The Federal Communications Commission (FCC) issued its largest fine to date, totaling $299,997,000, in an action against an auto warranty scam robocall operation run by an international network.
According to the FCC, Sumco Panama and related companies and individuals placed over five billion robocalls to consumers in violation of the Telephone Consumer Protection Act (TCPA) and the Truth in Caller ID Act. The enterprise has operated since at least July 2018, the FCC said, and some of its key participants had already been banned from any form of telemarketing in the United States.
Three of the entities contracted with vehicle service contract sellers to identify potential purchasers for vehicle service contracts. To identify potential purchasers, five of the entities placed approximately 5,187,677,000 prerecorded calls to 550,138,650 wireless and residential phones between January 2021 and March 2021. The calls displayed 1,051,461 unique caller IDs.
The calls played seven substantially similar messages that purported to offer consumers the opportunity to extend their existing car warranties, but “[t]he messages were false in almost all respects,” the FCC said, as the calls were really an attempt to sell new vehicle service contracts.
In 2021, the Ohio Attorney General’s Office informed the FCC that it was investigating the operation, triggering the agency’s own investigation and subsequent public notice alerting U.S.-based voice service providers to cease carrying any traffic originating from the entities.
The FCC found that the entities intentionally violated federal law in a host of ways, including calling without consumer consent, failing to provide required disclosures identifying the caller at the beginning of the message, calling consumers on the National Do Not Call Registry and using misleading caller IDs.
To calculate the fine, for which all entities are jointly and severally liable, the FCC randomly selected a subset of 33,333 calls, all of which were illegal, and assessed a base forfeiture of $4,500 per call, totaling $149,998,500.
Additional factors warranted an upward adjustment, including neighbor spoofing, which resulted in an upward adjustment of 100 percent and a total forfeiture amount of $299,997,000.
In a statement accompanying the order, FCC Chair Jessica Rosenworcel said that following the action, the number of auto warranty calls fell by 99 percent.
“I hope … that Congress will consider giving the FCC authority to go to court and collect these fines ourselves,” she said. “In the meantime, we will keep using the tools we have to hold those behind fraudulent calling schemes accountable.”
To read the forfeiture order in In the Matter of Sumco Panama SA, click here.
Why it matters
The FCC continues to reach new heights in fining enterprises that engage in illegal robocall operations. The agency highlighted its joint efforts with the Ohio AG and noted that it signed two additional agreements with the state AGs of Hawaii and New Mexico, reaching a total of 46 state Attorney General partners.