FCC Proposes $116 Million Fine for Scheme Mixing Robocalling, Traffic Pumping, and Attacks on Phone Systems

In its latest salvo to combat illegal robocalling, the FCC proposed a $116 million fine for an alleged scheme mixing robocalling with traffic pumping to fund telephone denial of service attacks (TDoS) against other companies.  In the Matter of Thomas Dorsher, ChariTel Inc., Ontel Inc., and ScammerBlaster Inc., Notice of Apparent Liability, FCC 22-57 (rel. July 14, 2022).  The alleged scheme at issue involved Thomas Dorsher, ChariTel Inc., Ontel Inc., and ScammerBlaster Inc.

As the FCC described it, in a two-month period at the start of 2021, ChariTel made about 10 million prerecorded voice message calls (robocalls) to toll free numbers without the recipients’ consent.  If the recipient did not terminate the call, these robocalls would play the prerecorded message continuously for up to 10 hours, effectively taking a line out of service and costing the toll free service provider an opportunity to talk to actual customers on that line.  Ironically, the robocalls at issue purported to be public service announcements to warn against scam calls, and encouraged recipients to report such calls.

Each of these robocalls generated income for ChariTel as part of its revenue-sharing arrangement with its local voice service provider that terminated the calls, which is the kind of arrangement typically used for traffic pumping.  Dorsher then apparently used this revenue to fund OnTel, which launched TDoS attacks against other companies.  Such attacks are highly dangerous because the disable telephone networks and thus, for example, can disrupt 911 service.  It appears the motivation for the TDoS attacks was to target alleged phone scammers by overwhelming their phone systems, adding to the strange irony in the whole scheme of using unauthorized robocalls and funds from traffic pumping to serve some (alleged) vision of justice.

The FCC’s Bureau Staff investigated 20,650 of the robocalls and verified that they violated the TCPA and FCC rules, and the FCC found the violation was willful and intentional.  Based on the egregiousness of the conduct, the NAL proposes an increased penalty of $5,625 per violation (up from the normal base of $4,500), leading to the total proposed fine of $116 million.  The NAL also concludes that the Thomas Dorsher and ChariTel are directly liable for the violation, finding the evidence supported piercing the corporate veil as to Dorsher, and that OnTel and ScammerBlaster are jointly and severally liable for the penalty, as they were part of a common enterprise and acted as a single business entity.

As this NAL reconfirms, along with its recent opening of an enforcement action against those behind billions of auto warranty robocalls, the FCC, buoyed by the powers given it by the TRACED Act to combat illegal robocalls, is more than serious about this top consumer protection priority.

 

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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