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FCC Fines Company $37.5M For Spoofing Calls

Oct 27, 2020 Law Street

On Tuesday the Federal Communications Commission (FCC) announced that it fined Affordable Enterprises of Arizona $37.5 million for making at least 2.3 million illegal spoofed telemarketing calls in a 14-month period starting in 2016 in violation of the Truth in Caller ID Act.

According to the FCC, the company either used unassigned phone numbers or phone numbers that in most cases “belonged to innocent Arizona consumers and placed them in the caller ID of their telemarketing calls.” As a result of this purported conduct, Affordable Enterprises of Arizona “was able to appear to be calling from local phone numbers and to avoid receiving angry callbacks when making spoofed telemarketing calls to sell home improvement and remodeling services.” Moreover, the FCC stated that the caller ID was manipulated to appear to come from a number not connected to the company. Additionally, calls also came from pre-paid “burner phones. Regardless, Affordable Enterprises of Arizona allegedly spoofed the caller ID, so consumers were not able to correctly identify the caller.

The FCC claimed that one Arizona resident “received more than five calls per day on her cell phone from consumers complaining about telemarketing calls they thought she had made.” In reality, the FCC averred that records indicate that the company made spoofed calls and made it look like the calls were coming from this Arizonan’s phone number. The FCC stated that this conduct harms consumers – both receiving the spoofed calls and those whose numbers are spoofed.

The FCC’s Enforcement Bureau investigated the company after a tip from a former Affordable Enterprises of Arizona employee; the FCC relied on subpoenaed phone records and consumer complaints. The FCC rejected the company’s defense as to why the Commission should not impose a forfeiture on it. Specifically, the company alleged that it did not know that its caller ID information was misleading or inaccurate, but the FCC noted that the facts suggested otherwise, indicating that the company knew and made a concerted effort to not have the company name on the caller ID. Subsequently, Affordable Enterprises of Arizona is accused of violating the Truth in Caller ID Act, which “prohibits anyone from transmitting misleading or inaccurate caller ID information with the intent to defraud, cause harm or wrongly obtain anything of value.”

Chairman Pai noted that “Today, we continue our full court press to combat unwanted and unlawful spoofed telemarketing calls.” The Chairman added that while the company “seeks a slap on the wrist” and argued that its penalty should only be $3,752.50, which is “0.01% of the proposed forfeiture.” Chairman Pai stated that “[t]he facts, Commission precedent, and statutory guidelines warrant a $37,525,000 penalty.”

Chairman Pai and Commissioners Carr, Rosenworcel, and Starks approved this enforcement and forfeiture. Commissioner O’Rielly approved and dissented in part.

This specific forfeiture order example comes after the  FCC has taken widespread measures to combat spoofed calls, for example, in September the Commission adopted more rules to combat illegal robocalls relying on the STIR/SHAKEN caller ID framework and implementing the TRACED Act. Additionally, in April  the FCC required phone companies to combat spoofed calls.