VoIP Firm XCast Agrees to Settle $10m Illegal Robocall Case

A Californian VoIP provider has agreed to settle FTC charges that it facilitated hundreds of millions of illegal robocalls made over its network.

XCast Labs was warned several times by the consumer rights agency that robocallers were illegally using its services to bombard victims with nuisance calls, but did nothing, according to Samuel Levine, director of the FTC’s Bureau of Consumer Protection.

“Companies that turn a blind eye to illegal robocalling should expect to hear from the FTC,” he added.

An FTC complaint issued in May 2023 revealed that the agency sent Los Angeles-based XCast and several other VoIP companies letters as far back as 2020 warning them about enabling illegal robocalls.

Read more on robocalls: FTC Busts $110m Charity Fraud Operation

The civil enforcement action alleged that many of these hundreds of millions of calls were made to people on the National Do Not Call (DNC) Registry. They included scam calls impersonating government agencies such as the Social Security Administration and others containing “false or misleading statements to induce purchases.”

Some of the calls used fake caller ID information to trick victims, it added.

The proposed order XCast has agreed to will prevent the firm from violating the Telemarketing Sales Rule and bans it from assisting “high-risk customers” such as those using VoIP for robocalling, calling numbers on the DNC registry or using spoofed Caller ID.

XCast Labs will also be forced to screen existing and prospective customers to ensure they aren’t breaking telemarketing laws, and cease providing services that don’t pass this process.

The firm is banned from servicing customers who don’t have an automated way to block calls displaying invalid Caller ID numbers or that aren’t authenticated through the FCC’s STIR/SHAKEN Authentication Framework.

A $10m civil penalty was also levied but is currently suspended as XCast said it can’t afford to pay.

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