XCast Labs [1] [2] [3] [4] [5] [6], a Californian Voice over Internet Protocol (VoIP) provider [5], has settled charges with the Federal Trade Commission (FTC) and the US Department of Justice (DoJ) for facilitating billions of illegal robocalls. This article examines the details of the settlement and the actions required of XCast Labs.
Description
Despite receiving multiple warnings from the FTC and DoJ about the illegal use of its services for robocalls, XCast Labs took no action. The FTC complaint revealed that XCast Labs and other VoIP companies had been warned about enabling illegal robocalls as far back as 2020 [4]. The calls made by XCast Labs included scam calls that impersonated government agencies and used false or misleading statements [4].
As part of the settlement [3] [5] [6], XCast Labs will be required to implement a screening process to ensure compliance with telemarketing laws and sever ties with non-compliant firms. The proposed court order also prohibits XCast Labs from violating telemarketing-related laws in the future and imposes a $10 million civil penalty [5], which may be suspended based on the company’s financial condition [5].
Additionally, XCast Labs will be required to block calls with invalid Caller ID numbers and authenticate calls through the FCC’s STIR/SHAKEN framework [5]. The company must also screen current and prospective customers to ensure compliance with telemarketing laws and terminate relationships with non-compliant customers [5]. XCast Labs claims it cannot afford to pay the $10 million civil penalty, which is currently suspended [2] [4].
In a separate settlement [3] [6], Response Tree LLC and its president [2] [3] [6], Derek Thomas Doherty [2], have also been banned by the FTC from making robocalls or calling numbers on the Do Not Call Registry [2]. Response Tree was accused of operating websites to deceive consumers [3] [6].
Conclusion
The settlement with XCast Labs highlights the consequences faced by companies that facilitate illegal robocalls. The required actions [4] [5], such as implementing screening processes and severing ties with non-compliant firms [5] [6], aim to ensure compliance with telemarketing laws and protect consumers from scam calls. The $10 million civil penalty [1] [2] [3] [4] [5] [6], although currently suspended [4], serves as a deterrent for future violations. The ban on Response Tree LLC and its president further reinforces the FTC’s commitment to cracking down on deceptive practices in the robocall industry. These settlements send a strong message to other VoIP providers and individuals involved in illegal robocalls, emphasizing the importance of adhering to telemarketing laws and protecting consumers from fraudulent activities.
References
[1] https://thehackernews.com/2024/01/doj-slams-xcast-with-10-million-fine.html
[2] https://finance.yahoo.com/news/1-ftc-reaches-settlement-xcast-003206624.html
[3] https://srnnews.com/ftc-reaches-settlement-with-xcast-labs-over-illegal-robocalls/
[4] https://www.infosecurity-magazine.com/news/voip-xcast-settles-10m-illegal/
[5] https://www.ftc.gov/news-events/news/press-releases/2024/01/xcast-labs-will-be-banned-supporting-illegal-telemarketing-practices-settle-ftc-charges-it-assisted
[6] https://www.aol.com/ftc-reaches-settlement-xcast-labs-191555546.html
