June 3, 2020

FCC Moves to Implement Call Compliance Penalties of Traced Act

In an effort to control abuse by robocallers, the US Congress passed the TRACED Act at the end of 2019. This legislation ordered telecom carriers to install a number-authentication system that allows consumers to more easily identify robocallers. While carriers must protect consumers against call spoofing, the FCC will enact stricter call compliance penalties. Although this act is months old, it did not immediately curb the number of robocalls. This is partly because imposing fines was not occurring and there was confusion about consumer consent.

TRACED Act Call Compliance Penalties

However, the landscape for robocallers has drastically changed. FCC recently announced an enforcement process that should benefit consumers but pose challenges to call centers. To keep your call center in compliance, you need to understand the laws and subsequent FCC enforcement efforts.

FCC Enforces Call Compliance Penalties

The FCC announced enforcement action on May 1, asserting under Section 3 of the Traced Act that requirements to provide advanced notice will no longer occur. Section 3 of the act states that the FCC does not need to warn offenders of potential action. Instead, the FCC will immediately ask for a "monetary forfeiture" and the payment of fines by those who knowingly violate the TRACED ACT by continuing their illegal robocalls.

The FCC made additional modifications to its rules in order to be consistent with the legislation. They include:

  • Levying and enforcing fines of up to $26,000 per illegal robocall that intentionally violates the act.
  • Extending the statute of limitations to four years for those companies intentionally violating 227(b), which pertains to calls made with an automatic dialing system with a "pre-recorded, or artificial voice."
  • Extending the statute of limitations to four years for those companies violating 227(b), which outlaws “misleading or inaccurate caller identification information with the intent to defraud, cause harm, or wrongfully obtain anything of value.”

Companies who are intentionally violating the law will potentially suffer huge financial losses. Those call centers who are scamming people will, in effect, get what they deserve. However, legitimate call centers could find themselves in serious trouble if they inadvertently violate the act. They will not receive a warning citation by the FCC. At $26,000 per call, the negative effects will be immediate and severe.

The TRACED Act itself also allows for asset forfeiture and a potential prison sentence of two years.

Consumer Protections

The STIR/SHAKEN standards currently in place require that calls channeled through "interconnected phone networks" must have their caller ID verified by the originating phone carrier and other carriers involved in the call before it can actually reach consumers. These regulations make spoofing and other scams much harder to perpetrate.

The TRACED Act is meant to protect consumers from these common scams as well. For instance, some consumers were recently targeted by robocalls designed to defraud them of their economic stimulus payments. Other scams involving Social Security payments, IRS collections, etc., have continued to thrive. The FCC's enforcement actions should begin to curb these efforts and protect US citizens from the millions of bogus robocalls that have besieged them for years.

Call Center Effects

TRACED Act enforcement has the potential to help and harm legitimate call centers. Once most of the "bad actors" have been shut down, the general public should begin to regain trust in call centers and not reject them as a matter of course. As it is now, many citizens refuse to listen to any type of marketing pitch since it may be a scam. Once consumers don't fear calls from scammers, call centers should see a more positive response to their efforts.

These enforcement provisions may also have a negative effect on legitimate call centers as they may be wrongly identified and blocked. They may also receive fines for violating the law, which can lead to some costly legal battles.

Experts warn that between 10 - 30% of legitimate business calls are subject to wrongful blocking. This means that outbound calls concerning delivery dates, appointment confirmations and even prescription pick-ups can be blocked. These calls are meant to improve the lives of consumers, and blocking them can be harmful.

Call Center Precautions

Outbound call centers, particularly third-party concerns, face challenges due to the new enforcement efforts. To limit problems, call centers should take several precautions, including:

  • Actively enforcing all federal, state and local call regulations.
  • Producing reports on caller ID for outbound calls.
  • Eliminating carriers with poor records on fraud.
  • Improving customer consent processes.

Constant vigilance and adherence to the TRACED ACT and TCPA regulations are the best protections for legitimate call centers. They are also the only way for you to avoid crushing call compliance penalties.

Efforts to curtail robocalls have made call center management more challenging. The recent FCC enforcement efforts may fill you with trepidation, but proper preparation and adherence to the letter of the law should keep your company out of the FCCs crosshairs. With fewer call spoofing scams, legitimate call centers may benefit from a more positive consumer attitude.

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