John Meyer: Slam the Phone on Telemarketers, Chairman Ajit Pai

The top regulator of U.S. phone calls has issued an ultimatum to telecom companies: Either stop robocallers from faking phone numbers or risk new regulations from the Federal Communications Commission.

FCC Chairman Ajit Pai’s warning is well-justified. By several different measures, the number of telemarketing and scam calls to cell phones has exploded over the last few years. Besides making good on Pai’s warning to telecom companies, the FCC should create new rules for telemarketers to protect consumers from intrusive calls and wasted time.

Americans are letting more than half their cell phone calls go to voicemail, according to a recent report. Consumers may have personal reasons for ignoring their phones, but the dramatic increase in cellular telemarketing, robocalls, and spam is undoubtedly the main culprit.

While the FCC has been active in doling out fines and adjusting regulations, Pai’s threat of “regulatory intervention” represents an escalation in the FCC’s war on spam. Victory won’t be easy, though.

Telemarketers employ a bag of tricks for subverting Caller ID. These include calling from different numbers, calling from foreign countries, and “spoofing,” which means falsifying the information showing up on call preview. “Neighborhood Spoofing,” or mimicking the call receiver’s area code, is a common practice.

When people refer to “telemarketers,” they probably mean one of three similar but distinct practices. There are sales calls from companies upselling to consumers with whom they already have a business relationship. There are also companies who have legally purchased consumer data and are using it to cold-call potential customers.

Then, last and worst, there are the scammers. First Orion, a Caller ID company, estimates scam calls constituted less than 4 percent of cellular calls in 2017. This year, they are projected to make up just under half.

According to the Washington Post, Americans received more than 26 billion robocalls last year. Robocalls are used by telemarketers from all three categories, more and less abusively. The rampant use of spoofing among robocall dialers was the primary source of Pai’s ire in his statement last week.

In 2003, Congress tried to strike a balance between consumer rights and business privilege by creating the National Do Not Call Registry. Technological advancement has made those protections obsolete, however, and disrupted the status quo in favor of telemarketers.

Americans are increasingly reliant on cell phones for both their work and social lives. At the same time, not everyone has the luxury of turning their phones on silent or ignoring unknown callers. While Caller ID companies like First Orion and others are offering consumers solutions to telemarketing abuse from the private sector, the FCC could make a few reasonable regulatory changes, as well.

The FCC should regulate from the position that consumers don’t want to be bothered. Dealing with companies that have preexisting business relationships with a consumer should be the easiest to tackle. With a few exemptions for consumer health or financial emergencies, the FCC should require customer opt-in for extracurricular calls

Reining in cold callers is trickier. Stopping telemarketers from buying phone data through companies like Google, Facebook, and Amazon would take an act of Congress, but The FCC can set strict rules on data buyers that are more consumer friendly.

All telemarketing calls, whether live or automated, should include clear “opt-out” mechanisms. These opt-outs would last for some set period of time and re-upping them after they expire should be simple.

The FCC should also require telemarketers to be more transparent about the companies they represent. That information, as well as opt-out numbers, should be communicated within the first seconds of a call.

Finally, a certain number of call rejections should count as an affirmative opt-out for future calls from a particular company. The onus should be on telemarketing companies to take the hint that their services are not required.

These regulations would benefit not only consumers but also the legitimate telemarketing industry as a whole. Scammers, incessant robocalls, and obnoxiously-relentless telemarketers are effectively poisoning the well for responsible actors. Stronger regulations might make consumers less likely to hang up on all commercial callers immediately, creating more room for good-faith salespeople.

To facilitate enforcement, all categories of telemarketing companies would need to keep extensive records on their calls and opt-out lists. Robust rules would hit the noncompliant with stiff penalties. In a perfectly just world, these “stiff penalties” might include nonstop, anonymous calls to executives and middle managers of offending companies, though such penalties would undoubtedly be cost prohibitive.

Pai’s exhortation to telecommunication companies shouldn’t be considered an idle threat. As the Net Neutrality saga proved, he’s not afraid to embrace controversy. Happily, he’s unlikely to face protests outside his home or receive death threats over new protections from telemarketing. To the contrary, successfully slamming the phone on spam callers could be the most popular thing the FCC has ever done.

John C. Meyer is Senior Researcher for Consumers’ Research, the nation’s oldest consumer organization.

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