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3 ways Washington is taking on the 'scourge' of robocalls

Ben Werschkul
DC Producer

The House of Representatives passed a bipartisan deal on Wednesday to take on robocalls. The bill passed in the House by a vote of 417-3. It’s headed to the Senate next where lawmakers hope it will be voted on next week.

The bill is called the Pallone-Thune TRACED Act and merges two bills that passed in the Senate and House earlier this year. The compromise legislation was announced by six members of Congress who said that “it’s time to put Americans back in charge of their phones.”

The chairman of the Federal Communications Commission, Ajit Pai, recently said in a speech that “I believe that a law can and will be passed and signed by the President—even in this challenging political environment.”

Rep. Frank Pallone (D-NJ) - the lead House sponsor of the compromise bill - said on the House floor that he hopes the bill will be signed into law before the end of the year. Greg Walden (R-OR) added a prediction that President Trump would definitely sign it if it reaches his desk.

Frank Pallone (D-NJ), right, is one of the leaders of the robocall bill in the House, alongside Greg Walden (R-OR), left. REUTERS/Joshua Roberts

The estimates are the Americans were bombarded by 5.7 billion robocalls just in October according to a company that makes robocall blocking software named YouMail. That works out to over 17 calls per person during that month.

Here’s how the bill, if it makes it through Congress and is signed by President Trump, might begin to help ease the plague of robocalls. 

New responsibilities on telephone providers

A centerpiece of the bill 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 spoofing of some sort.

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 Chairman Pai explains them: “SHAKEN/STIR involves what’s essentially a digital fingerprint for each phone call” adding 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, whether or not Congress acts. The legislation would ensure that all phone companies — large and small — implement these standards.

The agreement would provide “a powerful shot in the arm to our technology-driven traceback and verification work and will go a long way in helping take back our phones,” say Jonathan Spalter in a statement. Spalter is the president and CEO of USTelecom, an industry group representing phone companies like Verizon (Yahoo Finance’s parent), AT&T, and a range of smaller telecom providers.

Deirdre Menard is the CEO of Lucidtech, a company that consults on fraudulent robocalls. She questions 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” she says of high costs that might be required to overhaul their infrastructure adding “I think we're definitely building the plane while we're flying it with STIR/SHAKEN.”

The bills 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 bill 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. This summer, the FCC moved to cut down on so-called “neighborhood spoofing.” Jessica Rosenworcel, an FCC commissioner, tweeted at the time 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 that “The vote on the TRACED Act is welcome news” adding “This legislation 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

FCC Chairman Pai has often called robocall scams a “scourge” and endorsed the action on Capitol Hill. His agency currently can make rules and take civil actions against robocall scammers but within certain limits. The bills aim to expand those limits and the powers of the commission.

The bill would broaden the FCC’s authority to levy civil penalties on people who ignore telemarketing rules.

The bill would also extend the window of time the FCC has to take action against “violations with intent” to four years from when a robocall is placed.

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 robocallers.

The bill take steps 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, the legislation under consideration is seen by many as a significant step but only a first step 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. 4 as the legislation has moved forward in Congress.

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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