A new report is warning of an explosion in scam robocalls that cost Americans billions of dollars every year, and is recommending that some specific affirmative actions be taken to attack the threat.
The report comes from the Electronic Privacy Information Center and the National Consumer Law Center.
Their report explains why the scam robocalls are a problem, how the Federal Communications Commission has responded and what still must be done to address the “deluge of scam robocalls.”
The organizations recommend:
“Requiring all providers in the call path to engage in effective, affirmative mitigation of illegal robocalls; imposing clear financial consequences on providers who knew or should have known that they were transmitting illegal robocalls; and making information about the sources of illegal robocalls and complicit providers publicly accessible.”
The report explains each month, there are more than a billion scam robocalls that are intended by those who originate them to steal money from unsuspecting telephone subscribers.
They are possible because the providers, “typically small, pop-up VoIP telephone providers,” open the door to the system.
“Every answered scam robocall pays money to those providers, as well as to every telephone service provider in the call path,” the report explains.
“Even when these providers are told—sometimes repeatedly—that they are transmitting fraudulent calls, they keep doing it, because they are making money from these calls. And even when they are caught and told to stop, they are not criminally prosecuted, and the fines that are levied are rarely collected,” the report acknowledged.
“Illegal robocalls will continue so long as those initiating and facilitating them can get away with and profit from it,” explained FCC Commissioner Geoffrey Starks.
The report notes the essence of the industry is to scare consumers with fraudulent claims that there are serious threats that can only be solved with hundreds or thousands of dollars.
“Typical frauds include calls scaring seniors into believing that unless they turn over thousands of dollars they will lose access to their Social Security or Medicare benefits; threats to immigrants that if they don’t pay the caller they will be deported; and calls in which the recipient is tricked into believing they have been refunded too much money by Amazon or Apple, requesting that the excess be returned,” the report explains.
“Other typical scams include selling phony health insurance, calls purporting to be from the IRS, student loan scams, threats of arrest, debt reduction scams, and scam telemarketing calls (such as the ubiquitous auto warranty call).”
Often the scammers will instruct the intended victims to purchase stacks of gift cards and turn them over, even to address a debt to the government, something that would be completely out of the ordinary.
Now that smart phones are more or less ubiquitous, such scams also are delivered by texting.
“Last year almost 60 million Americans lost over $29 billion to these scam callers. More than one million complaints were made to the FTC about scams from calls and texts,” the report said.
That’s even though by now the problem is so pervasive that 70% of Americans refuse to answer calls from numbers they don’t recognize, the report said. “This increases costs for health care providers, small and large businesses, and their call recipients, who miss or incur delays in receiving time-critical communications for fear of answering a robocaller.”
One contributor is the fact, the report explains, that the American telephone system is deregulated.
That means, “Multiple providers transmit calls from the caller to the called party. Each transfer of the calls from one provider to the next involves a separate agreement between the providers, which determines the price the upstream provider will pay the next downstream provider to transfer the calls.”
“This process also allows downstream providers to refuse to take calls from upstream providers if they do not like the price offered for the transmittal, or if they deem the calls potentially illegal – and thus too costly,” the report said. “Another cause is the development of VoIP (a technology that accesses the telephone network through the internet), which allows callers to reach U.S. telephone subscribers with minimal expense.”
The report also noted such calls use spoofed caller ID numbers.
So far, neither the Telephone Consumer Protection Act of 1991, nor the actions of the FCC has solved the problem, the report said.
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