Robocall Kingpins, and Other Takeaways from the Joint FCC-FTC Robocall Policy Forum

Today’s focus on insideARM is about robocalls. This post is about what I learned from last Friday’s FCC-FTC Joint Policy Forum on Fighting the Scourge of Illegal Robocalls. Be sure to read this other article published today, by Karl Koster, who shares his opinion about the fact that carriers should be notifying callers if their calls are being blocked, and how they should do it.

The Policy Forum featured prepared remarks from the leaders of both federal agencies with jurisdiction over robocalls, including newly installed FCC Chief of Consumer and Governmental Affairs Patrick Webre, FCC Chairman Ajit Pai, FTC Acting Chairman Maureen Ohlhausen, and several Commissioners from both agencies. All of them basically said the same thing: Illegal robocalls are awful, we get tons of complaints about them, and this issue is our top priority.

The substance of the Forum included a series of three panels including the regulators on the front lines of enforcement and rulemaking, representatives of the carrier industry and the calling industry, and consumer advocates.

These are my key questions/takeaways:

There are robocall kingpins

Although many illegal robocalls are originated outside of the United States – and enforcement against these actors is challenging -- the FTC has learned that there are “kingpins” who seem to lord over the bulk of the schemes and those kingpins tend to be located in the United States. Denise Beamer, Senior Assistant Attorney General for the Florida Office of the Attorney General, said “[The kingpins] are known, they are sophisticated, and they are connectors…Going after them really is a deterrent.”

Illegal robocalling scams are simply too profitable

Kevin Rupy, Vice President of Law and Policy for USTelecom (an association of major carriers), noted that robocall scams occur because they are so profitable. The technology has become so cheap and easy to establish, and of course scammers have no cost of compliance. If we could increase the cost of making the calls, the scams would be less profitable, and the incentives would be reduced. Rupy also said that collaboration and information sharing is essential. USTelecom hosts an industry traceback group which cooperates to trace illegal calls back to their source. This, he says, can help to “take out calls at the root versus swatting flies one call at a time.”

Why can’t we collect all of the fines?

Regulators have successfully sued illegal robocallers and have imposed material fines – but only about ten percent of those fines have been collected. If the schemes are so lucrative, why can we only successfully collect such a small amount of the fines? This seems to me a big loophole in the idea of deterrence. (By the way, I’ve noted this issue in many FTC announcements about enforcement actions and fines – not just in the area of robocalls. An announcement will say something like, we’ve imposed a fine of $10 million, $1.1 million has been paid, and the rest is set aside based on the attestation that the criminal has no money…. What?)

Panelist Ed Bartholme, Executive Director of Call for Action and Chair of the FCC’s Consumer Advisor Committee noted there should be a criminal element – and a threat of jail time -- for these illegal activities.

Legitimate businesses need to know if their calls are being blocked

Legitimate businesses need to know whether their calls are being blocked or labeled. Panelist Michele Shuster, General Counsel for the Professional Association for Customer Engagement, suggests that the intercept code could be used for this purpose (the subject of the above mentioned Karl Koster article). And she reminded listeners that legitimate callers need a reasonable avenue for remediation of errors. Right now it’s a big open-ended hole, where call originators would need to work individually with half a dozen carriers, and potentially dozens of application providers, which all have a different process (or no process) for handling these issues.

Regulators welcome innovation

When asked what industry can do to help regulators solve this problem, FTC’s Lois Greisman, Associate Director of the Division of Marketing Practices (she has primary responsibility for enforcement of the telemarketing rules), said “Innovate. Do what you do best.” She is very encouraged by the proliferation of available solutions, and to the advancement of the discussion from a time only recently when blocking calls was illegal, to today’s discussion of unintended consequences.

Collaboration is essential

All panelists repeated the mantra that all stakeholders must work together to solve this problem. And indeed, this is happening on many fronts -- though call originators would likely say not fast enough.

Spoofing is a root cause of the problem

Sherwin Siy, Special Counsel in the FCC’s Wireline Competition Bureau, said spoofing must be addressed. Mark Stone, Deputy Chief of the Consumer and Governmental Affairs Bureau at the FCC agreed and added that caller ID authentication is needed. …Which brings us to SHAKEN/STIR (a subject of one of my recent videos).

Jim McEachern, Senior Technology Consultant from the Alliance for Telecommunications Industry Solutions, a primary architect of the SHAKEN/STIR protocols, explained that SHAKEN will allow an originating service provider (carrier) to attest to what they know – in other words, that a calling number is owned by the originator. This information will be cryptographically signed and verified so it can’t be altered in transit. While this alone is not a complete solution to illegal robocalls, it will provide objective and reliable information to application providers, which they can combine with other intelligence about the number, in order to decide to block or label the call.

Jim McEachern will be visiting with the Consumer Relations Consortium and Innovation Council at its upcoming meeting on April 25-26 to further explain this technology.