FCC Acts on Serial Spoofing; Warns that TCPA and Wire Fraud Activities Must Cease

At its monthly Open Meeting on June 22, the FCC voted to issue a Notice of Apparent Liability for Forfeiture (NAL) finding that Adrian Abramovich (Abramovich) apparently perpetrated one of the largest spoofed robocall campaigns that the agency has ever investigated. Through its Enforcement Bureau (Bureau), the FCC concurrently released a separate Citation and Order notifying Abramovich of violations of the Telephone Consumer Protection Act (TCPA) as well as the federal wire fraud statute by making illegal telemarketing calls to emergency lines, wireless phones, and residential phones, and that the calls included prerecorded messages falsely claimed affiliation with well-known U.S. travel and hotel companies, thus defrauding unsuspecting consumers receiving these calls.

The FCC has deputized an industry Task Force to formulate strategies to combat spoofing and other forms of harassing robocalls, and the work of that Task Force work continues. However, it is currently technically feasible for an unscrupulous caller to create inaccurate caller ID information that, when deployed, deprives consumers of the ability to make informed decisions about which calls to accept or to determine whether the calling party is reputable or is in fact who they purport to be.  This practice, known as “spoofing” is particularly problematic when combined with illegal robocalls.  And as technology has improved, the FCC’s NAL observes that illegal robocalling campaigns using spoofing have become harder to stop and are more deceptive.

Acting on complaints from travel and hospitality companies and from many consumers, the Bureau investigated Abramovich’s alleged origination of spoofed robocalls that appeared to come from local phone numbers and that offered discounted holiday vacations and cruises to popular destinations in Mexico, the Caribbean, and Florida. The callers claimed to be affiliated with well-known travel and hospitality companies—including TripAdvisor, Expedia, Marriott, and Hilton—but the callers soliciting business instead connected consumers to unaffiliated third parties in an attempt to sell them these vacation packages.

Based on this investigation, it appears that Abramovich’s spoofed numbers were an integral part of the calling scheme for which he received payment. Call records obtained from Abramovich’s underlying carrier showed that between October 2016 and December 2016, Abramovich made 96,758,223 robocalls. These records contained the called number, caller ID number, time stamp, call duration, and the caller’s IP address. Bureau analysis of a representative sample of these calls found that the first six digits of each caller ID number matched the first six out of ten digits of the called consumer—a practice often referred to as “neighbor spoofing” that results in the display of misleading and inaccurate caller ID information. Based upon this large sample, the FCC found that Abramovich apparently knowingly caused the display of inaccurate caller ID information.

The NAL observes that this form of calling is both disruptive and an invasion of privacy, and thus the type of harmful conduct that Congress sought to prevent in enacting the Truth in Caller ID Act.  Also, the misrepresentation that these calls were associated with well-known travel and hospitality companies harmed those companies’ reputations, and spoofing made the calls harder to detect or prevent. The FCC concluded that Abramovich placed these spoofed telemarketing calls with the intent to cause harm, defraud, or wrongfully obtain something of value, thus apparently violating the Truth in Caller ID Act of 2009, as codified in Section 227(e) of the Communications Act of 1934, and Section 64.1604 of the FCC’s rules. These provisions prohibit any person within the United States, in connection with any telecommunications service or Internet Protocol-enabled voice service, to knowingly cause, directly or indirectly, any caller ID service to transmit or display misleading or inaccurate caller ID information with the intent to defraud, cause harm, or wrongfully obtain anything of value.

The Truth in Caller ID Act of 2009 and FCC rules prohibit anyone from falsifying or faking a phone number with the intent to defraud, cause harm, or wrongfully obtain anything of value. Section 227(e) of the Act and the Section 1.80 of the rules also authorize the FCC to impose a forfeiture against any person that engages in unlawful spoofing of up to $11,052 for each spoofing violation, or three times that amount for each day of a continuing violation, up to a statutory maximum of $1,105,241 for any single act or failure to act. The Truth in Caller ID Act empowers the FCC “to proceed expeditiously to stop and . . . assess a forfeiture penalty against, any person or entity engaged in prohibited caller ID spoofing without first issuing a citation” against the violator. This allowed the FCC to issue the Notice of Apparent Liability for spoofing, rather than first issuing a citation about the practice. Given the egregious nature of the conduct in question, the FCC’s forfeiture amount was set at $120,000,000. This is the first time that the full FCC has proposed a forfeiture for spoofing under the Truth in Caller ID Act and the amount of the forfeiture plainly seems to be calibrated to send a strong signal that the FCC is serious about enforcement in mass spoofing and fraudulent calling situations.

The Bureau’s concurrently released Citation provides additional detail as to Abramovich’s robocalling 2016 campaigns. The Bureau investigated the numerous consumer complaints it received about these specific robocalls and each consumer contacted by Bureau staff denied having given consent to receive these telemarketing calls.  As a result, the Bureau concluded that all of the nearly 76 million robocalls placed to wireless phones violated the TCPA’s prohibitions on unauthorized robocalls to wireless phones.  Calls that flooded pagers used as emergency alert devices for medical personnel were also found to violate both the TCPA and FCC rules, as were the telemarketing calls that were placed to residential phone lines without prior express consent.

Section 503(b)(1)(D) of the Communications Act and Section 1.80(a)(5) of the rules permits the FCC to propose a forfeiture against any person who violates the federal wire fraud provisions in Section 1343 of Title 18 of the U.S. Code. Section 1343 states that a violation of the wire fraud statute occurs when a person:

[H]aving devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs signals, pictures, or sounds for the purpose of executing such schemes or artifice. . . .

Under Section 1343, there are two elements to a fraud violation: “(1) a scheme to defraud, and (2) the use of an interstate wire or radio communication to further the scheme.” The Bureau had no trouble determining that there was indeed a scheme to defraud both the parties called with an enticement for “discounted” travel and to defraud known and reputable travel and hospitality companies by appropriating their good names and reputation.  The fact that interstate communications were used in furtherance of the scheme was also plain.

Nevertheless, the FCC lacks the authority to impose proposed forfeitures for these unauthorized and disruptive prerecorded telemarketing calls without first formally notifying the caller that he – or his affiliated companies – violated TCPA and wire fraud statutes. The Citation directed Abramovich to take immediate steps to comply with the TCPA and FCC rules which prohibit making autodialed or prerecorded message calls to emergency phone lines, wireless phones, or residential telephone lines unless the calls are made for emergency purposes or with the prior express consent of the called party. It also directed that Abramovich take immediate steps to comply with the federal wire fraud statute and stated that failure to comply with these laws could lead to liability for significant fines.  Specifically, the FCC may impose sanctions for violation by imposing monetary forfeitures of up to $19,246 per violation of Section 227 and a base forfeiture of $5,000 per violation of wire fraud pursuant to Section 503(b)(1)(D) of the Communications Act.

Abramovich is free to contest the findings in the NAL and he also can request a meeting with the Bureau to discuss the matters covered in its Citation.

The New York Police Department’s Use of Wireless Emergency Alert System to Seek Help in Locating Bombing Suspect: A New Use for these Alerts

Following an explosion in September in the Chelsea neighborhood of New York City and discovery of other unexploded homemade bomb devices, the New York Police Department identified a suspect, Ahmad Khan Rahami, who was sought in connection with the bombings and attempted bombings in Manhattan and New Jersey. For the first time ever in this circumstance, the NYPD used a communications tool initially known as the “Commercial Mobile Alert System” (CMAS) and later renamed to be “Wireless Emergency Alerts” or WEA to function as an electronic wanted poster. This was in contrast to more familiar uses of this emergency communications capability, such as the localized transmission of severe weather advisories or Amber Alerts. Under FCC rules, these alerts are originated by authorized federal, state and local governments, and they currently are used to geographically target 90-character messages that fall into three distinct categories: Presidential, Imminent Threat, and Amber Alerts. Continue reading The New York Police Department’s Use of Wireless Emergency Alert System to Seek Help in Locating Bombing Suspect: A New Use for these Alerts

EAS National Test Deadlines Announced

On July 18, 2016, the Federal Communications Commission (FCC) announced that there will be a nationwide test of the Emergency Alert System (EAS) on September 28, 2016, at 2:20pm Eastern Daylight Time (EDT).  All EAS Participants are required to participate during the National EAS Test, and they must register with the FCC’s new EAS reporting system by August 26, 2016. Continue reading EAS National Test Deadlines Announced

Drinker Biddle Lawyers Contribute to PLI’s 2017 Telecommunications Law Answer Book

Each year, Drinker Biddle lawyers contribute to the Practising Law Institute (PLI) Telecommunications Law Answer Book, an annually published, 600-plus page comprehensive overview of the legal and regulatory issues faced by the telecommunications industry.

Washington, D.C., partner Laura Phillips served as Editor. This year’s contributors include: partners Darren Cahr, Michael Daly, Mark Dever, Seamus Duffy, Eduardo Guzmán, Andrew Kassner and Joanne Lewers; counsel Katherine Armstrong; of counsel Lee Petro and Michael Remington; and associates Anthony Glosson, Cynthia Irani, Camillie Landrón, Nathan PollardJeremiah Posedel, Jennifer Roussil and Patrick Thompson.

The book provides a comprehensive overview of the recent Congressional and FCC initiatives on data privacy and security and the restrictions on foreign ownership of U.S. communications companies regulated by the FCC, as well as other topics, including:

  • A full discussion of the 2015 Open Internet rules, recently upheld by the U.S. Court of Appeals for the D.C. Circuit on June 14, 2016;
  • An update on the FCC’s actions to permit ILECs to retire their copper plants and the consumer information requirements when ILECs reduce or discontinue traditional wireline services;
  • A review of the new rules for radio stations transitioning their public files to an online database;
  • An update on recent social media issues, including ownership of social media accounts and the FTC’s regulation of native advertising practices; and
  • A discussion of the FCC’s recent actions regarding the Incentive Auction, and new opportunities for the experimental use of spectrum.

For more information on the book, please click here.

FCC Gives Advance Notice To Displaced Low Power TV and TV Translator Stations

On May 26, 2016, the FCC’s Media Bureau issued a Public Notice with the stated purpose of providing advance notice of the eligibility standards for Low Power television (“LPTV”) and TV Translator licensees seeking to file displacement applications in a future filing window. With the commencement of the Incentive Auction, the Media Bureau sought to provide permittees sufficient time to construct their authorized facilities if they wish to participate in the first displacement filing window to be opened shortly after the end of the Incentive Auction.

Continue reading FCC Gives Advance Notice To Displaced Low Power TV and TV Translator Stations

FCC Proposes Further Modifications To Broadcaster And Cable Public File Rules

On May 25, 2016, the FCC released a Notice Of Proposed Rulemaking (“NPRM”) seeking comment on two proposed modifications to the local public file requirements for commercial broadcast stations and cable operators. The proposed changes come on the heels of the FCC’s decision in January 2016 to implement the Online Public Inspection File system for radio broadcast stations and cable operators with more than 1,000 subscribers, as well as DBS and satellite radio licensees.

Continue reading FCC Proposes Further Modifications To Broadcaster And Cable Public File Rules

Transition to New Online Public File Database Announced

In an earlier post, we discussed the adoption of rules requiring all radio stations, cable systems, and satellite radio and television licensees to transition their public inspection file onto an online database to be maintained by the Federal Communications Commission (FCC).

On May 12, 2016, the FCC announced the timeline for the migration for the affected parties.  In particular, the following parties will need to commence using the new database on June 24, 2016: Continue reading Transition to New Online Public File Database Announced

Currently Pending FCC Petitions in TCPA Matters

With the TCPA dockets remaining active going into 2016, we decided to put together a list of notable petitions pending at the FCC.  The following list provides details on most petitions that the FCC has yet to rule on, including links to the petition and, where applicable, the public notice, some background on the issues implicated by the petitions, and details on important dates associated with the proceeding.

Nonpublic draft FCC orders on the following petitions are currently on circulation before the Commission for a vote:

Further details on these petitions are included below. Continue reading Currently Pending FCC Petitions in TCPA Matters