Number Spoofing Scheme Earns $37.5M Fine for Arizona Telemarketer

The Federal Communications Commission imposed a $37.5 million fine on Tucson-based Affordable Enterprises of Arizona for making illegal calls using a number spoofing scheme to market its home improvement and remodeling services in violation of the Truth in Caller ID Act. Spoofed numbers, calling customers who are on the Do Not Call registry, and sending unwanted text messages can all result in fines.

According to the FCC’s Oct. 27, 2020 press release, the company used unassigned numbers, numbers assigned to “burner phones,” and numbers belonging to Arizona consumers, which would give the appearance of calling from local numbers and to “avoid receiving angry callbacks” when making its illegal telemarketing calls. The company purportedly engaged in the caller ID number spoofing scheme in violation of the Truth in Caller ID Act for 14 months, beginning in 2016.

The FCC’s investigation began with a tip from a former Affordable Enterprises employee who provided information that the company was spoofing numbers, including phone numbers placed on the Do Not Call Registry. The FCC confirmed its findings and imposed the monetary penalty based on a sample of 37,525 spoofed calls in a Forfeiture Order adopted on Oct. 27, 2020.

FCC Chairman Ajit Pai said in a press release that the facts uncovered in the investigation didn’t match up with Affordable Enterprises’ assertion that the company didn’t know that it was violating the Truth in Caller ID Act.

Pai commented, “From the get-go, the company deliberately ensured that its business name wasn’t included in caller ID information by using prepaid phones not registered to its business.”

Although the home improvement company argued that the proposed forfeiture penalty be reduced to .01%, in the amount of $3,752.50, the FCC found that the company’s actions warranted the full statutory penalty be imposed.

Pai remarked in his statement that the “slap on the wrist” requested by Affordable Enterprises was not an appropriate penalty given that the company “brazenly” used the numbers, with one innocent Arizona resident’s number being used 48,349 times, resulting in the number’s owner receiving over five angry calls each day requesting that the telemarketing calls cease.

FCC Commissioner Geoffrey Starks said in a statement, “Affordable clearly intended to obscure its identity, evade detection, and prevent consumers from opting out of future calls.”

What Is Number Spoofing?

Number spoofing is an illegal practice often used by scammers and robocallers. Many scammers use “neighbor spoofing,” which involves the use of phone numbers similar to the one it is calling as consumers are more likely to answer a call from a local number. Scammers often use number spoofing tactics to steal personal and financial information for use in fraudulent activity.

Under the Truth in Caller ID Act, the FCC prohibits companies or individuals from transmitting false caller ID information with the “intent to defraud, cause harm, or wrongly obtain anything of value.”

$10,000 fines can be imposed for each illegal number spoofing violation.

Under the FCC rules, telemarketers must display accurate phone numbers on caller IDs and the company name, if possible. The rules also require that a telephone number be displayed that consumers can call back during business hours to request not to be contacted.

STIR/SHAKEN and the TRACED Act

In an effort to combat illegal number spoofing and robocalls, the FCC has implemented regulations requiring the phone industry to adopt stringent caller ID authentication standards to help protect consumers. Referred to as STIR/SHAKEN, the implementation of the technology would enable phone companies to ensure that caller ID information matches the caller’s actual number.

Additionally, in December 2019, the TRACED Act was signed into law, amplifying the FCC’s efforts to put an end to the rampant practice of illegal robocalls and increase penalties for businesses and scammers who violate the law.

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If you were contacted on your cell phone by a company via an unsolicited text message (text spam) or prerecorded voice message (robocall), you may be eligible for compensation under the Telephone Consumer Protection Act.

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This article is not legal advice. It is presented
for informational purposes only.