The US government is seeking fines of up to $225 million from health insurance telemarketers who allegedly made a billion unwanted robocalls in violation of Federal Communications Commission rules.
The record-breaking penalty, announced Tuesday, is the largest proposed fine in FCC history. It targets Texas-based Rising Eagle for allegedly spamming consumers in more than a half-dozen states, including Arkansas, Indiana, Michigan, Missouri, North Carolina, Ohio and Texas.
The calls, which took place in the first half of 2019, allegedly attempted to sell consumers fake, short-term health insurance plans from major insurance carriers such as Aetna and Cigna. Victims lured in by the alleged scam were then pitched policies from other providers that were Rising Eagle’s clients, the FCC said.
Following the proposed FCC fine, attorneys general for the seven states filed a lawsuit on Tuesday seeking damages, penalty, and an injunction against Rising Eagle, JSquared Telecom and two men accused of controlling both businesses.
John C. Spiller, one of the men said to be behind Rising Eagle in the complaint, did not immediately respond to a request for comment. According to the FCC press release, Spiller admitted “that he knowingly called consumers on the Do Not Call list as he believed that it was more profitable to target these consumers,” that “he made millions of calls per day, and that he was using spoofed numbers.”
“We are making it clear that scamming consumers and — as we saw in this case — tricking them into buying products under false pretenses cannot and will not go unchecked,” said FCC Chairman Ajit Pai in a statement. “That is why the FCC and state officials are standing together and taking strong action to protect the American public from the scourge of spoofed robocalls.”
Tuesday’s enforcement action is part of a wider US government crackdown on unwanted robocalls, after years of consumer complaints. According to YouMail, a spam filtering service that monitors robocall activity, nearly 20 billion robocalls have been placed in the United States so far this year. Last year ended with more than 58 billion calls on YouMail’s index.
In recent months, the FCC has moved to mandate that telecom companies implement new call authentication technologies, and it has sought to impose more fines. But some critics, including within the agency, say federal authorities need to do more after grabbing headlines with massive penalties.
“So far, collections on these eye-popping fines have netted next to nothing,” said Democratic FCC Commissioner Jessica Rosenworcel in a statement. “Why? Well, one reason is that the FCC looks to the Department of Justice to collect on the agency’s fines against robocallers. We need them to help.”