FCC makes economic case for shutting down illegal robocalls – CNET

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Jason Schneider

Robocalls aren’t just annoying, they’re also costing American consumers at least $3 billion every year, according to the Federal Communications Commission.

In a blog post Wednesday, the regulatory agency said “illegal robocalls are not just a drain on individual households’ peace of mind, they are also a drain on our economy.” The agency said the most recent data from YouMail suggests that there were 2.5 billion illegal robocalls in March 2019 alone. The FCC estimates that the cost of these calls to consumers is at least $3 billion per year from lost time alone. This estimate is likely low given that it doesn’t include monetary losses from fraud, the agency said.

The blog, written by FCC Chief Economist Babette Boliek and Chief Technology Officer Eric Burger, was published the day before the agency is set to vote on a proposal to give mobile phone companies greater power to block unwanted robocalls.

FCC Chairman Ajit Pai released details of the proposal last month. If adopted, it would allow wireless carriers to block those robocalls for customers by default. Companies would also allow consumers to block calls from unknown numbers themselves. Customers can opt into or out of any blocking services.

The FCC’s focus on these calls comes as Congress expressed frustration with illegal robocalls in April and reintroduced bipartisan legislation called the Telephone Robocall Abuse Criminal Enforcement and Defense, or TRACED Act. The bill would improve enforcement policies, criminalize illegal robocalling and require phone companies to use a new technology that can validate that calls are originating where they claim to be coming from. In addition, the protocol would allow for faster tracing of illegal robocalls. The bill has passed the US Senate and is headed to the House, where it has bipartisan support.

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The number of unwanted robocalls skyrocketed 46% from 2017 to 2018. A January report from Hiya, a caller ID service, said there were 26.3 billion robocalls made in the US in 2018. The number breaks down to an average of 10 monthly calls per person.

The FCC has said frustration over robocalls is the No. 1 complaint it receives from consumers with hundreds of thousands of grievances filed with the agency every year. This latest move by the FCC will allow carriers to block illegal or unwanted calls before they even reach consumers.

Blocking legit calls

Wireless carriers such as AT&T and Verizon have applauded the proposal, stating that allowing them to have more powerful tools could help stem the flow of these calls. But some companies say that the FCC’s policy may be too broad, allowing carriers to block robocalls from legitimate sources by default.

That’s why several trade groups, including ACA International, which represents credit and collection companies, the American Association of Healthcare Administrative Management, the Credit Union National Association and the American Bankers Association met with FCC officials last week to express their concerns.

“Despite the FCC’s very well-intentioned efforts to target these bad actors, the draft Declaratory Ruling is facially overbroad in its attempt to meet the laudable objective of stopping illegal robocalls,” ACA International said in a filing with the FCC. The group said the proposed rules could “mislabel lawful calls as scam or fraud,” which would “allow the blocking of legitimate and needed calls with no notice of the blocking, no required recourse, and no required correction.”

What kinds of calls might be blocked? Automated calls from pharmacies, doctors’ offices, customer service support, and credit card fraud protection alerts, are among the calls that could inadvertently be caught in the automatic call-blocking net, according to attorneys Melissa Gomberg and Erin Kolmansberger of Nelson Mullins Broad and Cassel, who frequently defend companies being sued in class action lawsuits over violations of the Telephone Consumer Protection Act (TCPA).

“There are legitimate reasons to use an auto dialer or to use spoofing,” Gomberg said in an interview. “Doctor’s offices routinely spoof numbers so that the number that shows up when a physician calls a patients isn’t a personal number.”

Callbacks from support centers could also be blocked. She said the FCC policy as written would allow carriers to block these calls by default without ever letting the consumer know that such a call had been attempted, causing patients to miss important health information or consumers waiting for technical support that never comes.

“There’s already a lot of confusion around what’s legal or illegal when it comes to autodialers under the TCPA, and this just adds another layer of complexity,” she added. “Classifying a call as ‘unwanted’ is so subjective.”

At least one FCC commissioner, Michael O’Rielly, understands the nuance of this argument. He’s already warned that allowing carriers to block robocalls by default could have unintended consequences.

“Not all robocalls are illegal or scams, and we must be precise in describing the actual problem at issue,” he said at a House hearing last month. “Many honest, legitimate businesses use automatic dialing technologies to communicate needed information to their customers and doing so is perfectly within the scope and intent of the TCPA [Telephone Consumer Protection Act].”

But officials at the FCC say giving carriers the option to automatically block illegal robocalls without forcing consumers to opt-in for the service is what consumers want and need.

“Inertia is an obstacle for many consumers who otherwise would take part in a call-blocking program,” FCC officials said in the blog post Wednesday. In that blog post, Boliek and Burger explained that smaller service providers have told the agency that convincing consumers to sign up for a call-blocking program rather than offering it by default is too costly and ineffective.

Call-blocking technology provider Hiya estimates that 95% of its customers choose to remain on its opt-out call-blocking program while only 20% choose to join its opt-in program.

“Setting a call-blocking service as the default can significantly increase consumer participation while keeping consumer choice,” the FCC officials said.

By making it harder to reach consumers via robocalls, they argued this will break the economic model that drives scammers to use robocall technology.

“Finally, when phone companies block unwanted calls,” the blog said, “robocall campaigns will be much less economical to inflict on the consumer.”

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