- Mitigating Liability for VoIP Customers’ Illegal Robocalls
VoIP service providers are increasingly finding themselves at the center of legal, financial, and reputational storms due to their inadvertent role in transmitting illegal robocall traffic. A prime example is Lingo Telecom LLC (“Lingo”), a provider currently embroiled not only in an FCC investigation, but in litigation, accused of failing to prevent misuse of its services to send robocalls to thousands of New Hampshire residents, falsely insinuating that they could lose their ability to vote if they participated in the New Hampshire Primary.
In the Complaint, plaintiffs claim that, “Defendants orchestrated a deceitful and malicious scheme, bolstered by artificial intelligence and caller ID spoofing, to suppress Democratic voter participation in the New Hampshire Primary.” Moreover, the caller identification information showed that the calls were coming from the phone number of a former New Hampshire Democratic Party chair. Plaintiffs further allege that,
Life Corp and Lingo were aware or should have been aware of the false information reflected in the call but nevertheless failed to prevent the message’s broadcast… Lingo also provided false attestations for the calls, disguising the identity of the caller and thereby adding to the deception… Lingo provided certain of the illegal calls A-level STIR/SHAKEN attestations, which asserted that Life Corp had the legal right to utilize the phone number that appeared on recipients’ caller IDs.
The legal risks for VoIP providers in similar situations are substantial. Under U.S. law, particularly the Telephone Consumer Protection Act (TCPA), service providers can be held liable for facilitating unwanted calls, even without direct involvement in the scams themselves. This liability extends not only to federal regulations enforced by the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC) but also to actions brought by state attorneys general and private litigants. For instance, VoIP providers can face severe penalties, with fines reaching up to $1,500 per illegal call under the TCPA.
Besides the direct costs of fines and penalties, companies like Lingo face enormous legal fees and potential settlement costs. The situation is exacerbated by the fact that the actual fraudsters are often based overseas or are insolvent, leaving service providers as the “deep pockets” targeted by litigation or enforcement.
The reputational damage is also significant. Being dragged through public investigation and litigation, especially with accusations as serious as conspiring to violate election laws, can tarnish a company’s image, undermine customer trust, and deter potential business partnerships. This stigma can linger long after any legal issues are resolved, impacting customer relationships and market position.
Companies across the industry must navigate the complex interplay of ensuring robust KYC procedures while also staying vigilant against misuse by sophisticated fraudsters. The challenge lies in balancing the need for accessible communication services with the imperative to block illegal activities effectively.
- Do Pure Resellers and small VoIP Providers Need to Register in the Robocall Mitigation Database Before May 28?
We would like to inform all U.S. providers, regardless of whether they are required to implement STIR/SHAKEN, of the requirement to register in the Robocall Mitigation Database and have an up-to-date certification and a robocall mitigation plan on file. There is no safe harbor for small providers or pure resellers, and sole reliance on the upstream provider for robocall mitigation is not a compliant solution.
The Robocall Mitigation Database filing must contain disclosures newly mandated by the FCC as of this year. Failing to update the filing in 2024 could be seen by the FCC as a sign of apparent noncompliance.
The FCC has been on the quest to remove providers with deficient certifications and robocall mitigation plans from the Robocall Mitigation Database with actions taken in February and March and expected to continue.
Removal of a provider from the Robocall Mitigation Database forces intermediate providers and voice service providers to block its traffic under the FCC rules. Reinstatement after removal is both costly and time-consuming, often taking up to a year. During this period, the provider would effectively be stripped of the opportunity to conduct business.
Starting May 28 of this year, failure to register in the Robocall Mitigation Database will also result in other providers blocking traffic from the unregistered provider. We understand the challenges this may pose and encourage providers to proactively adhere to these guidelines to avoid disruptions to their operations.
Conclusion
As the regulatory landscape continues to evolve, with potential tightening of rules around robocalls and increased enforcement actions, VoIP providers must enhance their compliance frameworks and invest in advanced analytics to detect and prevent abuse. Collaboration with regulators and industry peers may also prove beneficial in developing standardized practices that protect providers and consumers alike.
While VoIP service providers play a crucial role in modern communications, the risks associated with inadvertently facilitating illegal robocall traffic are considerable. These risks demand vigilant compliance and proactive engagement with regulatory trends to mitigate legal, financial, and reputational harms.
NEED HELP WITH ROBOCALL MITIGATION, COMPLIANCE AND LITIGATION SUPPORT/DEFENSE AGAINST BUSINESS & LEGAL CHALLENGES?
The CommLaw Group Can Help!
Given the complexity and evolving nature of the FCC’s rules, regulations and industry policies & procedures around Robocall Mitigation and Compliance issues (e.g., Stir/Shaken, TRACED Act, FCC Rules & Regulations, US Telecom Industry group, ATIS, NECA, VoIP Numbering Waivers, Know Your Customer and the private sector ecosystem), as well as the increased risk of business disputes, consumer protection enforcement by state attorneys general, and even civil litigation, and anticipating the potential torrent of client questions and concerns, The CommLaw Group formed a “Robocall Mitigation Response Team” to help clients (old and new) tackle their unique responsibilities.
CONTACT US NOW, WE ARE STANDING BY TO GUIDE YOUR COMPANY’S COMPLIANCE EFFORTS
Michael Donahue — Tel: 703-714-1319 / E-mail: mpd@CommLawGroup.com
Rob Jackson – Tel: 703-714-1316 / E-mail: rhj@CommLawGroup.com
Ron Quirk – Tel: 703-714-1305 / E-mail: req@CommLawGroup.com
Diana James – Tel: 703 663-6757 / E-mail: daj@CommLawGroup.com
