The Scammer, the Telemarketer, and the Robocaller

The phone rings and caller ID displays a local area code–but the automatic recording on the other end means trouble. Not only are scammers, telemarketers, and robocallers after valuable personal information, such as credit card and social security numbers, they also get money from consumer caller ID systems. Regardless of whether or not a consumer answers the call, these callers are making money when they are identified through the caller ID system.

Here’s how it works:

Companies and individuals control phone numbers from areas all across the U.S. and sell these phone numbers to other businesses and users. Scammers then purchase these numbers and register them in caller ID databases under fake names and addresses. The scammer hires call centers to place calls using the logged phone numbers that they purchased.

Sometimes, the scammer will use a method called “spoofing” in which they alter the number that they are using to match the victim’s area code to encourage the victim to answer. The victim’s phone requests information about the caller from the caller ID database. The phone service provider (that the victim pays for) then pays the caller ID database for access to the identity of the caller. The database then pays the company or individual who controls the calling number and that revenue is shared with the scammer. Although the payment is incredibly small for each individual call, making multiple calls can turn a profit.

These calls are quite common. One popular call-authentication app has analyzed and identified 4.9 billion robocalls made to U.S. mobile phones within the first quarter of 2018.

The U.S. Federal Communications Commission (FCC) has been actively pursuing policy measures to punish and limit these illegal robocalls, some of which were detailed by the U.S. FCC Chairman Ajit Pai in the following statement:

“Last November, the FCC empowered phone companies to block calls from spoofed phone numbers that do not or cannot actually originate calls—such as invalid or unassigned numbers.  This allows phone companies to block many scam calls before they even get to consumers. Additionally, we’re seeking public input on ways to help authenticate caller ID information.  This would essentially give each phone number a verified digital fingerprint that would give every call recipient confidence to answer, knowing a legitimate caller was on the line. And just yesterday, the FCC launched an initiative to explore the creation of a database for reassigned phone numbers, a measure that would help reduce unwanted calls to consumers. The FCC’s focus hasn’t been limited to the rulemaking side of the ledger.  Aggressive enforcement has also been a key component of our strategy.  We’ve sent a very clear message that those who engage in illegal robocall schemes will pay a price—literally.  In 2017, the FCC proposed over $200 million in fines against illegal robocallers.  I also personally have raised the issue with foreign counterparts to enable our governments to share information necessary to crack down on organized robocall operations.”

The U.S. Federal Trade Commission (FTC) and the FCC are aware of the daunting task these numerous illegal robocallers present. The agencies collaborated on a joint forum to discuss regulatory action regarding robocalls. The forum “included an in-depth discussion of recent policy changes and enforcement actions to stop illegal robocalls along with an overview of technological solutions consumers can employ to combat illegal robocalls.”

In addition, there was also a panel on “third-party solutions and other resources available to empower consumers” such as call-authentication apps like the one mentioned above. These new federal regulations, punishments, and third-party solutions, such as call-analyzing apps, are aiding in the fight to limit illegal, money-making robocalls.

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