Articles Posted in FCC Enforcement

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

  • Broadcasters Fined for Late-Filed Issues/Programs Lists
  • Cable Sports Network Receives Proposed Fine of $20,000 for EAS Violation
  • FCC Enters Consent Decrees with Wireless Providers for Engaging in Prohibited Communications During Spectrum Auction

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

  • FCC Asserts Violation of Prohibition Against Owning Two Top-Four Stations in the Same Market and Proposes $518,283 Fine
  • FCC Admonishes Indiana Broadcaster for Failing to Timely File License Renewal Application
  • Noncommercial Broadcaster Fined $9,000 for Late-Filed Issues/Programs Lists

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

  • Online Drone Retailer Fined Nearly $3 Million for Marketing Unauthorized Devices
  • FCC Denies Motion to Quash Letter of Inquiry Concerning Unauthorized Operation of Nevada LPFM Station
  • Unauthorized License Transfers Lead to $104,000 Consent Decree for New Jersey Water Service Company

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

  • FCC Fines Colorado Wireless Operators for Use of Unauthorized Equipment and Unauthorized Operations
  • VoIP Provider Enters Into Consent Decree With $180,000 Penalty Over Failure to Meet FCC Filing Requirements
  • FCC Investigates Colorado Manufacturer’s Unauthorized Signal Booster

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others. This month’s issue includes:

  • FCC Fines Long-Distance Carrier $4.1 Million Over Cramming and Slamming Violations
  • Wireless Internet Service Provider’s Unauthorized Operations Lead to Consent Decree
  • Mississippi and Michigan Radio Station Licensees Admonished for Late License Renewal Filings

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

  • Texas-Based Telemarketers Fined Record $225 Million for Robocall Campaign
  • Georgia AM License Renewal Designated for Hearing Over Extended Periods of Silence
  • Public File Violations Lead to Consent Decree for Arkansas Noncommercial FM Station

FCC Issues Record Fine of $225 Million Against Texas-Based Telemarketers for Illegal Robocalls

The FCC recently issued a $225 million fine, the largest in its history, against a Texas company and its owners for transmitting approximately one billion robocalls, many of which were illegally spoofed.

The Truth in Caller ID Act, codified at Section 227(e) of the Communications Act of 1934, and Section 64.1604 of the FCC’s Rules, prohibits using a caller ID service to “knowingly transmit misleading or inaccurate caller identification information with the intent to defraud, cause harm, or wrongfully obtain anything of value”—a practice known as “spoofing.”  Additionally, the Telephone Consumer Protection Act (TCPA), and the FCC’s implementing rules, prohibit prerecorded voice messages to wireless telephone numbers absent the subscriber’s express consent unless the call is for an emergency purpose.

In September 2018, a telecommunications industry trade group provided information to the FCC’s Enforcement Bureau regarding millions of robocalls that had been transmitted over its members’ networks.  The trade group estimated that 23.6 million health insurance robocalls crossed the network of the four largest wireless carriers each day and that many, possibly all, of those robocalls contained false caller ID information.  In response, the Bureau began an investigation to determine the origin of the spoofed robocalls.

The FCC found that many of the calls included false or misleading information about the identity of the caller and that the Texas company made the spoofed calls on behalf of its health care industry clients.  The pre-recorded messages at issue claimed to offer health insurance from well-known health insurance providers such as Aetna, Blue Cross Blue Shield, Cigna, and UnitedHealth Group, yet the FCC found no evidence that the company had any connection with these providers.  Part of the FCC’s findings were based upon recorded conversations between the owners, which included numerous discussions of the company’s robocalling operations, from a roughly three-month period when one of the owners was incarcerated for an unrelated matter.

Between January and May 2019, the company made more than one billion robocalls to American and Canadian consumers on behalf of its clients, a portion of which the Enforcement Bureau reviewed and confirmed were spoofed.  The trade group followed up with the company directly multiple times in 2019 to notify the owners that the robocalls appeared to violate prohibitions against unsolicited telemarketing calls and malicious spoofing.  In response, one of the company owners admitted to making millions of robocalls daily and even admitted to making calls to numbers registered to the Do Not Call Registry in an effort to increase sales.  Although the company informed the trade group that it ceased spoofing caller ID information in September 2019, the robocalls continued.

In June 2020, the FCC issued a Notice of Apparent Liability (NAL), proposing a $225 million fine against the company for violating the Communications Act and the FCC’s rules by spoofing caller ID information with the intent to cause harm and wrongfully obtain something of value.  The company responded to the NAL, claiming that: (1) it did not itself initiate any calls because it was acting as a technology consultant for its client’s calling campaigns; (2) it had only a limited role in the robocall campaigns, did not draft the messages, and believed that it had consent and therefore did not intend to defraud, cause harm, or wrongfully obtain anything of value; (3) the NAL impermissibly lumped the owners and the company (and its affiliates) together rather than attributing wrongful conduct to each party; (4) the owners cannot be held personally liable; and (5) the FCC failed to consider the company’s inability to pay and lack of any prior violations.

The FCC considered but was ultimately not persuaded by any of the company’s arguments.  In issuing the $225 million fine, the FCC noted that, among other things, the company did not contest that it spoofed more than 500 million calls and thus knowingly caused the display of inaccurate caller ID information.  While the company argued that it had only a limited role in initiating these calls, as it was acting in accordance with its client’s wishes, the FCC found that, even if the company was acting at a client’s request, it still knowingly agreed to display the inaccurate information.  The FCC also found that the company acted with wrongful intent by executing a telemarketing campaign in which call recipients were deceived by offers of health insurance from well-known providers.  Because the calls were spoofed, consumers could not identify the caller or easily choose to ignore or block the call and therefore the FCC concluded that the company employed spoofing in furtherance of the fraudulent scheme.

With respect to the owners’ personal liability, the FCC’s analysis of the company’s corporate structure and the public policy implications of broadly shielding individuals from liability for evading legal obligations led the FCC to conclude that it was necessary to hold the owners liable for their actions as officers of the company.  The FCC also distinguished this case from past decisions supporting reductions of proposed fines, noting that the decisions cited by the company did not involve spoofing.  Finally, the FCC noted that the company failed to provide the financial information required to support a claim of inability to pay.

The $225 million fine must now be paid within 30 days following release of the Order.  The FCC noted that if it is not paid within that time, the matter may be referred to the U.S. Department of Justice for enforcement.

Extended Periods of Silence Lead to Hearing Designation Order for Georgia AM Station

The Media Bureau has designated for hearing the license renewal application of a Georgia AM station based on the station’s extended periods of silence during the most recent license term.

Under Section 312(g) of the Communications Act of 1934, a station’s license automatically expires if the station “fails to transmit broadcast signals for any consecutive 12-month period.”  Where silent stations resume operations for only a short-period of time before the one-year limit passes, the FCC has cautioned that such stations will face a “very heavy burden in demonstrating that [they have] served the public interest,” noting that extended periods of silence are an inefficient use of the nation’s limited broadcast spectrum.

Section 309(k)(1) of the Communications Act provides that in determining whether to grant a license renewal application, the FCC must consider whether, in the previous license term, the licensee: (1) served the public interest; (2) has not committed any serious violations of the Act or of the FCC’s rules; and (3) has not committed other violations that, taken together, would constitute a pattern of abuse.  If the licensee falls short of this standard, the FCC can either grant the renewal application with conditions, including an abbreviated license term, or deny it after a hearing to more closely examine the station’s performance. Continue reading →

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

  • Imprisoned Former Alabama House Speaker’s Felony Convictions Lead to FCC Hearing on Character Issues
  • California Retirement Home Receives Notice of Violation Over Signal Booster Interference
  • Georgia LPFM Station Hit with $10,000 Penalty for Underwriting Violations

Imprisoned Former Alabama House Speaker’s Felony Convictions Raise Questions About FCC Qualifications

The FCC has designated for hearing the question of whether an Alabama radio broadcaster remains qualified to hold Commission licenses.  The licensee’s president and sole shareholder was convicted of six felony charges involving conduct during his time as Speaker of the Alabama House of Representatives.

Section 309 of the Communications Act of 1934 requires the FCC to designate an application for hearing before an Administrative Law Judge (ALJ) if a “substantial and material question of fact is presented” as to whether grant of an application would serve the public interest, convenience, and necessity.

The character of an applicant is one of several factors examined by the FCC in determining whether a party has the requisite qualifications to become or remain a Commission licensee.  Moreover, an FCC policy (referred to as the Jefferson Radio policy, after a 1964 case) generally prohibits the FCC from granting assignment applications where character questions have been raised regarding the seller.  The theory behind this policy is that a party unqualified to hold an FCC license should not be allowed to profit by selling it.

After a June 2016 trial and multiple appeals, the Alabama Supreme Court upheld six felony convictions against the former Speaker for: (1) soliciting or receiving something of value from a principal; (2) using an official position for personal gain; and (3) representing a business entity before an executive department or agency in exchange for compensation.  Following the court’s decision, and facing a potential four-year prison sentence, the licensee filed an application in September 2020 for consent to assign its FCC authorizations, including AM and FM station licenses, three FM translator licenses, and a construction permit for a new FM translator station.

Prior to filing the assignment application, the licensee had also filed applications for renewal of the AM, FM, and translator station licenses.  In these applications, the licensee disclosed the status of the legal proceedings against the former Speaker.  The FCC considers a felony conviction or misconduct constituting a felony as relevant to its character assessment and ultimately to its determination of whether to grant an application.  The FCC concluded that the former Speaker’s six felony convictions and the actions behind them established a substantial and material question of fact as to whether the licensee, by virtue of the former Speaker’s position as president and sole shareholder, possesses the requisite qualities to hold a Commission license.  As a result, the FCC designated for hearing the questions of whether (1) the licensee has the character to remain a Commission licensee; (2) the licensee’s authorizations should be revoked altogether; and (3) the pending construction permit application should be granted, denied, or dismissed.

Regarding the assignment application, the licensee requested that the FCC apply an exception to its Jefferson Radio policy and grant the application despite the pending character qualification issues.  While the FCC has in limited circumstances found an exception to be warranted, the Commission has generally applied the policy to deter stations from committing violations and then simply selling their assets when faced with potential disqualification.  The FCC found that in the present case, numerous factors weighed against an exception, including the fact that the market is not underserved, as listeners have access to several other broadcast stations, and the lack of any physical or mental disability or other circumstance that would prevent the licensee from fully participating in the hearing.

In light of the pending character concerns, the FCC temporarily set aside consideration of the license renewal and assignment applications until such time as the character questions can be resolved through an administrative hearing before an ALJ.

FCC Investigates California Retirement Community Over Unauthorized Operation of Signal Booster Devices

The FCC’s Enforcement Bureau issued a Notice of Violation to a Bay Area retirement community for interference complaints related to its Private Land Mobile Radio (PLMR) operations.

PLMR operations are wireless communications systems used by many local governments and private companies to meet a variety of organizational communications needs.  These systems have been used to support everything from public safety and utilities to manufacturing and certain internal business communications, and often operate on shared frequencies with other PLMR licensees. Continue reading →

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

  • Idaho Man Behind Racist Robocall Campaigns Fined $9.9 Million for Thousands of Illegally Spoofed Robocalls
  • FCC Affirms $233,000 Fine Against Large Radio Group for Sponsorship ID Violations
  • FCC Proposes a Combined $47 Million in Fines Against EBS Licensees for Failure to Meet Now-Defunct Educational Requirements

Scammer Hit With $9.9 Million Fine for Thousands of Illegally Spoofed Calls
The FCC recently issued a $9.9 million fine against an Idaho man behind a controversial media company linked to various racist and anti-Semitic robocall campaigns across the country.  The man caused thousands of robocalls to display misleading or inaccurate caller ID information—a practice known as “spoofing.”

The Truth in Caller ID Act, codified at Section 227(e) of the Communications Act and Section 64.1604 of the FCC’s Rules, prohibits the use of a caller ID service to transmit or display misleading caller ID information with the intent to knowingly cause harm or wrongfully obtain something of value.

During the summer and fall of 2018, individuals across the country received thousands of robocalls targeting several contested political campaigns and controversial local news events.  In August 2018, for example, Iowa residents received 837 prerecorded messages referring to the arrest of an undocumented immigrant from Mexico charged with the murder of a University of Iowa student.  More than 1,000 residents in Georgia and Florida received calls making racist attacks against the gubernatorial candidates running in those states.  In response to complaints received about the robocalls, the FCC traced 6,455 spoofed calls to the Idaho man and his media company after identifying the dialing platform he used to make the calls.  By matching the platform’s call records with news coverage of the calling campaigns, the Enforcement Bureau identified six specific robocall campaigns in California, Florida, Georgia, Iowa, Idaho and Virginia.  Using the platform, the man selected phone numbers that matched the locality of the call recipients to falsely suggest that the calls were local.

In January 2020, the FCC issued a Notice of Apparent Liability (NAL), proposing a $12.9 million fine against the man for violating the Communications Act and the FCC’s Rules by spoofing caller ID information with the intent to cause harm or wrongfully obtain something of value.  In response, the man called for cancellation of the NAL, claiming that: (1) the FCC failed to establish the identity of the caller and prove that the caller was the same person that caused the display of inaccurate caller ID information; (2) some of the caller IDs used were either assigned to him or were non-working numbers and therefore there was no intent to cause harm; (3) the spoofing of unassigned numbers and content of the messages themselves were forms of political speech protected by the First Amendment; (4) the FCC could not verify that each of the 6,455 calls contained the pre-recorded messages at issue; (5) the NAL failed to establish any intent to cause harm to the call recipients; (6) the “wrongfully obtain something of value” factor should only apply to criminal wrongdoing or telemarketing; and (7) the FCC failed to issue a citation before adopting the NAL in accordance with its rules.

The FCC considered and rejected most of these arguments.  In reviewing the dialing platform’s records, the Commission verified that the calls originated from his account and that there was no evidence to support his claim that someone else had selected the call numbers.  Further, although he denied involvement in selecting the caller ID numbers, the man noted that several of the numbers contained patterns that signify neo-Nazi ideology, which the FCC used to support its finding that the Idaho man knowingly chose the numbers at issue.  And despite what the man referred to as the “well established” and “recognized” meanings behind the numbers, the FCC concluded that the use of such numbers did not constitute protected speech because it was not clear the meaning was understood by the call recipients as required by the First Amendment.

The FCC also addressed how it verified the spoofed calls, noting that it relied on the same methodology used in prior spoofing enforcement actions where a sample of all calls made were reviewed, identical statements were confirmed in the recordings, and wrongful intent was identified.  Regarding the argument  that enforcement should only apply to criminal conduct or telemarketing, the FCC concluded that the use of local numbers to deceive call recipients demonstrated the man’s intent to cause harm and wrongfully obtain something of value in the form of avoiding liability and promoting his personal brand.

Finally, the FCC noted that neither the Truth in Caller ID Act nor the Commission’s rules require issuance of a citation prior to an NAL.

The Idaho man did, however, successfully demonstrate that one of the caller ID numbers displayed was not spoofed.  The FCC found that a May 2018 robocall campaign targeting California residents displayed a contact number that was assigned to the man and was therefore not spoofed.  As a result, the FCC affirmed its original fine but reduced it by $2.9 million to account for the calls that were not spoofed.  The $9.9 million fine must now be paid within 30 calendar days after release of the Order.

FCC Affirms $233,000 Fine Against Large Radio Group for Sponsorship ID Violations

The FCC issued a $233,000 fine against a national radio group for violating the Commission’s Sponsorship Identification rule and the terms of a 2016 Consent Decree by failing to timely notify the FCC of the violations.

Under the Communications Act and the FCC’s rules, broadcast stations must identify on-air any sponsored content, as well as the name of the sponsoring entity, whenever “money, service, or other valuable consideration” is paid or promised to the station for the broadcast.  According to the FCC, identifying sponsors ensures that listeners know who is trying to persuade them, and prevents misleading information from being conveyed without attribution of the source. Continue reading →

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

  • Texas Wholesaler Fined $22,000 for Using Signal Jamming Device
  • Florida Broadcaster Hit with $125,000 Penalty Over Allegations of Antenna Lighting and Contest Rule Violations
  • FCC Announces Pirate Radio Enforcement Will Target Property Owners and Managers

Texas Wholesale Company in a Jam: Illegal Signal Blocking Device Leads to $22,000 Fine

In a recent Memorandum Opinion and Order, the FCC upheld a $22,000 fine against a consumer goods wholesaler based in Dallas for operating a prohibited cellular signal blocking device, referred to as a signal jammer.

Signal blocking devices can significantly disrupt emergency calling capabilities, and consumer communications more generally, and are therefore banned under the Communications Act and FCC rules.  Section 301 of the Communications Act prohibits radio transmissions without prior FCC authorization, and Section 333 prohibits willful or malicious interference with any licensed or authorized radio communications.  Additionally, Section 302(b) prohibits the manufacture, import, sale, shipment, or use of devices capable of causing harmful interference to authorized radio communications.  Sections 2.805 and 15.1(c) of the FCC’s Rules, implementing Section 302(b), require radio frequency devices to be authorized by the FCC before operation.

In response to a complaint from a cellular company, FCC investigators made an on-site visit in April 2017 to examine interference issues reportedly caused by a signal jammer.  The cellular company claimed that the jammer was likely located on the premises of a Dallas-area wholesale business that, according to the company, had a history of causing interference from the use of signal jammers.  When the investigators arrived, however, they found no jamming device in use.  In discussions with the investigator, the wholesale business owner admitted to operating a signal jammer to prevent employees from using their mobile phones while at work, acknowledged that in February 2017 a representative of the cellular company had warned the wholesaler against using such devices, and claimed that the device had been discarded prior to the investigator’s arrival.  The owner refused to relinquish the device and instead offered to sell the signal jammer to the investigator.   After declining the offer, the investigator issued a Notice of Unlicensed Radio Operation, informing the wholesaler that the use of a signal jammer is illegal.

In July 2017, the Enforcement Bureau issued a Notice of Apparent Liability (NAL) and proposed a $22,000 fine against the wholesaler for use of a signal jamming device.  The wholesaler responded to the NAL, denying that the investigator asked the owner to retrieve the device from the trash, and arguing that the Bureau misapplied the law in calculating the proposed fine amount.  The Bureau considered and rejected the wholesaler’s arguments and imposed the $22,000 fine.

In May 2018, the wholesaler filed a Petition for Reconsideration challenging the fine, citing its history of compliance and offer to surrender the device, and denying that the owner offered to sell the jammer to the investigator.  In the recent Memorandum Opinion and Order, the Bureau again considered and rejected the wholesaler’s arguments.  Applying its procedural rules, the Bureau noted that the Petition raised new facts and arguments that could have been raised in response to the NAL, and therefore dismissed them as procedurally barred, denying the request for a reduction of the fine.  The Bureau also noted that, even if it were to consider the new facts and arguments presented, it would dismiss the arguments on the merits due to the lack of any compliance history with the FCC as a non-license/authorization holder, insufficient evidence regarding relinquishment of the jamming device, and conflicting statements regarding the offer to sell the jamming device to the investigator.  The wholesale company now has 30 days from the release of the Memorandum Opinion and Order to pay the full $22,000 fine.

Florida FM Broadcaster’s Tower Lighting and Contest Rule Troubles Lead to $125,000 Penalty

The Enforcement Bureau entered into a Consent Decree with the licensee of Panama City and Tallahassee-area FM stations to resolve two investigations into contest and tower lighting violations.

The Communications Act and FCC rules regulate on-air contests conducted by television and radio stations to protect the public against misleading and deceptive practices.  Section 73.1216 of the FCC’s Rules provides that a licensee must “fully and accurately disclose the material terms” of a contest it broadcasts, and conduct the contest “substantially as announced and advertised.”  Under Section 73.1208, broadcasters must disclose if program material was previously taped, filmed, or recorded where “time is of special significance,” or “an affirmative attempt is made to create the impression that it is occurring simultaneously with the broadcast.”

Part 17 of the FCC’s Rules, along with Federal Aviation Administration (FAA) regulations, set forth monitoring and notice obligations regarding tower lighting systems.  The rules require the owner of an antenna structure to immediately notify the FAA of any lighting outages or other lighting malfunctions.  Tower owners must also notify the FCC within 5 days of any change to the tower’s height or ownership. Continue reading →

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Pillsbury’s communications lawyers have published FCC Enforcement Monitor monthly since 1999 to inform our clients of notable FCC enforcement actions against FCC license holders and others.  This month’s issue includes:

  • Louisiana FM Radio Stations’ Late Filings Lead to $3,000 Proposed Fines
  • Telemarketer Fined $9.9 Million for Thousands of Spoofed Robocalls
  • Wi-Fi Device Manufacturer’s Equipment Marketing Violations End with Consent Decree and $250,000 Penalty

Late Filings Come at a Cost: FCC Proposes $3,000 Fines Against Louisiana FM Stations Over Late License Renewal Applications

Earlier this month, the Media Bureau issued Notices of Apparent Liability for Forfeiture (NAL) against two Louisiana FM radio licensees – one a supermax prison and the other a religious noncommercial broadcaster – for filing their respective license renewal applications late.  The FCC proposed a $3,000 fine for each of the late filings.

Section 73.3539(a) of the FCC’s Rules requires broadcast station license renewal applications to be filed four months prior to the license expiration date.  The prison station’s renewal application was due February 3, 2020 (the first business day following the February 1 deadline), but was not filed until May 29, 2020, mere days before its June 1 license expiration.  Similarly, the noncommercial broadcaster’s station, also subject to the February 3 deadline, did not file its renewal application until May 22.

Section 1.80(b) sets a base fine of $3,000 for failure to file a required form, which the FCC can adjust upward or downward depending on the circumstances of the situation, such as the nature, extent, and gravity of the violation.  In these cases, the FCC noted that neither licensee provided an explanation for their untimely filing, and ultimately proposed the full $3,000 fine for each late application.

Each NAL instructs the licensee to respond within 30 days by either: (1) paying the fine, or (2) providing a written statement seeking a reduction or cancellation of the fine along with any relevant supporting documentation.

Neither NAL, however, impacted the FCC’s review of the stations’ license renewal applications themselves.  According to the FCC, the late filings did not constitute “serious violations” and the FCC found no other evidence of a pattern of abuse.  As such, the Commission stated that it would approve each station’s renewal application in a separate proceeding assuming no other issues are uncovered that would preclude grant of a license renewal.

Thousands of Spoofed Political Robocalls End with $9.9 Million Fine

The FCC recently issued a Forfeiture Order, affirming a $9.9 million fine against a California telemarketer for violations of the Communications Act and the FCC’s rules regarding the use of spoofed phone numbers.

Section 227(e) of the Communications Act prohibits using a telephone caller ID service to “knowingly transmit misleading or inaccurate caller identification information with the intent to defraud, cause harm, or wrongfully obtain anything of value[.]”  Moreover, the Telephone Consumer Protection Act (TCPA) also protects consumers from unwanted calls by imposing numerous restrictions on robocalls.  Such restrictions include requiring the called party’s prior express consent for certain pre-recorded calls to wireless phones and, for pre-recorded messages to wireless or wireline phones, requiring the calling party to identify itself at the beginning of the message and provide a callback number.  Continue reading →