Small Companies Play Big Role in Robocall Scourge, But Remedies Are Elusive

"There are definitely repeat offenders who keep showing up the sources of illegal robocalls," said

      Patrick Halley,

       Senior Vice President at USTelecom, a trade association of large telecom companies that runs a robocall-tracing group. "Carriers that knowingly allow the origin of billions of illegal robocalls should be held accountable."

U.S. regulators have conflicting interpretations of their ability to take over companies, however. Et al., Et al.

There are many legitimate uses for robocalls, such as when a bank wants to alert customers to a data breach. Such calls are illegal, however, when they do not go away.

Relatively few calls flagged "high risk" of being illegal robocalls-13% -originate from numbers owned by major telecommunications carriers

            AT & T
Inc.

Verizon Communications
Inc.

and

            T-Mobile US
Inc.

according to TNS Inc., which provides network and data services to the telecom industry.

Instead, most of the traffic is generated by USTelecom, industry officials say.

In interviews, representatives of several smaller transporters said it is hard to differentiate between legal and illegal robocall traffic.

Both types of calls rely on similar technology. Legal automated calls, such as notifications for school closings and prescription refills, often use the same internet-based dialing platforms that illegal robocallers abuse.

In effect, scammers are exploiting principles in the DNA of the phone system: It is set to make sure that calls get through, no matter what. Carriers do not look at the content of calls before connecting, and multiple companies touch each call.

The Federal Communications Commission in November urges small and medium-sized telecom companies and urges their cooperation in fighting illegal robocalls.

In response to questions from the Wall Street Journal, representatives of the companies said they shut down their services.

All of these companies have been called by the United States of America Telecom's TraceBack Group and said they are responding to the questions.

Such traces typically start when the group observes a large scam campaign and tries to follow it back to its origin.

Aaron Leon,

       chief executive of thinQ Technologies Inc., one of the companies that has received robocall trace requests, said his firm blocks numbers when it detects a high volume of calls, and corrocates.

But the 40-employee firm, based in Raleigh, N.C., has limited resources and can not listen to a discerning caller, he said.

"We work very hard to try to eliminate it," Mr. Leon said of robocall traffic. "That does not mean people do not take advantage of our system."

Another Squared Telecom LLC, based in Akron, Ohio. The company launched in 2014 as an intermediary connecting Philippines-based call centers to the U.S. telephone system, an R Squared Executive said in a YouTube interview posted in January 2018.

The company knows little about where the calls come from. "They do not know if it's an office with 1,000 people who make a call every day," he said in response to a question. .

R Squared said, "It is a question of law that we are in the process of making illegal inquiries."

The FCC and the Federal Trade Commission have two actions in the past, but rather over Internet Protocol, or VoIP providers.

The FCC has asserted limited jurisdiction over VoIP providers, an agency spokesman said. For example, one-way carriers – those who place calls but do not receive them-aren't subject to certain requirements. Many internet-based companies are set up this way.

The FTC has broad authority to go after deceptive business practices, but the agency believes some partners, including VoIP providers, fall outside its jurisdiction. In a recent memo to a congressional committee, viewed by the Journal, the FTC cites May 2018 enforcement action related to scam callers where it declined to be an Internet-based phone company "for its participation participation in the illegal robocalls."

The FTC memo pointed out the finger at the FCC, saying the company in question was likely to "common carrier" exclusively under the jurisdiction of the FCC.

An FCC spokesman declined to discuss specific enforcement issues but disputed the FTC's legal interpretation, saying the FTC has "broadcasters" and "middlemen that facilitates them."

Some courts have said that they are not liable for their clients' rights.

      Daniel Delnero,

       A senior attorney at Squire Patton Boggs.

FCC Chairman

      Ajit Pai

       said the agency "will continue our efforts to ensure that we are in the business of robocalls."

Mr. Pai is pressing the largest number of people in the world, but rather than "spoofing" someone else's number. Regulators and industry officials hope the verification system will make it easier to spot nefarious activity.

FCC Commissioner

      Jessica Rosenworcel,

       a critic of Mr. Pai, wants the agency to consider its authority "to revoke their authorization to provide services" for which the illegal nuisance calls on the network.

Some in the industry are considering the possibility of creating a public list of problems in the future.

Write to Ryan Tracy at [email protected] and Sarah Krouse at [email protected]