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Senators call for new efforts and technology to deter robocalls

In Washington

4:18 pm on Wed, 07.10.13

WASHINGTON – When it comes to stopping pesky robocalls, U.S Sen. Claire McCaskill likens the process to playing Whack-a-Mole in a space that has become a “criminal sandbox” for phone scammers.

At a Senate hearing Wednesday on the robocall plague, McCaskill played excerpts from two of the most infamous such recorded phone calls – the “Rachel from cardholder services” and the “your auto warranty is about to expire” messages – in calling on telecommunications carriers to offer technical solutions to help consumers block such calls.

Fighting Robocalls

* To file a complaint, visit the FTC's online Complaint Assistant or call 1-877-382-4357.

* The FTC offers tips for consumers, as well as two new consumer education videos explaining robocalls and describing what consumers should do when they receive one.

* An interesting graphic on the FTC website explains how illegal robocalls are made

* The website detailing the $50,000 cash bounty for a solution to stop robocalls includes ideas already submitted by consumers. The proposals range from the serious and highly technical, with creative names such as Kill Kall, to simple low-tech whistleblowing: as in get a whistle and blow it.

From To Rachel of Cardholder Services: Why are you still calling? by Mary Delach Leonard | Beacon staff

“The best way is to beat these guys at their own game,” McCaskill told reporters after the hearing of the Senate Subcommittee on Consumer Protection, Product Safety and Insurance, which she chairs. “They are using technology to rip people off. We need to use technology to stop them.”

At the hearing, officials at the Federal Trade Commission and the Federal Communications Commission - which are involved in finding and punishing robocall scammers - said they had stepped up their efforts but might need more authority from Congress to pursue some of the fraudulent robocallers that are based overseas.

Saying that the FTC “is using every tool at its disposal to fight” robocall scammers, Lois Griesman – the agency’s associate director for marketing practices – told senators that “illegal robocalls are still a significant consumer protection problem today, because they repeatedly disturb consumers’ privacy and many of them peddle fraudulent goods and services that cause significant economic harm.”

So far, the FTC has brought 34 cases involving illegal prerecorded calls against 97 companies and 77 individuals, including firms in Arizona and Florida that allegedly were involved in the “Rachel from cardholder services” calls.

Those FTC actions have shut down firms responsible for billions of such robocalls and resulted in $51 million in civil penalties. But Griesman conceded that “increasingly, robocalls that plague consumers are initiated by fraudsters, who often hide out in other countries in an attempt to escape detection and punishment.”

Despite No Call list, robocall complaints rise

Eric Bash, associate chief of the FCC’s Enforcement Bureau, told senators that “the prevalence of these types of robocalls is on the rise” because of the low costs of phone services, the availability of the software needed to make the calls and the ability of callers to “spoof” the number from which they are calling to disguise their real location.

“It is no surprise, then, that robocalls are an increasing source of consumer complaints in recent years at the FCC,” Bash said, “with the number of complaints about the topic doubling in the past two years to over 100,000 filed in 2012.”

Claire McCaskill
Claire McCaskill

In her opening statement, McCaskill said the number of complaints about robocalls in Missouri “have roughly doubled every year since 2009.”

U.S. Sen. Dean Heller, R-Nev., the ranking Republican on the subcommittee, agreed that “people have a right to free themselves from telephone solicitations,” but pointed out that Congress has tried with only limited success to control the problem, passing laws that allowed the FTC in 2003 to create the national Do Not Call registry.

Griesman said that registry, which now lists more than 221 million telephone numbers, “has been tremendously successful in protecting consumers’ privacy from the unwanted calls of tens of thousands of legitimate telemarketers who participate” in the registry.

The problem, officials and senators said, is with the scammers who don’t participate and who use advanced technology to elude detection and penalties.

“As we reach the 10th anniversary of the national Do Not Call registry, I think it’s important to note that this has been – to a degree – a successful government program,” said Heller. But he added that “there has been a noticeable rise in the number of illegal robocalls” in recent years.

Using new technology to block robocalls

New technologies can be used to stop robocalls, senators were told, but the approaches have not yet been widely available in this country. In Canada, however, one telecommunications carrier offers its customers a new approach to block robocalls.

Matthew Stein, chief technology officer at Canada’s Primus Telecommunications Inc., told the Senate panel that his firm invented and started offering its “Telemarketing Guard” service to customers starting in 2007 “in direct response to our customers’ discontent with their inability to control and limit unsolicited calls.”

Also at the hearing, inventor Aaron Foss – who tied for first place in an FTC “Robocall Challenge” competition – explained why he thinks his “Nomorobo” technology would be applied widely to block Robocalls. It uses a system similar to what many robocallers use to make their calls.

He said Nomorobo – which is not yet offered for sale – analyzes the incoming Caller ID and call frequency across multiple phone lines even before the consumer’s phone rings. If Nomorobo detects a robocaller, the call is automatically disconnected. As each call is analyzed, the algorithm updates its “blacklist” of robocallers.

Representatives of the U.S. telecommunications industry said they, too, would like to limit robocalls, but explained that that is easier said than done, given the new technologies and the federal limitations on what they can do. They expressed skepticism about the effectiveness of the Canadian and Nomorobo approaches.

Kevin Rupy, who directs law and policy at the United States Telecom Association, said that carriers face two main legal issues in their effort to limit illegal robocalls. First, phone companies are required by law to “complete phone calls” that are made. Second, there are “substantial privacy issues” because certain robocalls (such as an airline telling passengers that a future flight has been delayed) are permitted, while others are not.

But McCaskill sparred with Rupy and Michael F. Altschul, senior vice president of CTIA-The Wireless Association, about carriers’ limitations in blocking robocalls. She complained afterward that carriers – both for land lines and cellphones – “have not been as aggressive as I hope they would be to try to protect their customers from these kinds of intrusions.”

While McCaskill said she would be open to possible changes in the law that would give more power to the FTC and FCC in going after robocall scammers, she conceded that such enforcement would be tough, especially when the fraudsters operate from abroad.

“Enforcement in this area is a little bit like Whack-a-Mole,” McCaskill told reporters. “While we might increase the penalties and we might increase the jurisdiction or broaden the scope of what kind of activity could be looked at ... at the end of the day, the scamming – the fraud that’s going on – is occurring at floating IP addresses that are located overseas.”

Citing the Canadian example and the promise of “Nomorobo” technology, McCaskill suggested that “the most effective way to stop this is going to be the adoption of technology that is available now that will do a better job of shutting these calls down.

“I would prefer a private-market solution” to the robocall problem, McCaskill said. “similar to what has happened in Canada, where one of the carriers has adopted this technology and used it as a great incentive” to find new customers.

“But I am not averse to looking at other ways of fixing it if these [U.S. carriers] don’t step up and begin to be more aggressive. I don’t think they believe that there is money in it, so it appears to me that they haven’t been willing to work at it very hard.”

Asserting that “there are technologies available now that we ought to be deploying to give consumers voices on every call that comes to their phones,” McCaskill said the bottom line for future consumers should be:

“You shouldn’t have to take any calls from political campaigns or telemarketers or people who are trying to scam you.”

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