Updated: Jun 2, 2022
The US Federal Trade Commission (FTC), on February 14th, 2022, announced that it will take legal action against Voice-over-Internet Protocol (VoIP) service providers who do not turn over required information during robocall investigations.
VoIP is the technology that allows phone calls over a broadband internet connection. Businesses use VoIP services to communicate with employees and customers because it can be more convenient and less expensive than landline services. However, billions of illegal telemarketing calls and robocalls pass through VoIP service providers every year. The Commission investigates this and frequently issues Civil investigative Demands (CIDs) to VoIP service providers to collect information regarding the matter, and ultimately, help stop the large volume of illegal calls affecting Americans.
VoIP service providers have not been producing enough of the required information and are struggling to comply with the CIDs. As a result, the Commission is cracking down on VoIP service providers. Providers are now being taken to federal court to compel compliance. The FTC issued two orders [1, 2] to California companies XCast Labs, Inc and Deltracon, Inc respectively. In December of 2020, the FTC sued Alcazar Networks, Inc and was permanently banned from assisting telemarketers or overseas customers with dialing robocalls or calls to phone numbers on the DNC Registry. The maximum penalty for each intentional robocall was also raised to $10,000, in addition to the FCC-proposed forfeiture penalty amount.
While most financial institutions are not VoIP service providers, many use them, and therefore can be liable and responsible for activities or bad actions by those providers. Even if your institution does not use VoIP systems, but you have third-parties you do business with that do, diligence and awareness of the risks involved is paramount.
The intricacies of compliance can be overwhelming. At Firstline Compliance, we strive to manage the complexities of regulatory compliance and act as a strategic partner to your company to offer expertise for all regulatory requirements and deadlines. Contact us at (831) 325-3369 or firstname.lastname@example.org if we can help.