On June 9, 2020, the Federal Communications Commission (FCC) proposed a $225 million fine against Texas-based health insurance telemarketers for apparently making more than one billion illegally spoofed robocalls. The FCC news release said the action was the largest proposed fine in the FCC’s 86-year history and reflected the seriousness of the apparent violations by John C. Spiller and Jakob A. Mears, who used business names including Rising Eagle and JSquared Telecom.
Rising Eagle made approximately one billion spoofed robocalls across the country during the first 4½ months of 2019 on behalf of clients that sell short-term, limited-duration health insurance plans. Mr. Spiller admitted to the USTelecom Industry Traceback Group that he knowingly called consumers on the Do Not Call list as he believed that it was more profitable to target these consumers. The FCC’s Enforcement Bureau determined that at one point Rising Eagle used at east 60 spoofed caller IDs and made at least 86,864,456 robocalls to wireless phones as well as 56,635,935 robocalls to numbers listed on the National Do Not Call Registry.
The robocalls falsely claimed to offer health insurance plans from well-known health insurance companies such as Aetna, Blue Cross Blue Shield, Cigna, and UnitedHealth Group. For example, one call stated:
Are you looking for affordable health insurance with benefits from a company you know? Policies have all been reduced nationwide such as Cigna, Blue Cross, Aetna, and United just a quick phone call away. Press 3 to get connected to a licensed agent or press 7 to be added to the Do Not Call list.
If they did press 3, consumers were transferred to a call center with no affiliation to the named companies, where call center representatives then would attempt to convince the consumer to purchase an insurance product sold by one of Rising Eagle’s clients. Rising Eagle’s largest client, Health Advisors of America, was sued by the Missouri Attorney General for telemarketing violations in February 2019.
Beginning in 2018, there was an increase in consumer complaints and robocall traffic related to health insurance and other health care products. The Traceback Group determined that approximately 23.6 million health insurance robocalls were crossing the networks of the four largest wireless carriers each day. The FCC Enforcement Bureau’s investigation found that a large portion of this unwelcome robocall traffic was driven by Rising Eagle.
The Truth in Caller ID Act prohibits manipulating caller ID information with the intent to defraud, cause harm, or wrongfully obtain anything of value. The FCC’s investigation found that the robocalls made by Rising Eagle were spoofed in order to deceive consumers, targeted millions of Do Not Call list participants, and were received on many wireless phones without prior consumer consent. The scam also caused the companies whose caller IDs were spoofed to become overwhelmed with angry call-backs from aggrieved consumers. At least one company was hit with several lawsuits because its number was spoofed, and another was so overwhelmed with calls that its telephone network became unusable.
Illegal robocalls are the FCC’s top complaint. In recent years, the agency has issued a number of very large fines and proposed fines for spoofing violations. In addition, it has permitted phone companies to block suspected malicious robocalls before they get to consumers; led the push for caller ID authentication using STIR/SHAKEN standards; worked to reduce unwanted calls to reassigned numbers; took steps to prevent scam robotexts; and provided many alerts, tips, and other education tools to help consumers protect themselves from scammers. Unfortunately, as two of the five FCC Commissioners pointed out in the Notice, the Department of Justice has lessened the agency’s effectiveness by failing to help collect fines imposed in previous cases.
The proposed action, formally called a Notice of Apparent Liability for Forfeiture, or NAL, contains only allegations that advise a party on how it has apparently violated the law and may set forth a proposed monetary penalty. The Commission may not impose a greater monetary penalty in this case than the amount proposed in the NAL. Neither the allegations nor the proposed sanctions in the NAL are final Commission actions. The party will be given an opportunity to respond and the Commission will consider the party’s submission of evidence and legal arguments before acting further to resolve the matter. More information about robocall regulation is available at: https://www.fcc.gov/spoofed-robocalls.
The FCC’s action against this scheme provides some hope that robocalls can be controlled. But it also spotlights why laws are needed to make illegal robocalling a crime that can be punished by imprisonment.