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Stopping Illegal Robocalls Where They Start

Service Provider Compliance with 47 CFR § 64.1200(n)(4) – Part I

The FCC’s regulations implementing the TCPA put many obligations on those initiating calling (and texting) campaigns. But there’s an important provision that can put a significant burden on telephone service providers. It says:

(n) A voice service provider must: (4) Take affirmative, effective measures to prevent new and renewing customers from using its network to originate illegal calls, including knowing its customers and exercising due diligence in ensuring that its services are not used to originate illegal traffic.

The FCC does not specify what those measures must be. They purposefully leave that up to each provider and the answer can be different depending on the kinds of services offered by the provider and the nature of their customers.

Regulators generally write their rules with careful consideration of the text. Here we look at the implications of specific words and phrases:

Affirmative: This means the provider has to act BEFORE something goes wrong, not merely as a reaction to a traceback or other third-party notification. If you learn of an illegal call that went through your network, it means your current “measures” are failing.

Effective: There is no “A for effort” here. You can have extensive measures in place, but if illegal calls are still getting through, then they are not effective.

New and renewing: Keeping bad actors off your network is part of the mandate. But this rule puts this obligation on you with respect to all your customers, even the ones that have behaved well in the past. Service providers do not continue accepting calls from customers that do not pay their bills. So every time a customer pays you, they are “renewing” their relationship with you and you need to ensure they are not now and will not in the future send illegal calls.

Using its network to originate: The rule applies to all Voice Service Providers; it is not restricted to only “originating” providers. So even if you are not directly connected to the caller, but are instead in the provider chain, you need to be mindful of this rule. Your customer (another service provider) is potentially using your network to originate illegal calls (for their customer further upstream).

Illegal: To fulfill your obligation under this rule, you have to be familiar with all the regulations pertaining to telephone calls and texts. That is a tall order. Fraud is always illegal – a caller cannot claim to represent Amazon or PayPal or Microsoft when they do not; a caller cannot impersonate a government official; a caller cannot make false statements (telling someone they have won the lottery or there is a warrant for their arrest). But rules pertaining to the telephone are extensive and nuanced and come from many different agencies: FCC, FTC, CFPB and every state, to name a few. Attorneys specializing in these rules are likely the only resource available to give qualified guidance.

Knowing Its customers: The FCC is giving a clue here that KYC needs to be a part (but not the entirety) of the “measures.” This means more than just having a name and contact information. You have to know how they are using your network, and that means asking enough questions to have a thorough understanding of the types of calls they are making and making sure that comports with other data about the customer.

Exercising due diligence: The dictionary says this is “reasonable steps taken by a person in order to satisfy a legal requirement.” The “requirement” here is “ensuring that its services are not used to originate illegal traffic.” Unless and until your “steps” (“measures”) are achieving that goal, they are not satisfying the requirement.

Reasonable: This word is not in (n)(4) but we see it in the common definition of “due diligence.” What is “reasonable” in this context? It is reasonable to ask whatever questions are necessary, and insist on credible answers, as part of KYC. It is reasonable to deploy any available technology, even if it eats into profits, as part of due diligence. More in our next article.

Knowingly: This word is conspicuous by its absence. Some regulations only come into play if a party is aware of some circumstance or transgression. But not here. This regulation does not provide an out because the service provider did not know what their customer was doing, or was ignorant of some applicable law.

It is evident that (n)(4) is onerous. There is no analogy to FedEx or Zoom or Google; they do not have an (n)(4). This regulation is specific to those who elect to operate in the domain of the Public Telephone Network.

Note that the FTC has a similar provision its its Telemarketing Sales Rule. § 310.3(b) states: Assisting and facilitating. It is a deceptive telemarketing act or practice and a violation of this part for a person to provide substantial assistance or support to any seller or telemarketer when that person knows or consciously avoids knowing that the seller or telemarketer is engaged in any act or practice that violates §§ 310.3(a), (c) or (d), or § 310.4 of this part. That regulation does have a “knows or consciously avoids knowing” provision. But as we show in the next article, service providers have many opportunities to know what their caller customers are doing.

A service provider that finds itself the target of a government regulator or enforcer, or in court before a judge or jury, will want to show that they have done everything possible and more to comply with these rules.

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