US Says VoIP Firm Delivered Billions of Scam Robocalls

A Californian VoIP provider has been accused of breaking telemarketing rules by providing services that sent billions of illegal robocalls to US consumers.

The Department of Justice (DoJ) and Federal Trade Commission (FTC) on Friday announced a civil enforcement action against Los Angeles-headquartered XCast Labs.

The complaint alleges that XCast Labs services delivered pre-recorded marketing messages to recipients, many of whom are listed on the National Do Not Call Registry. These included scam calls impersonating government agencies and “other false or misleading statements to induce purchases.”

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Some calls also used spoofed caller ID information to hide the true origin of the caller and/or failed to identify the seller of the services being marketed, the DoJ claimed.

XCast Labs, which describes itself as “the nation’s leading supplier of business enterprise solutions,” is accused of continuing to allow its services to be used in this way, even after being told that the calls were illegal.  

“XCast Labs played a key role in helping telemarketers flood homes with unlawful robocalls, including robocalls impersonating the Social Security Administration,” said director of the FTC’s Bureau of Consumer Protection, Samuel Levine. “VoIP providers like XCast Labs that bury their heads in the sand when their customers use their services to break the law can expect to hear from the FTC.”    

The newly filed complaint seeks monetary civil penalties and a permanent injunction to prevent XCast Labs from future violations.

“The Department of Justice is committed to stopping telecommunications providers from enabling unscrupulous telemarketers to bombard American consumers with illegal robocalls,” said principal deputy assistant attorney general, Brian Boynton, head of the Justice Department’s Civil Division. “We will continue to work with the FTC to enforce the Telemarketing Sales Rule.”

Automated spam and scam calls continue to be a major global challenge for regulators and governments. The cost of these robocalls to victims will increase 9% from 2022 to reach $58bn globally this year, according to a report from Juniper Research.