Monday, April 15, 2019

TRACED Act Would Help Protect Consumers From Illegal Robocalls

Americans are being bombarded by illegal robocalls and spoofed calls from scammers. A bill approved unanimously by the Senate Commerce Committee on April 2, if ultimately enacted, would offer welcome help. The TRACED Act would sharpen the FCC's authority to penalize bad actors. If it becomes law, the Act also would ensure that voice providers implement new technologies to protect consumers from unwanted and fraudulent calls. 

A December 2018 order by the FCC stated that Americans received an estimated 30 billion robocalls in 2017. The problem has been growing. According to YouMail's Robocall Index, American consumers received 5.2 billion robocalls in March 2019 alone. Not all robocalls are illegal, as many Americans benefit from doctor's appointment reminders and school closure notifications. But an extraordinarily high number of mass-scale autodialed calls are unauthorized and violate Section 227 of the Communications Act. 

Additionally, scammers have engaged in "spoofing" or mass manipulation of caller ID information in order to deceive consumers about the origin of incoming calls, thereby facilitating fraud schemes. A Senate Report accompanying the RAY BAUM's Act of 2018 cited survey findings that "spoofing fraud affected 17.6 million Americans" over a 12 month period, "with that fraudulent activity costing them $8.6 billion." The cited survey was from 2014, and most believe that the frequency of spoofing and extent of losses caused by spoofing has climbed higher. 

Enter the TRACED Act, short for the "Telephone Robocall Abuse Criminal Enforcement and Deterrence Act." If the TRACED Act becomes law, it would bolster the FCC's authority to combat robocalls and spoofed calls. 

Importantly, the TRACED Act would direct the FCC to require voice providers to implement new SHAKEN/STIR technologies to authenticate caller ID information and thereby prevent spoofed calls and also block illegal robocalls. (The acronyms stand for "Signature-based Handling of Asserted information using toKENs" and "Secure Telephone Identity Revisited.") The Commission would be required to implement this directive for robocalls within 18 months of the Act becoming law and within 12 months for spoofed calls. The Commission would be empowered to adopt certain safe harbors that would shield voice providers from civil liability for pro-actively blocking calls using the SHAKEN/STIR system. 

Furthermore, the TRACED Act would establish a federal inter-agency task force headed by the FCC to consider opportunities and obstacles to combatting robocalls and spoofing. The working group would include federal agencies such as the Department of Justice, the Department of Homeland Security, and the Federal Trade Commission. State enforcement authorities would also be working group participants. Broader agency participation may be helpful because a high number of robocalling and spoofing schemes originate overseas. Under the Act, the interagency group would be required to send a report to Congress detailing prosecutions for robocalling and spoofing and identifying continuing obstacles to better protection for consumers. 

To its credit, the FCC already has proposed to implement anti-spoofing provisions contained in the RAY BAUM's Act of 2018. In February, the Commission issued its first Report on Robocalls, outlining the challenges and its ongoing initiatives to combat them. And in November 2018, Chairman Ajit Pai demanded major voice service providers adopt the SHAKEN/STIR system for call authentication by this year. 

Under the TRACED Act, the FCC also would have increased authority to penalize robocallers and spoofers that intentionally violate Section 227's "autodialing" with fines of up to $10,000 per violation. Of course, the Commission already has authority to pursue alleged autodialers with fines of up to $500 per violation. To date, robocalling and other autodialing activities also have prompted a swath of class action civil lawsuits that can include treble damage awards. But Commission authority to pursue heightened sanctions may help stop bad actors, provided the FCC adopts a clearer and narrower definition of prohibited "autodialing" under existing law. (Free State Foundation President Randolph May and I address that definitional issue in a February 2019 Perspectives from FSF Scholars paper.) 

A broad-based bipartisan consensus has emerged in support of the TRACED Act. The Senate Commerce Committee's 26-0 vote of approval for S.151 ought to encourage the full Senate to take up and pass the bill. Furthermore, the Senate Subcommittee on Communications, Technology, Innovation, and the Internet held a hearing on the Act on April 11. A companion bill, H.R. 1602, has been introduced House of Representatives.

On the merits, the TRACED Act is sound. To better combat robocallers and caller ID fraudsters, the 116th Congress should give the TRACED Act prompt consideration.