Another VoIP Service Provider Hit by FTC for Facilitating Illegal Telemarketing Robocalls

Another VoIP service provider found themselves in the hot seat as allegations that customers using their service were making illegal telemarketing calls in the millions to consumers on the Do Not Call Registry using Robocalling and spoofing their caller ID numbers.

This action is part of a continued crackdown by the Federal Trade Commission looking to stop would-be fraudsters by holding accountable the services they use to perform these illegal calls.

According to the Federal Trade Commission’s website, Alcazar Networks Inc. and its owner have settled the charges, which include barring the defendant from misconduct of this sort in the future as well as a monetary penalty of $105,562.

“These defendants acted as a gatekeeper, introducing tens of millions of illegal calls into the U.S.—including robocalls and other calls that impersonated 911 emergency numbers or the government,” said Andrew Smith, Director of the Bureau of Consumer Protection.

“The FTC and our law enforcement partners will not tolerate VoIP providers and other companies that assist and facilitate illegal robocallers and scammers.”

The ruling also permanently bans the defendants from working with telemarketers or customers located overseas doing robocalls of any sort. And orders it does the following:

• Automatically block any calls that display the ID number like 911 or other related emergency or invalid numbers.
• All calls after June 30, 2021, must be authenticated under the STIR/SHAKEN Authentication Framework.
• Screening of all customers before providing VoIP services.
• End all business relationships with customers that fail to pass the screening process.

Commissioner Christine S. Wilson released a statement on the recent action saying, “VoIP service providers play a significant role in the telemarketing and robocall ecosystem, helping “bad actors to place millions or even billions of calls, often from abroad, at very low cost, and in ways that are difficult to trace.”1 This case sends a strong signal to the market that VoIP providers cannot knowingly provide substantial assistance to illegal robocallers harassing Americans with unwanted calls. For these reasons, I support the complaint and stipulated order.”

“A provider will be held liable when it “provide[s] substantial assistance or support to any seller or telemarketer when [it] knows or consciously avoids knowing that the seller or telemarketer is engaged in any act or practice that violates [the TSR],” Wilson stated.

This is the second case the FTC has brought to a VoIP service provider. Earlier this year, Globex Telecom and Associates were ordered to pay $2.1M to settle charges their services helped facilitate a bogus credit card interest rate relief scheme that illegally charged consumers millions of dollars.