri Attorney General for telemarketing violations in February 2019,” the FCC added.
“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 Acting Chairwoman Jessica Rosenworcel.
That dollar figure may sound like a lot, but the agency has a history of levying large fines and being unable to collect on them. The FCC doesn’t have statutory authority to pursue collection of the fines, which has to be passed to the Department of Justice. However, the agency can opt to settle with companies, usually for less than the amount that they were originally fined.
Rosenworcel acknowledged that “the truth is that given the size and scope of the [robocall] problem, we have to do much, much more.” She announced the creation of a Robocall Response Team at the FCC, which will consist of more than 50 attorneys, economists, engineers and analysts from across the FCC’s bureaus. “Many of these folks have worked on robocall issues in the past, but coordination has been case-by-case and far too scarce. So we are putting in place a structure that allows us to think more broadly and act more boldly,” Rosenworcel added, saying that the first order of business for the group will be a comprehensive review of policies, laws and practices in order to identify gaps that need to be closed.
In addition to the $225 million fine, the FCC also used data from the industry traceback group to send warning letters to half a dozen voice providers to stop passing along scam robocall traffic involving fraudulent student loan calls, fraudulent utility calls, a fake sweepstakes, callers claiming falsely to be from the Social Security Administration or Apple tech support, and even attempted telephone denial of service attacks, over a period from 2019 to early this year.
The FCC was helped in its investigations by the USTelecom Industry Traceback Group, which is a group of wireless, wireline, cable and Voice over IP providers who work to identify and trace the sources of illegal robocalls, then collaborate with enforcement agencies. The group is managed by industry association USTelecom.
The providers who received the FCC letters have 14 days to respond with information about how they will investigate and cut off that traffic, or U.S.-based voice providers will be able to block all calls coming from those companies. The FCC took similar steps last year and the actions have resulted in some spam call traffic being shut down in as little as 24 hours.
