FCC Enforcement Bureau Alert $45M Fine for TCPA/DNC – Traceback Group alerts FCC to violations

February 18, 2022 – Washington, DC.  The Federal Communications Commission (FCC) announced but did not publish that it has issued a Notice of Apparent Liability (the Commish’s version of administrative fine notice) for a staggering $45 Million dollars against a Ft. Lauderdale, Florida company and its principal.   The allegations come against Interstate Brokers, Inc. d/b/a National Health Agents of Ft. Lauderdale, and its principal Gregory Robbins.  FCC Press Releases allude that the business is a lead generator, but online records show that the company seems to be more directly in the insurance industry.  Unlike past FCC NALs, no official copy of the allegations and the FCC’s alleged factual predicate was released with the FCC Press Release.  Historically, the FCC publishes both Press Release and NAL at the same time.  This leaves the public guessing and waiting for the final details as to what happened and how the FCC is approaching the alleged violations and fine calculation.  What is known is sparce.  However, the statement by FCC Chairwoman Jessica Rosenworcel give us a peek at the soon to be publicly released NAL: In the Matter of Gregory Robbins, Interstate Brokers of America LLC, and National Health Agents LLC, Notice of Apparent Liability for Forfeiture, File No. EB-TCD-18-00030995.”

According to Press Release publicists at the Commish, and Chairwoman’s Statement, the case involves pre-recorded messages sent to consumers with “a hard sell, offering health insurance, and trying to take advantage of COVID-19 anxiety anytime anyone answered the phone.”  This “hard” sell seems to have caught the Commish’s Enforcement Bureau’s ire.  However, the discovery of Interstate Brokers’ violation seems to have been the volume of calls it made and complaints traced through the line of call providers from the consumer’s direct provider, not merely an accumulation of complaints to the Commish.  In Commissioner Geoffrey Starks statement, released concurrent with the Official Press Release, another unique aspect of this case can be gleaned: This case began with a Traceback investigation, not the Enforcement Bureau itself.  Commissioner Starks takes special care to thank “the Industry Traceback Group for alerting us to this illegal robocalling campaign.”  The TRACED Act, Public Law 116–105 (DEC. 30, 2019), expanded the FCC’s enforcement powers and tools for acting on TCPA violations. Among these tools were two ideas the then-Chairman Pai had been pushing for several years – mitigation of robocalls at the provider level through STIR/SHAKEN and use of a designated contractor taken from the industry, the TRACEBACK GROUP.  US Telecom, a trade association among various, holds the designation and contract for Tracebacks with the Commish.  As related to the Interstate Brokers NAL, this little “thank you” is telling of where the origin and body of evidence will rest in this Action. It stands to be in the hands of US Telecom, a telecom trade association. 

That’s a game changer for TCPA/DNC plaintiff’s bar in civil class action.  Whereas a drawn-out discovery process is involved in determining the extent, or shallowness of the class of effected consumers, FCC actions completely side-steps that process and actually works the other way around.  Through US Telecom as the designated its Traceback Group consortium, the FCC can take one complaint, trace it to the source and then expand the pool of inquiry to all call traffic transported by various VoIP providers for that call source before it alleges a NAL.  The FCC will always have the drop over any private claim trying to start and build a class-case through the TRACED Act.  The Act’s tool allows the Commish to “see” the volume short-duration calls with the source of consumer complaints in short stead.  Often, the Traceback process begins when a consumer not only complains but provides their terminating recording of the violative call.  Likewise, in ongoing violations by a telephone number, call content can be acquired.  As of recent, VoIP Providers in the chain of transport can also block calls in their network without liability under the Federal Communications Act (FCA) from that telephone number (to box-out calls from that originating end-user) or block the transmitting provider.       

Now back to this newly released NAL Presser.  The FCC alleges Interstate Brokers made 514,196 robocalls to wireless phones and 271 telemarketing robocalls to landline phones in  in apparent violation of the Telephone Consumer Protection Act and DNC rules.  They also state that the violation was determined not based on analysis of all the robocalls made by Interstate Brokers, but on a sampling of 10,000 calls where “some” of the called parties complained of TCPA and DNC violation because of lack of their expressed written consent.  So, the Commish’s investigation obviously has an overall number of 514,467 robocalls, and within the 10,000 calls sampled from that number. In that sample it is clear 271 went to landlines and the rest to wireless phones.  Not clear is whether all 514,467 were made without expressed written consent or is some of those calls were.  The exact number of violative is unclear in the Presser and may or may not be stated in the soon to be released NAL.   What is known from the statements is that “the Bureau reviewed a sample of 10,000 calls, confirmed with the dialing platform provider that the calls were pre-recorded messages, and spoke to several recipients who confirmed they had not provided to consent to be called.  The proposed fine is based on the verified calls.”

Unclear from the FCC’s various statements is whether the FCC initially found all the calls to be intentional.  This is important for two reasons: 1.) the TRACED Act allows the FCC to toll back any investigation or fine four years back in time from the issuance of the NAL, as opposed to the 1 year applicable for other violations under the FCA; and 2.) whether the proposed NAL value is based on triple or enhanced fines for “willful or knowing” conduct under forfeiture guidelines.  That will be interesting to see when the NAL is released.  The FCC’s Pressers focus on the content of the alleged pre-recorded messages that used the COVID-19 virus during a time when the virus is still having outbreak surges alludes to the Commish’s first impression being it was “willful or knowing.”

The coming days will be telling on how this $45 million fine will shape.  Online records show that Interstate Brokers is not a large operation.  Its business appears to be directly in the insurance industry.  Absent the fine details that only the specific allegation of a NAL can give, this is one to watch. In the meantime, the preventative medicine is clear – don’t make telemarketing calls unless you have secured, recorded and enforced policies that ensure the call you are making is to a called party that you have expressed written consent to call in the first place.    

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