59–006 

110TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 110–37 

PREVENTING HARASSMENT THROUGH OUTBOUND 

NUMBER ENFORCEMENT (PHONE) ACT OF 2007 

MARCH 8, 2007.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. CONYERS, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

[To accompany H.R. 740] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 740) to amend title 18, United States Code, to prevent caller 

ID spoofing, and for other purposes, having considered the same, 

reports favorably thereon without amendment and recommends 

that the bill do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 1 

Background and Need for the Legislation ............................................................. 2 

Hearings ................................................................................................................... 2 

Committee Consideration ........................................................................................ 3 

Committee Votes ...................................................................................................... 3 

Committee Oversight Findings ............................................................................... 3 

New Budget Authority and Tax Expenditures ...................................................... 3 

Congressional Budget Office Cost Estimate .......................................................... 3 

Performance Goals and Objectives ......................................................................... 4 

Constitutional Authority Statement ...................................................................... 4 

Advisory on Earmarks ............................................................................................. 4 

Section-by-Section Analysis .................................................................................... 5 

Changes in Existing Law Made by the Bill, as Reported ..................................... 6 

PURPOSE AND SUMMARY

The purpose of H.R. 740, the ‘‘Preventing Harassment through 

Outbound Number Enforcement (PHONE) Act of 2007,’’ is to prevent and mitigate identity theft and to ensure privacy by establishing criminal penalties for caller ID ‘‘spoofing.’’ The bill targets 

spoofing by prohibiting the use of caller ID information to commit 

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1Sid Kirchheimer, Scam Alert: Courthouse Con, AARP Bulletin, May 2006, available at 

http://www.aarp.org/bulletin/consumer/courthouse—con.html 2 Id. 

fraud or other abusive acts. The bill provides for felony penalties 

of up to five years in prison for violations committed for commercial 

gain. Abusive use of another person’s caller ID information without 

commercial motives is classified as a misdemeanor under the bill. 

BACKGROUND AND NEED FOR THE LEGISLATION

In recent years, spoofing has become more commonplace, leading 

to increased security vulnerabilities and identity theft. Spoofing involves using a false caller ID to hide the caller’s true identity in 

order to commit fraud or some other abusive act. Recently, spoofing 

technology has become readily available, either through the purchase of Internet telephone equipment or through Web sites specifically set up to spoof. For example, Voice-Over-Internet-Protocol 

(VOIP) equipment can easily be configured to populate the caller 

ID field with information of the user’s choosing. 

Since caller ID spoofing can make a call appear to come from any 

phone number, it has the ability to cause damaged credit and financial ruin. Call recipients sometimes divulge personal and private information to the spoofer, under the mistaken belief that it 

is a legitimate call. For example, the AARP (formerly the American 

Association of Retired Persons) has reported cases in which spoofers called individuals claiming that they had missed jury duty.1

These individuals were told that they would be subject to prosecution if they did not provide their Social Security number and other 

personal information. The phone number that appeared on their 

caller ID was from the local courthouse, so the victims assumed 

that the call was legitimate. Such incidences have been reported in 

at least 15 states, including the District of Columbia.2

In addition to identity theft, spoofing invades the privacy of those 

individuals whose caller ID is used to mask fraudulent calls, and 

therefore it can be used as a form of aggressive harassment. Additionally, many business functions, from credit card verification to 

automatic call routing, opt to use caller ID for security purposes, 

which spoofing can render useless. 

However, there are instances where caller ID information is altered for legitimate reasons. For example, a domestic violence shelter may alter caller ID information to ensure the safety of domestic 

violence victims. In addition, in many instances where telemarketers are hired by companies, the caller ID information transmitted is that of the actual company, allowing those receiving the 

call to have a reliable way to call back. 

HEARINGS

The Committee’s Subcommittee on Crime, Terrorism, and Homeland Security held one day of hearings on H.R. 740 on February 

6, 2007. Testimony was received from two witnesses: Congressman 

Tim Murphy of Pennsylvania, and Barry M. Sabin, Deputy Assistant Attorney General, Criminal Division, United States Department of Justice. 

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COMMITTEE CONSIDERATION

On February 6, 2007, the Subcommittee on Crime, Terrorism, 

and Homeland Security met in open session and ordered favorably 

reported the bill H.R. 740, by a voice vote, a quorum being present. 

On February 7, 2007, the Committee met in open session and ordered favorably reported the bill H.R. 740, without an amendment, 

by a voice vote, a quorum being present. 

COMMITTEE VOTES

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that there were 

no recorded votes during Committee consideration of H.R. 740. 

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee reports that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

NEW BUDGET AUTHORITY AND TAX EXPENDITURES

Clause 3(c)(2) of rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new 

budgetary authority or increased tax expenditures. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill, H.R. 545, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, February 15, 2007. 

Hon. JOHN CONYERS, Jr., Chairman, 

Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 740, the Preventing Harassment through Outbound Number Enforcement (PHONE) Act of 

2007. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Mark Grabowicz, who 

can be reached at 226–2860. 

Sincerely, 

PETER R. ORSZAG, 

DIRECTOR. 

Enclosure 

cc: Honorable Lamar S. Smith. 

Ranking Member 

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H.R. 740—Preventing Harassment through Outbound Number Enforcement (PHONE) Act of 2007. 

CBO estimates that implementing H.R. 740 would have no significant cost to the federal government. Enacting the bill could affect direct spending and revenues, but CBO estimates that any 

such effects would not be significant. H.R. 740 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would not affect the budgets of 

state, local, or tribal governments. 

H.R. 740 would establish a new federal crime for the fraudulent 

use of caller ID information. Because the bill would establish a new 

offense, the government would be able to pursue cases that it otherwise would not be able to prosecute. CBO expects that H.R. 740 

would apply to a relatively small number of offenders, however, so 

any increase in costs for law enforcement, court proceedings, or 

prison operations would not be significant. Any such costs would be 

subject to the availability of appropriated funds. 

Because those prosecuted and convicted under H.R. 740 could be 

subject to criminal fines, the federal government might collect additional fines if the legislation is enacted. Criminal fines are recorded 

as revenues, then deposited in the Crime Victims Fund and later 

spent. CBO expects that any additional revenues and direct spending would not be significant because of the small number of cases 

likely to be affected. 

Persons prosecuted and convicted under the bill also could be 

subject to the seizure of certain assets by the federal government. 

Proceeds from the sale of such assets would be deposited into the 

Assets Forfeiture Fund and spent from that fund, mostly in the 

same year. Thus, enacting H.R. 740 could increase both revenues 

deposited into the fund and direct spending from the fund. However, CBO estimates that any increased revenues or spending 

would be negligible. 

The CBO staff contact for this estimate is Mark Grabowicz, who 

can be reached at 226–2860. This estimate was approved by Peter 

H. Fontaine, Deputy Assistant Director for Budget Analysis. 

PERFORMANCE GOALS AND OBJECTIVES

The Committee states that pursuant to clause 3(c)(4) of rule XIII 

of the Rules of the House of Representatives, H.R. 740 will assist 

in combating caller ID spoofing, particularly spoofing perpetrated 

for commercial gain. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds the authority for this legislation in article I, section 8, clause 3 of the Constitution. 

ADVISORY ON EARMARKS

In accordance with clause 9 of rule XXI of the Rules of the House 

of Representatives, H.R. 740 does not contain any congressional 

earmarks, limited tax benefits, or limited tariff benefits as defined 

in clause 9(d), 9(e), or 9(f) of Rule XXI. 

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SECTION-BY-SECTION ANALYSIS

The following discussion describes the bill as reported by the 

Committee. 

Section 1. Short Title. 

This section cites the short title of the bill as the ‘‘Preventing 

Harassment through Outbound Number Enforcement (PHONE) 

Act of 2007.’’

Section 2. Caller ID Spoofing. 

This section amends the Federal criminal code (Chapter 47 of 

title 18, Fraud and False Statements) to prohibit using or providing, in interstate or foreign commerce, false caller ID information with an intent to defraud. The section also prohibits using or 

providing the caller ID information of an actual person, without the 

person’s consent, and with an intent to deceive the recipient about 

the caller’s identity. The section punishes attempts or conspiracies 

on equal footing with completed acts. It is important to note that 

it would not be an offense under this subsection to cause caller ID 

information to be blocked or withheld. 

The punishment provided in this section is graduated, reserving 

felony penalties for violations committed for commercial gain, for 

which the prescribed punishment is a fine and/or imprisonment for 

not more than 5 years. For violations not involving commercial 

gain, the section provides for misdemeanor penalties, for which the 

prescribed punishment is a fine and/or imprisonment for not more 

than 1 year). For example, those playing practical jokes without 

any commercial motive could be subject to the misdemeanor penalties, but not the felony penalties. 

Subparagraph (c) of the section exempts from the purview of the 

statute any lawful investigative, protective, or intelligence activity 

of a federal, state, or local law enforcement agency or of a U.S. intelligence agency, or any activity authorized for the protection of 

witnesses in criminal proceedings. 

Subparagraph (d) provides for forfeiture by a convicted party of 

the proceeds derived from the offense, along with equipment used 

to facilitate the offense. The forfeiture provision is modeled on the 

provision in the CAN-SPAM Act of 2003. See 18 U.S.C.A. 

§§ 1037(c). 

Subparagraph (e) sets forth definitions for the various terms. The 

definition of ‘‘telephone call’’ includes both conventional telephone 

calling and many types of Voice-Over-Internet Protocol (‘‘VOIP’’) 

services. 

Section 3. Other Specified Unlawful Activities for Money Laundering. 

Section 3 adds the bill (section 1040 of Title 18) as well as section 1037 of title 18 (fraud and fraud related activity in connection 

with email) to the list of ‘‘specified unlawful activities’’ in section 

1956(c)(7)(D) of title 18 (the money laundering statute). This makes 

certain financial transactions involving the proceeds of these violations money laundering offenses under 18 U.S.C. §§ 1956 and 1957, 

and provides for the civil forfeiture of such proceeds. See 18 U.S.C. 

§§ 981(a)(l)(C) (providing for the civil forfeiture of proceeds of 

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crimes designated as ‘‘specified unlawful activity’’). Existing law 

provides that comparable crimes, e.g., violations of 18 U.S.C. 

§§ 1030 (computer fraud and abuse) constitute specified unlawful 

activities. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (new matter is printed in italics 

and existing law in which no change is proposed is shown in 

roman): 

TITLE 18, UNITED STATES CODE 

* * * * * * * 

PART I—CRIMES 

* * * * * * * 

CHAPTER 47—FRAUD AND FALSE STATEMENTS 

Sec. 

1001. Statements or entries generally. 

* * * * * * * 

1040. Caller ID spoofing. 

* * * * * * * 

§ 1040. Caller ID spoofing 

(a) OFFENSE.—Whoever, in or affecting interstate or foreign 

commerce, knowingly uses or provides to another— (1) false caller ID information with intent to defraud; or 

(2) caller ID information pertaining to an actual person 

without that person’s consent and with intent to deceive the recipient of a call about the identity of the caller; 

or attempts or conspires to do so, shall be punished as provided in 

subsection (b). 

(b) PUNISHMENT.—Whoever violates subsection (a) shall—

(1) if the offense is committed for commercial gain, be fined 

under this title or imprisoned not more than 5 years, or both; 

and 

(2) be fined under this title or imprisoned not more than 

one year, or both, in any other case. 

(c) LAW ENFORCEMENT EXCEPTION.—It is a defense to a prosecution for an offense under this section that the conduct involved 

was lawfully authorized investigative, protective, or intelligence activity of a law enforcement agency of the United States, a State, or 

a political subdivision of a State, or of an intelligence agency of the 

United States, or any activity authorized under chapter 224 of this 

title. 

(d) FORFEITURE.—

(1) IN GENERAL.—The court, in imposing sentence on a person who is convicted of an offense under this section, shall 

order that the defendant forfeit to the United States—

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(A) any property, real or personal, constituting or traceable to gross proceeds obtained from such offense; and 

(B) any equipment, software or other technology used 

or intended to be used to commit or to facilitate the commission of such offense. 

(2) PROCEDURES.—The procedures set forth in section 413 

of the Controlled Substances Act (21 U.S.C. 853), other than 

subsection (d) of that section, and in Rule 32.2 of the Federal 

Rules of Criminal Procedure, shall apply to all stages of a 

criminal forfeiture proceeding under this section. 

(e) DEFINITIONS.—In this section— (1) the term ‘‘caller ID information’’ means information regarding the origination of the telephone call, such as the name 

or the telephone number of the caller; 

(2) the term ‘‘telephone call’’ means a call made using or received on a telecommunications service or VOIP service; 

(3) the term ‘‘VOIP service’’ means a service that— (A) provides real-time 2-way voice communications 

transmitted using Internet Protocol, or a successor protocol; 

(B) is offered to the public, or such classes of users as 

to be effectively available to the public (whether part of a 

bundle of services or separately); and 

(C) has the capability to originate traffic to, or terminate traffic from, the public switched telephone network or 

a successor network; 

(4) the term ‘‘State’’ includes a State of the United States, 

the District of Columbia, and any commonwealth, territory, or 

possession of the United States; and 

(5) a term used in a definition in this subsection has the 

meaning given that term in section 3 of the Communications 

Act of 1934 (47 U.S.C. 153). 

* * * * * * * 

CHAPTER 95—RACKETEERING 

* * * * * * * 

§ 1956. Laundering of monetary instruments 

(a) * * * 

* * * * * * * 

(c) As used in this section— (1) * * * 

* * * * * * * 

(7) the term ‘‘specified unlawful activity’’ means— (A) * * * 

* * * * * * * 

(D) an offense under section 32 (relating to the destruction of aircraft), section 37 (relating to violence at 

international airports), section 115 (relating to influencing, 

impeding, or retaliating against a Federal official by 

threatening or injuring a family member), section 152 (relating to concealment of assets; false oaths and claims; 

bribery), section 175c (relating to the variola virus), section 

215 (relating to commissions or gifts for procuring loans), 

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section 351 (relating to congressional or Cabinet officer assassination), any of sections 500 through 503 (relating to 

certain counterfeiting offenses), section 513 (relating to securities of States and private entities), section 541 (relating to goods falsely classified), section 542 relating to entry 

of goods by means of false statements), section 545 (relating to smuggling goods into the United States), section 549 

(relating to removing goods from Customs custody), section 

554 (relating to smuggling goods from the United States), 

section 641 (relating to public money, property, or records), 

section 656 (relating to theft, embezzlement, or 

misapplication by bank officer or employee), section 657 

(relating to lending, credit, and insurance institutions), 

section 658 (relating to property mortgaged or pledged to 

farm credit agencies), section 666 (relating to theft or bribery concerning programs receiving Federal funds), section 

793, 794, or 798 (relating to espionage), section 831 (relating to prohibited transactions involving nuclear materials), 

section 844 (f) or (i) (relating to destruction by explosives 

or fire of Government property or property affecting interstate or foreign commerce), section 875 (relating to interstate communications), section 922(1) (relating to the unlawful importation of firearms), section 924(n) (relating to 

firearms trafficking), section 956 (relating to conspiracy to 

kill, kidnap, maim, or injure certain property in a foreign 

country), section 1005 (relating to fraudulent bank entries), 1006 (relating to fraudulent Federal credit institution entries), 1007 (relating to Federal Deposit Insurance 

transactions), 1014 (relating to fraudulent loan or credit 

applications), section 1030 (relating to computer fraud and 

abuse), 1032 section 1037 (Fraud and related activity in 

connection with electronic mail), (relating to concealment of 

assets from conservator, receiver, or liquidating agent of financial institution), section 1040 (Caller ID spoofing), section 1111 (relating to murder), section 1114 (relating to 

murder of United States law enforcement officials), section 

1116 (relating to murder of foreign officials, official guests, 

or internationally protected persons), section 1201 (relating to kidnaping), section 1203 (relating to hostage taking), 

section 1361 (relating to willful injury of Government property), section 1363 (relating to destruction of property 

within the special maritime and territorial jurisdiction), 

section 1708 (theft from the mail), section 1751 (relating to 

Presidential assassination), section 2113 or 2114 (relating 

to bank and postal robbery and theft), section 2280 (relating to violence against maritime navigation), section 2281 

(relating to violence against maritime fixed platforms), section 2319 (relating to copyright infringement), section 2320 

(relating to trafficking in counterfeit goods and services), 

section 2332 (relating to terrorist acts abroad against 

United States nationals), section 2332a (relating to use of 

weapons of mass destruction), section 2332b (relating to 

international terrorist acts transcending national boundaries), section 2332g (relating to missile systems designed 

to destroy aircraft), section 2332h (relating to radiological 

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dispersal devices), section 2339A or 2339B (relating to providing material support to terrorists), section 2339C (relating to financing of terrorism), or section 2339D (relating to 

receiving military-type training from a foreign terrorist organization) of this title, section 46502 of title 49, United 

States Code, a felony violation of the Chemical Diversion 

and Trafficking Act of 1988 (relating to precursor and essential chemicals), section 590 of the Tariff Act of 1930 (19 

U.S.C. 1590) (relating to aviation smuggling), section 422 

of the Controlled Substances Act (relating to transportation of drug paraphernalia), section 38(c) (relating to 

criminal violations) of the Arms Export Control Act, section 11 (relating to violations) of the Export Administration Act of 1979, section 206 (relating to penalties) of the 

International Emergency Economic Powers Act, section 16 

(relating to offenses and punishment) of the Trading with 

the Enemy Act, any felony violation of section 15 of the 

Food Stamp Act of 1977 (relating to food stamp fraud) involving a quantity of coupons having a value of not less 

than $5,000, any violation of section 543(a)(1) of the Housing Act of 1949 (relating to equity skimming), any felony 

violation of the Foreign Agents Registration Act of 1938, 

any felony violation of the Foreign Corrupt Practices Act, 

or section 92 of the Atomic Energy Act of 1954 (42 U.S.C. 

2122) (relating to prohibitions governing atomic weapons) 

* * * * * * * 

Æ 

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