FCC Issues $225 Million Fine to Robocallers

Last week, the Federal Communications Commission (FCC) issued the largest fine in its history—$225 million—to telemarketers who allegedly transmitted approximately one billion robocalls, many of them spoofed, to sell short-term health insurance. Spoofing is the illegal practice of a caller deliberately falsifying the Caller ID information transmitted to the call recipient in order to disguise the identity of the caller. According to the FCC, the spoofed robocalls falsely claimed to offer health insurance plans from well-known health insurance companies such as Blue Cross Blue Shield and Cigna.

John C. Spiller and Jakob A. Mears, working under the business names Rising Eagle and JSquared Telecom, transmitted the one billion calls during the first five months of 2019. The FCC reported that Spiller admitted to making millions of spoofed calls per day and knowingly calling consumers on the Do Not Call list because he believed that it would be profitable to target these consumers despite the legal risks. Rising Eagle made the calls on behalf of clients, the largest of which, Health Advisors of America, was sued by the Missouri Attorney General for telemarketing violations in February 2019.

Beginning in 2018, the FCC received an increase in consumer complaints and discovered increased robocall traffic related to health insurance offerings, with approximately 23.6 million such robocalls crossing the networks of the four largest wireless carriers each day. Rising Eagle originated a large portion of this traffic.

The FCC’s investigation found that Rising Eagle spoofed its robocalls for the purpose of deceiving consumers, an act that caused one company who was made to appear as the robocall originator, become deluged with angry call-backs from consumers.

Takeaway: The Truth in Caller ID Act, which is administered by the FCC, prohibits spoofing with the intent to defraud, cause harm or wrongfully obtain anything of value. The FCC’s $225 million fine shows that the agency is determined to enforce this act by issuing fines severe enough to make illegal robocalls an unprofitable activity.

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