3B
“Congratulations, you won!” have become
words to fear in the age of robocalls. Nearly
every cell phone owner is familiar with the
feeling of answering what looks like a local
number, but hearing a cold, robotic voice
awarding us a free Hawaiian cruise, or
warning us of a vendetta from the IRS.
When taken for face value, robocalls seem
to exist for the sole purpose of malicious
irritation, but a closer look reveals that they
have slithered their way underneath the
innocuous umbrella of direct marketing,
becoming
the
evil
stepbrother
of
advertisement catalogs and emails.
While direct marketing is governed under
three levels of regulation (federal, state and
local), there is a thin line to cross before
abusing the luxury of direct marketing —
thin enough for businesses to have to consult
attorneys just to engage in legitimate direct
marketing practices, such as delivering sales
pitches through mail, phone or email.
Robocalls have been a source of nuisance,
deception and con artists for decades. In
1991, the federal government passed the
Telephone Consumer Protection Act to
regulate telemarketers and attempt to
terminate fraudulent activity. It prohibited
solicitation by autodialers, unsolicited fax
marketing, calls before 8 a.m. and after 9
p.m., and calls to those who have indicated
they would not like to be called again. The
Federal
Communications
Commission
does not award mercy to those who violate
the TCPA. Last year, the FCC slapped a
$120 million fine on Adrian Abramovich
of Miami, who flooded consumers with 97
million phone calls promoting illegitimate
travel deals using an autodialer. It was the
largest fine to date.
But
even
more
powerful
than
the FCC’s newly found authority to
regulate telemarketers is the consumer
empowerment
that
came
with
the
legislation: TCPA also gave consumers a
way to personally pursue a case against a
telemarketer that they believe has violated
the law. An individual can earn up to $500
per violation that they have experienced,
and if caught by the FTC, telemarketers can
be liable for $10,000 per violation.
But being caught is a tough bet in the
industry. Because small illegal operations
either run on anonymity or are based
overseas, tracking robocallers’ assets is
one of the biggest pain points in trying to
stop this fraudulent practice. Many times,
operations are so small that, when fined,
they are unable to even pay the full penalty.
As of three weeks ago, the FCC announced
that they have fined robocallers $208
million, but have only been able to collect
$6,790.
With the TCPA now being the No. 1
lawsuit filed in the U.S., comedian John
Oliver has a point: Hatred of robocalls may
just be “the only thing everyone in America
agrees on.” But the problem is only getting
worse. According to Robocall Index,
there are roughly 170 million robocalls
made per day, and it continues on an
incline. Mobile scam calls made up
3.7 percent of total calls in 2017, 29.2
percent in 2018, and that number is
now projected to reach roughly 45
percent before the end of this year.
But robocalls are not solely used
for deception: We rely on automated
calls from our hospitals and dentists
reminding
us
of
appointments,
pharmacies
notifying
us
about
medication refills, school districts
announcing snow days and banks
alerting us of fraud. And while
federal law requires that companies
cannot conduct robocalls without
giving consent, most of us have opted
into them without realizing it — in
the lengthy terms of service box
we habitually check before using a
product or service.
Nevertheless, the robocall ratio
of necessary to unnecessary is
remarkably lopsided. In the pursuit
to combat robocalls and profit,
cell phone providers (e.g. AT&T,
Verizon Wireless) and third party
apps (e.g. Nomorobo, Hiya) are
charging monthly fees to help fend off
robocallers. They detect repeating-
digit numbers (i.e. 222-222-2222),
numbers with more than 10 digits,
and, the latest tactic, neighborhood
spoofing:
suspiciously
similar
phone
numbers to those of our neighbors.
The
annoyance
of
robocalls
has
expanded to our inboxes with the rise of
email. In 2003, the federal government
also cracked down on unsolicited emails
by passing legislation called “Controlling
the Assault of Non-Solicited Pornography
and Marketing Act,” or CAN-SPAM. While
the government was originally relaxed
about email marketing due to its free
receipt, easy discarding and legalphysical
mailbox spam, it began cracking down on
misleading emails, demanding only truthful
and straightforward content in order to
prevent spam from turning to scam. That
same year, robo regulation continued as the
government established a national Do Not
Call registry.
Despite more entities cracking down
and more legislation being passed, the fact
of the matter is that becoming a robocaller
and getting away with it is fairly simple.
Downloading
software
only
requires
internet access and a computer, and the cost
is typically less than a penny per call.
And while scammers can see windfalls
when consumers naively fork over their
credit card numbers to purchase illegitimate
services, they can also make incremental
income just by calling phone numbers that
provide caller ID. These IDs originate from
databases that try to identify who is calling,
and when a caller’s name is displayed, phone
companies pay small fees to databases
that store the names, and occasionally to
the caller himself as well. These fees can
sometimes even be enough to offset the cost
of making the calls in the first place.
While we can appreciate the government’s
endeavors to double down on this issue,
there is another layer of complexity to
consider: the honest victims who get caught
in the fishnet.
Since the TCPA is what’s called a strict
liability statute, one harmless mistake
can result in a violation — no exceptions.
And since 100,000 phone numbers are
reassigned every day, it isn’t hard for well-
intentioned companies to accidentally call
the “wrong person,” or rather, the new
owner of a subscribing phone number. If the
new call recipient brings the call to court, it
could cost the company.
Three weeks ago, Roger Meiners, a
professor at University of Texas-Arlington,
proposed a novel solution that quickly
gained traction online: the “Penny for
Sanity Tax” or a 1-cent tax on every call
made. The five billion robocalls made this
past year would cost $50 million — a notable
government incentive to act. Because
targeting individual robocallers is virtually
impossible, the tax would apply to all calls
to affect any caller in the U.S., robo or
real. Because society is moving away from
frequent calling, the tax would hardly affect
common man’s wallet. The average adult
makes six calls a day, meaning a mere $1.80
a month. Once you get past the idea of yet
another tax, this could be our silver bullet.
While the FCC works day and night to
combat this incessant issue, it came to a
head last week when federal investigators
unearthed Operation Brace Yourself, one of
the biggest health care scams in U.S. history,
amounting to $1.2 billion. The Department
of Justice has charged 24 people from New
Jersey to California after telemarketers
in the Philippines and Latin America
advertised “free” orthopedic braces to
those newly eligible for Medicare in the U.S.
Doctors deliberately wrote prescriptions for
braces that patients never asked for, and sold
the prescriptions to brace manufacturers
who then billed Medicare anywhere $500
to $900 for each brace. After processing,
doctors were given kickbacks of roughly
$300 per brace. Needless to say, it did not
pay off.
Whether it’s through the Penny for
Sanity Tax or another round of legislation,
robocalls may remain the FCC’s top priority
for a while.
You can protect yourself from robocalls
by signing up your mobile phone on the Do
Not Call Registry at www.donotcall.gov,
and refraining from answering any phone
number that mimics the first 4-6 digits of
your phone number.
Wednesday, April 17, 2019 // The Statement
3B
BY ROMY SHARMA, STATEMENT COLUMNIST
The business case for robocalls
ILLUSTRATION BY CHRISTINE JEGARL