The Federal Communications Commission (FCC) issued a fine of $299,997,000 for auto warranty scam robocalls made by the largest illegal robocall operation the agency has ever investigated. The nearly $300 million fine is the largest fine in FCC history.
The multi-national robocall enterprise did business as Sumco Panama, Virtual Telecom, Davis Telecom, Geist Telecom, Fugle Telecom, Tech Direct, Mobi Telecom and Posting Express.
The FCC says that since at least 2018, this robocall enterprise operated a complex scheme designed to facilitate the sale of vehicle service contracts under the false claim of selling auto warranties. Two of the central players of the operation, Roy M. Cox and Aaron Michael Jones, were already under lifetime bans against making telemarketing calls following lawsuits by the Federal Trade Commission and the State of Texas.
The nearly $300 million fine was levied after the FCC found the enterprise executed a scheme to make more than five billion robocalls to more than 500 million phone numbers during a three-month span in 2021.
The enterprise violated multiple federal laws, including:
- Violating spoofing laws by using more than one million different caller ID numbers in an attempt to disguise the true origin of the robocalls,
- Making pre-recorded voice calls to mobile phones without prior express consent,
- Placing telemarketing calls without written consent,
- Dialing numbers included on the National Do Not Call Registry,
- Failing to identify the caller at the start of the message, and
- Failing to provide a call-back number that allowed consumers to opt out of future calls.
In 2022, the FCC directed all U.S.-based voice service providers to cease carrying traffic associated with the enterprise. As a result, these illegal auto warranty robocalls dropped by 99%. That enforcement action was taken in coordination with the Ohio Attorney General’s Office, which brought a lawsuit under the Telephone Consumer Protection Act against several entities and individuals associated with the enterprise.
The Commission also proposed a fine and offered the parties a chance to respond, which they did not do, resulting in the unprecedented fine. The FCC said in a statement, "Should the parties not pay the fine promptly, the matter will be referred to the U.S. Department of Justice for collection."
The FCC’s Robocall Response Team also announced new robocall investigation partnerships with the Attorneys General of Hawaii and New Mexico. Forty-six states and the District of Columbia and Guam have now signed Memoranda of Understanding to join with the FCC’s Enforcement Bureau to work together to combat illegal robocalls.
“I want to thank the Enforcement Bureau’s Telecommunications Consumers Division for its groundbreaking work on this case, and we will continue to work with our federal and state partners to hold these entities and others engaged in similar conduct accountable,” stated FCC Enforcement Bureau Chief Loyaan Egal.