FTC reaches settlement in case over hundreds of millions illegal robocalls

FTC reaches settlement in case over hundreds of millions illegal robocalls

technology By Jan 03, 2024 No Comments

FTC Reaches Settlement in Case Over Hundreds of Millions Illegal Robocalls

The Federal Trade Commission (FTC) recently made headlines with a notable settlement. The agreement was reached with Voice over Internet Protocol (VoIP) provider XCast Labs. The FTC alleged that the company was involved in facilitating hundreds of millions of illegal robocalls. This development was announced by the regulator on Tuesday.

Settlement Details

As part of the settlement, XCast Labs agreed to refrain from violating the Telemarking Sales Rule in the future. Additionally, the company committed to implementing a screening process. The company also agreed to end its relationship with firms that do not comply with telemarketing-related laws, as per the FTC‘s requirements.

Civil Penalty and Terms

The settlement also encompassed a significant $10 million civil penalty. However, this penalty was suspended based on the company’s “inability to pay.” It is noteworthy that this penalty will “immediately become due” if the company is “found to have misrepresented its financial condition.”

Regulatory Comments

Samuel Levine, the director of the FTC‘s Bureau of Consumer Protection, expressed a firm stance on the matter. He stated, “XCast was warned several times that illegal robocallers were using its services and did nothing.” Moreover, Levine added, “Companies that turn a blind eye to illegal robocalling should expect to hear from the FTC.”

Response from XCast Labs

In response to the settlement, XCast Labs issued a statement. The company expressed dissatisfaction with the FTC‘s public announcement. They believed it violated the spirit of the settlement. According to the company, the agreement did not involve an admission of violations, but rather a commitment to avoid engaging in the prohibited activities.

Litigation and Regulatory Actions

Notably, the case was litigated by the Department of Justice on behalf of the FTC. The regulatory actions that led to this settlement began in May with the filing of a complaint. This followed letters sent to various VoIP providers, including XCast Labs, in early 2020. The letters served as warnings against assisting illegal telemarketing and robocalling activities, which are prohibited by law.

Allegations Against XCast Labs

Regulatory authorities have alleged that after receiving the warnings, XCast Labs continued to transmit illegal robocalls. These calls were part of organized campaigns aimed at generating telemarketing leads by impersonating officials from the Social Security Administration.

In Conclusion

The settlement between the FTC and XCast Labs sheds light on the regulatory efforts to combat illegal robocalls. This case serves as a reminder of the consequences that companies may face if they fail to comply with telemarketing regulations. Moving forward, it is essential for businesses to prioritize adherence to laws and regulations governing telemarketing practices.

Source: thehill

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