The Federal Trade Commission today took action against Voice over Internet Protocol (VoIP) service provider VoIP Terminator, Inc., a related company, and the firms’ owner for assisting and facilitating the transmission of millions of illegal prerecorded telemarketing robocalls, including those they knew or should have known were scams, to consumers nationwide. Many of the calls originated overseas, and related to the COVID-19 pandemic, with the defendants allegedly failing to act as a gatekeeper to stop them from entering the country.
Acting on the Commission’s behalf, the U.S. Department of Justice filed the complaint announced in federal district court, along with an order permanently stopping the defendants from such illegal conduct. The order also includes a suspended civil penalty of more than $3 million.
“These defendants helped scammers blast millions of illegal robocalls into our homes,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “This is our third case in the last two years against VoIP service providers, who should take note of what happens when they ignore the law.”
The FTC’s complaint alleges Florida-based defendant VoIP Terminator, Inc., Virginia-based defendant BLMarketing, Inc., and the companies’ owner Muhammad Usman Kahn facilitated violation of the FTC’s Telemarketing Sales Rule (TSR) during their operation as a VoIP service provider.
Specifically, according to the complaint, the defendants continued to provide VoIP services to customers despite knowing or consciously avoiding knowing the customers were: 1) using the services to place calls to numbers on the FTC’s Do Not Call (DNC) Registry; 2) delivering prerecorded messages; and 3) displaying spoofed caller ID services to callers involved in scams related to credit card interest rate reduction, tech support, and the COVID-19 pandemic.
The FTC’s proposed order settling the complaint requires VoIP Terminator to:
- Stop robocalling consumers. The order bans the company from assisting and facilitating abusive telemarketing practices. This provision includes the use of VoIP services.
- Halt TSR violations. The company is prohibited from further violations of the TSR or assisting others in doing so.
- Create new procedures to block suspected robocalls. The order bans VoIP Terminator from providing services or assigning telephone numbers without having ongoing automated procedures in place to block calls that display unassigned, invalid, or unauthenticated numbers.
- Require VoIP Terminator to screen customers. For current and prospective customers, the company must ensure it does not provide VoIP services to suspected telemarketers. The order further requires the defendants to immediately terminate, or avoid entering, business relationships with customers found to be violating the TSR.
While the order imposes a $3,256,190 judgment against the defendants, it has been suspended based on the company’s inability to pay.
The Commission vote to authorize the staff to refer the complaint to the DOJ and to approve the proposed consent decree was 4-0. The DOJ filed the complaint and proposed consent decree on behalf of the Commission in U.S. District Court for the Middle District of Florida.