Congress and Regulators Focusing on COVID-19 Robocall Scams
Privacy in Focus®
The unprecedented global coronavirus (COVID-19) pandemic creates a challenging environment for individuals seeking access to timely and accurate information regarding the virus. Government stakeholders are concerned that unscrupulous scammers may exploit confusion surrounding the COVID-19 virus for malicious gain, including through the transmission of illegal robocalls and texts. Fraudulent COVID-19 robocalls and texts have gained the attention of Congress and various federal agencies, with each taking steps to try to protect consumers. In this turbulent environment, the private sector – including calling parties and service providers – is addressing regulatory limits and practical questions. The government is eager to find solutions that protect consumers and facilitate the transmission of accurate information.
Federal agencies are concerned that scammers may be exploiting the fear and confusion about the COVID-19 pandemic to target consumers.
As with past national emergencies, scammers and bad actors may be exploiting the COVID-19 crisis for financial gain. For example, there has been a rise in COVID-19 internet scams and coronavirus disinformation.
Robocalls represent yet another threat vector for COVID-19-related fraud. The Federal Communications Commission (FCC), the Federal Trade Commission (FTC), and the U.S. Department of Justice (DOJ) have all taken action to warn consumers about the perceived increase in fraudulent robocalls related to the pandemic.
- The FCC, for example, issued a consumer alert announcing the establishment of a dedicated webpage on COVID-19-related scams. It warns consumers about the “proliferation” of various scams related to the COVID-19 pandemic,” including “scam robocalls offering free home testing kits, promoting bogus cures, selling health insurance, and preying on virus-related fears.” The FCC’s website, which will be updated “as new scams surface,” includes audio samples from calls associated with these scams.
- The FTC has similarly warned consumers about a range of COVID-19-related fraud and, like the FCC, has a dedicated webpage addressing COVID-19-related scams.
- Given the criminal nature of many of these scams, the DOJ has established a COVID-19 fraud website.
Congress is seeking answers on COVID-19 robocall scams.
COVID-19 scams are drawing the attention of Congress. Shortly after the FCC and FTC issued their consumer alerts, Sens. John Thune (R-SD) and Edward J. Markey (D-MA) sent a letter to FCC Chairman Ajit Pai and Attorney General William P. Barr that specifically addresses COVID-19-related robocalls. The senators called the COVID-19 scam calls “a danger to the public” and urged both agencies to “take all necessary steps to protect the public against them” (emphasis in original).
They expressed particular concern about the threat these scam calls could pose to elderly Americans, since their demographic is both “especially vulnerable to robocall scams” and the elderly are among those at the greatest risk from COVID-19. Both agencies were directed to respond to the senators by April 2, identifying the “concrete steps” they will be taking to “address this dangerous scourge” of COVID-19-related robocalls. Shortly thereafter, Reps. Michael Doyle (D-PA) and Robert Latta (R-OH), the Chairman and Ranking Member respectively of the House Subcommittee on Communications and Technology, sent a similar letter to Attorney General Barr and Chairman Pai, seeking a response from both agencies by April 14.
The federal government is adjusting regulations and aggressively targeting bad actors.
As noted, several federal agencies are warning consumers about COVID-19 robocalls and scams. Additionally, the DOJ and the FCC have taken other actions to address the global pandemic, both recognizing that some existing regulations could be a barrier to effective and timely communication about the pandemic and drawing on existing tools to enforce against bad actors.
For example, to ensure that important calls can be made to consumers about the pandemic, the FCC’s Consumer and Governmental Affairs Bureau (Bureau) issued a Declaratory Ruling confirming that the COVID-19 pandemic constitutes an “emergency” under the Telephone Consumer Protection Act (TCPA). In determining whether a call relating to the COVID-19 pandemic qualifies for an emergency purpose, the Bureau said it would “look to the identity of the caller and content of the call.” With respect to the former, it concluded that the caller must be from a “hospital, or be a health care provider, state or local health official, or other government official as well as a person under the express direction of such an organization and acting on its behalf.” Regarding the content of the call, the Bureau concluded that it “must be solely informational, made necessary because of the COVID-19 outbreak, and directly related to the imminent health or safety risk arising out of the COVID-19 outbreak.” And, the FCC is also seeking public comment on a Petition for Expedited Declaratory Ruling by several financial services associations that “contends that calls or texts placed by banks, credit unions, and other customer-facing financial service providers using an automatic telephone dialing system or prerecorded or artificial voice on matters relating to the COVID-19 pandemic are calls made for ‘emergency purposes’ under the [TCPA], and thus may be made without the prior express consent of the called party.”
The FCC is also using existing tools to target bad actors, and it, together with the FTC, recently took an unprecedented step. Both the FCC and the FTC sent letters to three gateway providers warning them that their alleged facilitation of COVID-19-related scam robocalls originating overseas needed to cease immediately, or each would face “serious consequences.” Absent the gateway providers ceasing transmission of these calls into the United States, the FCC said that it would authorize other phone companies to begin blocking all traffic from their networks within 48 hours. Notably, the FCC and FTC stated that they were also “working closely with the U.S. Department of Justice on this first-of-its-kind effort to stop scammers from reaching American consumers.”
The DOJ is also taking steps to address instances of COVID-19-related fraud, drawing on its existing tools for addressing fraud. It recently took its first enforcement action in federal court to combat fraud related to the pandemic. And in a recent memorandum to all U.S. Attorneys, Attorney General Barr directed every U.S. Attorney’s Office to “prioritize the detection, investigation, and prosecution of all criminal conduct related to the current pandemic.” We expect this admonition to build on recent work to address illegal robocall scammers.
The DOJ recently achieved an important victory that, while not directly related to the COVID-19 pandemic, may help it mitigate illegal robocalls exploiting the crisis. We previously wrote about separate DOJ and FTC litigation targeting so-called “gateway providers.” In one of the cases, the DOJ successfully obtained a preliminary injunction against the Arizona-based gateway provider TollFreeDeals, which was alleged during a 23-day period to have carried more than 720 million robocalls. In issuing the injunction, the court concluded that the company “know[s] their network is an instrumentality of a vast telecom fraud, and have knowingly facilitated that fraudulent traffic.” While not directly related to the COVID-19 pandemic, the DOJ’s preliminary injunction has effectively closed one major chokepoint for illicit robocall traffic. To the extent industry traceback efforts can rapidly identify domestic entry points for COVID-19-related robocalls, federal government stakeholders appear poised to act aggressively.
Wiley has a deep and experienced bench of lawyers who handle robocalling and robotexting issues for clients. Our experts handle federal and state policy issues; compliance with federal and state requirements; complex Telephone Consumer Protection Act (TCPA) issues, including political and charitable outreach; and TCPA enforcement actions and investigations.
© 2020 Wiley Rein LLP