Actions and Consequences: XCast Labs Sued by the FTC for Network Misuse

There exists at least a baker’s dozen ways that the phrase “You reap what you sow.” can be, well, rephrased; “You get what you give.” and “What goes around, comes around.” and “Every person is the architect of their own fortune.”

The long story short? Actions have consequences.

And that is precisely the lesson that – if it hasn’t been learned by the party at fault here – has certainly been doled out in the form of action (hopefully leading to justice) in the telecommunications space.

The parties involved in the scenario in question are XCast (News - Alert) Labs and the Federal Trade Commission (FTC). As last week closed, a statement from the FTC made clear that it would sue to stop VoIP provider XCast Labs from funneling hundreds of millions of wholly illegal robocalls through its network, even after the latter received multiple warnings in light of misconduct.

Per a complaint filed in the Central District of California by the Department of Justice (DOJ) – and per the FTC’s (News - Alert) Director of the Bureau of Consumer Protection:

“XCast Labs has played a key role in helping telemarketers flood homes with unlawful robocalls, including robocalls impersonating the Social Security Administration. VoIP providers like XCast Labs that bury their heads in the sand when customers use their services to break the law can expect to hear from the FTC.”

Now, such has been made evident.

While the verdict of this case will still need to be officially decided by the court, these civil penalties are not to be taken lightly. Part of this scenario’s roots go back to prime pandemic months in 2020 when the FTC sent a number of VoIP providers letters that warned of the consequences associated with any facilitation of illegal telemarketing or robocalling. (Especially at such a divisive time in recent history.) Even the U.S.’s Telecom Industry Traceback Group suspected that dozens of traceback inquiries it’d received did, in fact, originate from XCast Labs. (Plus, law enforcement agency inquiries about transmissions of allegedly illegal traffic on the XCast Labs network.)

Under no light does this look good for XCast Labs.

And when it rains, it pours; the FTC also discovered that many of the suspect robocalls were part of organized campaigns designed to generate various telemarketing leads by actually impersonating other federal officials, too. (Said leads generated would then be sold, after which data from consumers would be utilized for even more unwanted and illegal communications.)

Willfully allowing and even facilitating these kinds of “roboblasts” over what should be legitimate VoIP services is, in the eyes of many, inexcusable. Everyone can say that tech is both “a blessing and a curse” at times, but that more so refers to when our devices do work and when they don’t work as intended. This XCast Labs scenario isn’t, however, about functionality; it’s about the misuse and abuse of telecommunications, instead.

The Office of Public Affairs will release updates as they develop.