Consumer Finance Insights
August 10, 2017

FTC Uses Consumer Complaints to Combat Alleged Robocalls

The Federal Trade Commission (FTC) is using consumer complaints in its effort to quell alleged illegal robocalls.  On September 1, 2009, the FTC issued rules prohibiting robocalls made without a consumer’s prior written authorization.  Yet, the FTC’s research shows that robocalls persist.  According to the FTC’s Do Not Call Reported Calls Data website—which contains data about the telephone number, date, time, and subject matter of the call, the state where the consumer receiving the call was located, and whether the call was reportedly a robocall—over 1.9 million complaints regarding robocalls were made between January and May 2017 alone.  In fact, the FTC receives tens of thousands of complaints about robocalls daily, making robocalls the most complained-about issue the FTC oversees.

The FTC has decided to release consumer complaints about alleged robocalls to private companies that work to block robocalls using, for example, mobile apps, features built into mobile phones, cloud-based services, call-blocking devices, and phone carrier services. Since the technologies that block robocalls often use lists of telephone numbers about which consumers have complained, the FTC considers consumer complaints to be a critical element of its call-blocking initiative.

This step by the FTC is the latest in its effort to increase control in the area of automated telemarketing calls.  To date, the FTC has brought 131 enforcement actions based on allegations of robocalling and related violations, resulting in $49 million in civil penalties and $71 million in payments for redress or disgorgement.

The largest of those settlements was a 2013 consent order between the FTC and Mortgage Investors Corporation, a national refinancer of veterans’ home loans.  Under the consent order, Mortgage Investors Corporation was required to pay a civil penalty of $7.5 million.  In that litigation, the FTC claimed that Mortgage Investors Corporation had violated the Do-Not-Call provisions of the Telemarketing Sales Rule and the Mortgage Acts and Practices – Advertising Rule by allegedly calling consumers on the National Do Not Call Registry, failing to remove consumers’ telephone numbers from its call list following consumers’ requests, and misrepresenting the terms of loan products on telemarketing calls.

In light of the FTC’s continued focus on robocalls, consumer financial services providers should review their policies and practices to ensure that they are compliant with all Do-Not-Call provisions of the Telemarketing Sales Rule, which can be found at 16 C.F.R. § 310 et seq.

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