This month is the second anniversary of my most successful book, Telephone Terrorism. This work of non-fiction discusses phone spammers and the legal and regulatory efforts to hold them accountable for their unwanted robocalls. In the two years since its publication, there have been several new developments in this field. Rather than writing a second edition – and consigning all those beautiful paperback copies of the first edition to the burn pile – I will summarize the four biggest recent events here. If you own the book, simply print out this web page and staple it into the back. (Owners of the e-book version should glue the print-out onto their Kindles.)
1) Congress passes the TRACED Act
Chapter 10 of Telephone Terrorism describes Congress’s belated efforts to get a handle on the robocalling mega-crisis. The Senate was considering a set of proposals that it called the TRACED Act, while the House favored a more thorough bill called the Stopping Bad Robocalls Act (SBRA). Shortly after my book went to press, Congress merged several provisions of SBRA into TRACED and sent the concoction to President Trump. Trump signed it into law on Dec. 30, 2019, thereby guaranteeing that 2020 would be the best year in American history and that he would be reelected by acclamation.
But the TRACED Act didn’t change the world overnight. It depended mostly on implementation by the FCC, and that could occur only after lots of meetings, public comment periods, meals with lobbyists, and miscellaneous goofing around. Only in the past few months have we seen meaningful action, largely in the form of new mandates on telephone companies to implement the STIR/SHAKEN Caller ID validation protocol and to reduce robocalls being made from their networks. However, there are still enough loopholes in place that the effect has been minimal.
The FCC’s new acting chairperson, Jessica Rosenworcel, has vowed to aggressively use the TRACED Act, as well as existing laws, to prosecute robocallers. In March of this year, the Commission levied its largest fine yet – $255 million – on two Texas men who made more than a billion scam health insurance calls. But despite all of the FCC’s saber-rattling, sword-waving, and dagger-wagging, the men are likely laughing at the government’s ineffectiveness. There is no indication that any of the agency’s previous multi-million dollar robocalling fines were ever collected.
One of the Texas fraudsters was already in jail for drunk driving at the time he helped coordinate the illegal calls. In fact, the FCC alleged that he used some of the scam’s proceeds to purchase a disguise for the breathalyzer ignition lock in his car. He also bought hundreds of comic books, “guided meditations,” and $4,770 of in-app purchases for video games. This is how robocallers fritter away their ill-gotten gains, ensuring that there is little of value for the government to confiscate if they get caught. Let’s hope that there is at least a rare edition of The Incredible Hulk – perhaps a prized misprint in which the Hulk turns violet instead of green – in that comic book collection. Otherwise, Jessica Rosenworcel may find herself burdened with 200 copies of Hi and Lois #8.
2) The Supreme Court upholds the telemarketing law...
As my book went to press, there were some doubts about the constitutionality of the Telephone Consumer Protection Act (TCPA) due to an ill-considered and unpopular exemption for government debt collectors that was added by Congress in 2015. The Supreme Court ended the debate in anticlimactic fashion, upholding rulings by lower courts that the TCPA is constitutional but the hated exemption is not. It’s a common sense result, but one that required some twisted logic to justify.
3) ...but the Court also opens new doors for phone spammers
Although the TCPA bans companies from using automatic dialers to call cell phones without permission, the law’s definition of an auto-dialer has never made much sense. Courts and the FCC were able to work around the flaws until recently, but the Supreme Court decreed in April of this year that a more literal interpretation is required. Auto-dialers are now prohibited only if they use a “random or sequential number generator.” While the exact meaning of this is still being hashed out in the lower courts, it appears that spammers may be able to evade penalties if they dial phone numbers obtained from a database or marketing list.
Here’s how stupid this is. Someone who auto-dials all the phone numbers in the 212 area code can be fined or sued for any of those calls that are made to cell numbers. But if a spammer instead buys (or, more likely, steals) a list of every person with a phone in the 212 area code, and then auto-dials all of those individuals alphabetically, all of the calls are now (probably) legal. It’s a difference without a distinction.
The catch is that robocalls made with an “artificial or prerecorded voice” are still banned, so this new loophole mainly benefits text spammers. It also paves the way for automated predictive dialer calls, which are frequently associated with debt collection scams.
Sadly, Congress missed a chance to prevent this. A proposal to fix the auto-dialer definition was part of an earlier version of the Stopping Bad Robocalls Act, but was inexplicably omitted from the TRACED Act.
4) Old types of telephone fraud come back for another round
A good scam never completely dies. It simply simmers in the background for a while until there is a new generation of suckers who haven’t yet encountered it. And so it is with the extended car warranty robocalls, which first made headlines in 2008 and 2009. They have now resurfaced to become the second-biggest use of telecommunications bandwidth in North America. (The biggest, of course, is streaming the seventh season of The Pregnant Teen Hoarder Housewives of Moline on Hulu.)
Of course, no one is selling real car warranties through illegal robocalling campaigns. These calls are made by thieves, not telemarketers, and the warranty robocalls of a decade ago ended only when several people went to prison for fraud (as described in Chapter 9 of Telephone Terrorism). However, prosecutions have yet to begin against the current batch of callers. Instead, a few civil lawsuits have been filed, seeking damages under the TCPA. (See here, here, and here.) Good luck with that. The defendants’ money has probably already been spent on comic books and guided meditations, so winning a multi-million dollar judgment against them will not yield much of a bounty.
The other type of phone scam that appears to be rebounding this year, aided by the Supreme Court auto-dialer ruling mentioned above, is the bogus debt collection call. This merits a separate post, so I may be writing more here soon.
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