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Here's what's in the new law taking on the 'scourge' of robocalls

Ben Werschkul
DC Producer

President Donald Trump on Monday signed legislation that aims to take on the aggressive robocalls plaguing the phones of unsuspecting consumers.

Early this month, the House of Representatives passed the bill, called the Pallone-Thune TRACED Act, with an overwhelming vote of 417-3. The Senate passed the bill a few weeks later in a voice vote. Rep. Frank Pallone (D-NJ) was the lead House sponsor, and was joined on the Senate side by John Thune (R-SD).

In a statement, Press Secretary Stephanie Grisham said Monday that the new policy “will provide American consumers with even greater protection against annoying unsolicited robocalls.” Federal Communications Commission Chairman Ajit Pai, who has often called robocall scams a “scourge,” endorsed the action recently on Capitol Hill.

The telecom industry has also been supportive. In a statement, Jonathan Spalter said it’s now “clear that government and innovators are united against the criminals who scam and spoof consumers.” Spalter is the president and CEO of USTelecom, an industry group representing phone companies like Verizon (VZ) (Yahoo Finance’s parent), AT&T (T), and a range of smaller telecom providers.

Frank Pallone talks with reporters after a meeting of the House Democratic Caucus. (Photo By Tom Williams/CQ-Roll Call, Inc via Getty Images)

Americans were bombarded by 5 billion robocalls just in November alone, according to data from YouMail, a company that makes robocall blocking software. That works out to over 15 calls per person during that month.

Here’s what’s in the new law, and how it aims to begin easing the plague of robocalls. 

New responsibilities on telephone providers

A centerpiece of the law is a new mandate for phone companies to try and at least identify calls correctly.

The problem — as users know all too well — is that scammers trick people into thinking a call is coming from nearby, or from a legitimate place like the IRS or the Social Security Administration.

According to some estimates, consumers lose billions a year when they fall for these scams. YouMail estimates at least 40% of Robocalls, and probably more, involve some kind of spoofing.

The guidelines being mandated are known as SHAKEN/STIR, and they are designed to create transparency about where a call is actually coming from.

Here’s how the FCC’s Pai explains it: “SHAKEN/STIR involves what’s essentially a digital fingerprint for each phone call.” He added that “this framework will be critical in informing consumers whether the Caller ID information they see is real or spoofed. And it can be used to assist with blocking spoofed calls.”

The large carriers are already adopting the SHAKEN/STIR standards and expect to be done by 2020. The legislation aims to ensure that all phone companies — large and small — eventually implement these standards.

Deirdre Menard is the CEO of Lucidtech, a company that consults on fraudulent robocalls. She questioned how smaller carriers will be able adopt to the new standards.

“I'm not sure that the legislators understand that they're putting [small carriers] in a bit of a Catch 22 position,” Menard said, speaking about high costs that might be required to overhaul their infrastructure.

“I think we're definitely building the plane while we're flying it with STIR/SHAKEN,” she added.

The law also has provisions to encourage the blocking of illegal calls — although blocking is a significantly more challenging undertaking. Some legitimate calls might be blocked like, say, a robocall from a doctor’s office confirming an appointment.

Businesses like Uber also use “call spoofing” for a variety of reasons, including to protect the identity of its riders and drivers.

The law also has a provision to allow carriers to offer call-blocking services with no additional charge. This is an attempt to answer one of the critiques levied against some of the previous attempts to crack down on the practice.

This summer, the FCC moved to cut down on so-called “neighborhood spoofing.” At the time, FCC Commissioner Jessica Rosenworcel tweeted that the action “refuses to prevent new consumer charges and fees to block these awful calls. That’s not right. We should stop robocalls and do it for FREE.”

Jessica Rosenworcel, along with FCC Chairman Ajit Pai and other commissioners, testified before Congress in May 2019. (Photo By Tom Williams/CQ Roll Call)

In a statement to Yahoo Finance, Rosenworcel says the new law “will give the FCC new tools to crack down on robocalls and help fix this mess for consumers.”

New powers for the FCC to chase down scammers

The FCC can make rules and take civil actions against robocall scammers, but within certain limits. The new law expands those limits along with the powers of the commission.

One example is in the commission’s authority to levy civil penalties on people who ignore telemarketing rules.The new rules also extend to four years the window of time the FCC has to take action against “violations with intent” when a robocall is placed.

Senator Josh Hawley has been a supporter of the bill, especially the provision to extend the statute of limitations on prosecutions for illegal spoofing. He says the new law will “hold these fraudsters accountable.”

The FCC’s focus on fines and civil penalties has produced mixed results at best. A March investigation by the Wall Street Journal found that the FCC has issued $208.4 million in fines against robocallers since 2015, but collected just $6,790. 

The FCC lacks the authority to enforce its penalties and refers unpaid fines to the Justice Department.

A chance of new criminal actions

The Federal Trade Commission also plays an important role in stopping robocalls – for example, it maintains the do-not-call registry. In June (with law enforcement partners), the FTC announced a crackdown on marketing calls.

The law is designed to encourage government agencies to level criminal charges on domestic robocallers, at least through mandating greater coordination. The legislation creates an “interagency working group” composed of the Department of Commerce, the Department of State, the Department of Homeland Security, the FCC, the FTC, and the Bureau of Consumer Financial Protection. The group, crucially, would be convened by the Attorney General.

The group, among other responsibilities would “study government prosecution of violations” — including more criminal penalties on robocall scammers. Criminal penalties would likely have more teeth compared to civil actions.

Senate Majority Whip John Thune (R-S.D.) is one of the leaders in the Senate on the robocalls issue. (Photo by Tom Brenner/Getty Images)

The bill also mandates that the group submit a report to Congress on "the status of the efforts."

Overall, new law is seen by many as a significant step but only a first one toward solving the robocall problem.

As Congressman Pallone noted just before the vote “all of these scams are different, and there is no silver bullet to fix them all.”

This story was updated on Dec. 31 after the legislation was signed into law.

Ben Werschkul is a producer for Yahoo Finance in Washington DC.

Read more:

A bill fighting robocalls will have consequences for companies like Uber

FCC goes after international robocallers and spam texts

Phone companies could begin blocking robocalls by default

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