Robocall firms facing $225M in fines
FCC seeking to levy record penalties for deceptive tactics
Two Houston companies accused of making 1 billion spoofed robocalls to cellular and landline phone numbers over a fivemonth period are the targets of a record proposed Federal Communications Commission fine and a federal lawsuit from six state attorneys general, including Texas’ Ken Paxton.
In the Tuesday filing, the FCC proposed a fine of $225 million against JSquared Telecom and Rising Eagle, companies based in Houston and run by John C. Spiller and Jakob A. Mears. It would be the highest fine the FCC has levied for robocall violations if approved.
The FCC alleges the robocalls enticed recipients by saying in recordings that lower insurance prices were available from wellknown providers such as Cigna, UnitedHealth Care, Aetna and others. But when recipients responded by hitting a number on their phone keypads, the calls were connected to clients who were selling no-name, short-term health insurance plans.
Similar tactics were also used to sell extended automobile warranties, according to court documents.
The calls appeared on caller ID as though they were coming from numbers the recipients knew, and according to releases from the FCC and the Texas Attorney
General’s office, millions of the numbers were pulled from the federal and state Do Not Call list. The calls were made during the first half of 2019, according to the FCC.
Spiller reportedly told the USTelecom Industry Traceback Group, which provides information to investigators in robocall cases, that he knowingly used the Do Not Call numbers because “it was more profitable to target these consumer,” according to the FCC.
The commission also said that many of those receiving the calls then called back the spoofed numbers, some of which were for individuals and legitimate businesses.
“At least one company was hit with several lawsuits because its number was spoofed, and another
was so overwhelmed with calls that its telephone network became unusable,” the FCC said in a release.
The lawsuit was filed in U.S. District Court for the Southern District of Texas by the attorneys general of Arkansas, Indiana, Michigan, Missouri, North Carolina, Ohio and Texas. It alleges violations of the Telephone Consumer Protection Act as well as anti-robocall and numberspoofing statutes in the participating states.
JSquared Telecom is registered with the FCC as a provider of internet-based phone service, known as voice-over-IP or VoIP. A call placed to a Houston number for JSquared Telecom seeking comment was not immediately returned.
Robocalls and scam calls are the largest category of complaints received by the FCC, with more than 200,000 filed each year, according to the commission’s website. Analysts estimate as many as 4 billion robocalls per month were made in 2018.
A new federal law targeting robocalls was signed by President Donald Trump in January, increasing fines for violations from $1,500 to $10,000 for each illegal call.