The Federal Communications Commission (FCC) has announced a record penalty of nearly $300 million against a transnational network of companies, which made over five billion auto warranty scam robocalls in a three-month span during 2021. The extensive operation executed a scheme violating multiple federal statutes and FCC regulations, marking the largest illegal robocall endeavor the agency has ever tackled.
The illegal operation worked under numerous names, including Sumco Panama, Virtual Telecom, Davis Telecom, Geist Telecom, Fugle Telecom, Tech Direct, Mobi Telecom, and Posting Express. Central to the activity were two individuals, Roy M. Cox and Aaron Michael Jones, both of whom had been previously banned for life from making telemarketing calls due to past litigation by the Federal Trade Commission and the State of Texas.
The agency’s statement detailed the range of transgressions committed by this network, including placing pre-recorded voice calls to mobile phones without express consent, dialing numbers listed on the National Do Not Call Registry, failing to identify themselves at the start of the call, and failing to provide an opt-out call-back number for consumers. Notably, the operation also breached federal spoofing laws by utilizing over a million different caller ID numbers in an attempt to obscure the true origin of the robocalls.
FCC Enforcement Bureau Chief, Loyaan A. Egal, stressed the FCC’s commitment to protecting consumers and the integrity of U.S. communications networks, thanking the Enforcement Bureau’s Telecommunications Consumers Division for their critical work on the case. The FCC intends to continue partnering with federal and state entities to hold accountable those responsible for such egregious violations.
As early as 2018, the now-fined operation was facilitating the sale of vehicle service contracts under false pretenses of selling auto warranties. In an effort to disrupt this campaign, the FCC mandated U.S.-based voice service providers to stop carrying traffic associated with identified members of the operation in 2022. This action led to a dramatic 99% decrease in illegal auto warranty robocalls.
In coordination with the Ohio Attorney General’s Office, the FCC has launched a lawsuit under the Telephone Consumer Protection Act against several entities and individuals tied to the operation. Despite the opportunity given to respond to the proposed fine, no replies were received from the accused parties, prompting the FCC’s record-breaking fine. Should the parties not promptly comply with the fine, the case will be forwarded to the U.S. Department of Justice for collection.
Expanding its effort to combat illegal robocall campaigns, the FCC’s Robocall Response Team announced new partnerships with the Attorneys General of Hawaii and New Mexico. In total, forty-six states, the District of Columbia, and Guam have signed Memoranda of Understanding to cooperate with the FCC’s Enforcement Bureau, sharing evidence, coordinating investigations, pooling resources, and striving to protect American consumers from scams.
Despite the FCC’s stringent action, some critics view the massive penalty as mostly a public relations move, expressing skepticism about the collectability of the imposed fines. Others are still wondering, in today’s technologically advanced age, why telephone companies aren’t better equipped to implement effective spam blocking measures.
