Prepared Statement of 

The Federal Trade Commission 

 

Before the 

United States Senate 

Committee on Commerce, Science and Transportation 

Subcommittee on Consumer Protection, Product Safety, and Insurance 

on 

Stopping Fraudulent Robocall Scams: Can More Be Done? 

Washington, DC 

July 10, 2013 

 
1 

 Chairman McCaskill, Ranking Member Heller, and members of the Subcommittee, I am 

Lois Greisman, Associate Director of the Division of Marketing Practices, Bureau of Consumer 

Protection at the Federal Trade Commission (“Commission” or “FTC”).1

 I appreciate the 

opportunity to appear before you today to discuss the Commission’s initiatives to fight illegal 

robocalls. 

 In 2003, the FTC responded to enormous public frustration with unsolicited sales calls 

and amended the Telemarketing Sales Rule (“TSR”) to create a national Do Not Call Registry.2 

The Registry, which currently includes more than 221 million telephone numbers,3 has been 

tremendously successful in protecting consumers’ privacy from the unwanted calls of tens of 

thousands4

 of legitimate telemarketers who participate in the Registry each year.5 More recently, 

changes in technology led to a new source of immense frustration – the blasting of prerecorded 

messages using Voice over Internet Protocol (“VoIP”) technology.6 In 2008, the Commission 

 1

 The views expressed in this statement represent the views of the Commission. 

My oral presentation and responses to questions are my own and do not necessarily reflect the 

views of the Commission or any individual Commissioner. 

2

 68 Fed. Reg. 4580 (Jan. 29, 2003); 16 C.F.R. Part 310. The FTC issued the TSR 

pursuant to the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. 

§§ 6101-6108. 

3

 See Appendix A, National Do Not Call Registry Active Registrations and 

Complaint Figures. 

4

 For example, in fiscal year 2012, more than 28,000 telemarketers accessed the Do 

Not Call Registry. National Do Not Call Registry Data Book FY 2012 at 8 (Oct. 2012), 

available at http://www.ftc.gov/os/2012/10/1210dnc-databook.pdf. 

5

 Humorist Dave Barry called the Do Not Call Registry “the most popular federal 

concept since the Elvis stamp.” See Dave Barry, Idea for telemarketers: Hang up and go away, 

DESERET NEWS, Aug. 31, 2003, available at http://www.deseretnews.com/article/1006979/Ideafor-telemarketers-Hang-up-and-go-away.html. 
2 

responded by amending the TSR to address this problem, prohibiting the vast majority of 

prerecorded sales calls unless the recipient has provided express written consent to receive 

them.7

 

Illegal robocalls are still a significant consumer protection problem today, because they 

repeatedly disturb consumers’ privacy and many of them peddle fraudulent goods and services 

that cause significant economic harm. Therefore, the FTC is using every tool at its disposal to 

fight them.8 This testimony describes the Commission’s efforts to stop telemarketer violations, 

including our aggressive law enforcement, initiatives to spur technological solutions, and broad 

consumer and business outreach. 

I. Do Not Call and Robocall Law Enforcement

Since the Do Not Call Registry was established in 2003,9 the Commission has fought 

vigorously to protect consumers’ privacy from unwanted calls. Indeed, two weeks ago on the 

 6

 See Section II(A), infra. 

7

 73 Fed. Reg. 51164 (Aug. 29, 2008); 16 C.F.R. Part 310.4(b)(1)(v). The FTC had 

already brought robocall-related enforcement actions prior to 2008, alleging that defendants 

made illegal “abandoned calls,” because their robocalls did not “connect the call to a sales 

representative within two seconds of the completed greeting of the person who answer[ed].” 

16 C.F.R. Part 310.4(b)(1)(iv). Any telemarketing campaign consisting solely of prerecorded 

messages would always violate that provision, and would not meet the abandoned call safe 

harbor requirements under the TSR. See 16 C.F.R. Part 310.4(b)(4). Nonetheless, the 

Commission amended the TSR to explicitly prohibit unsolicited robocalls, considering it 

beneficial to make the prohibition more prominent. 

8

 See FTC Robocall Action Plan, http://www.ftc.gov/robocalls. 

9

 In 2003, two different district courts issued rulings enjoining the Do Not Call 

Registry. See Press Release, FTC Files Motion to Stay Pending Appeal in Oklahoma DNC 

Ruling (Mar. 24, 2003), available at http://www.ftc.gov/opa/2003/09/dncok.shtm; Press Release, 

Statement of FTC Chairman Timothy J. Muris (Sept. 26, 2003), available at

http://www.ftc.gov/opa/2003/09/dnc030926.shtm. Congress addressed the first decision in 

summary fashion by enacting HR 3161 in one day. See “HR 3161 (108th) Do-Not-Call-Registry 

bill,” http://www.govtrack.us/congress/bills/108/hr3161; Press Release, Statement of FTC 

Chairman Timothy J. Muris (Sept. 25, 2003), available at
3 

10th anniversary of the Do Not Call Program, the Commission announced that Mortgage 

Investors Corporation, one of the nation’s leading refinancers of veterans’ home loans, will pay 

$7.5 million, the largest Do Not Call fine the FTC has ever collected.10 This case is the 105th

enforcement action since the Commission began enforcing the Do Not Call provisions of the 

TSR in 2004.11 Through these enforcement actions, the Commission has sought civil penalties,12

restitution for victims of telemarketing scams, and disgorgement of ill-gotten gains from the 298 

companies and 234 individuals involved. Although a number of cases remain in litigation, the 

81 cases that have concluded thus far have resulted in orders totaling more than $126 million in 

civil penalties and $741 million in redress or disgorgement. In the first several years of the 

Registry’s existence, consumers reported that the Do Not Call program was highly effective in 

reducing the number of unwanted telemarketing calls they received.13 

 

http://www.ftc.gov/opa/2003/09/dnc030926.shtm. The 10th Circuit reversed the second district 

court decision on February 17, 2004. See Press Release, Appeals Court Upholds 

Constitutionality of National Do Not Call Registry (Feb. 17, 2004), available at

http://www.ftc.gov/opa/2004/02/dncappeal.shtm. 

10 See Press Release, Mortgage Broker Targeting U.S. Servicemembers Will Pay 

Record $7.5 Million to Settle Alleged Telemarketing Violations (June 27, 2013), available at

http://www.ftc.gov/opa/2013/06/donotcall.shtm. 

11 The 105 Do Not Call actions include cases that involve the rule provisions 

prohibiting unauthorized robocalls, which also invade consumers’ privacy and may be deceptive 

as well. 

12 As is true of for all TSR violations, telemarketers who violate the Do Not Call 

provisions are subject to civil penalties of up to $16,000 per violation. 15 U.S.C. § 45(m)(1)(A); 

16 C.F.R. 1.98(d). 

13 For example, in October 2007, an independent study by Harris Interactive® found 

that of the 72% of Americans who had registered their telephone numbers for the Do Not Call 

Registry, 18% reported that they currently received no telemarketing calls, 59% reported that 

they still received some, but far fewer than before they signed onto the Registry, and 14% said 

they received some, but a little less than before they registered. Previous surveys had similar 

results. See Annual Report to Congress for FY 2007 Pursuant to the Do-Not-Call 
4 

On September 1, 2009, new TSR provisions went into effect prohibiting the vast majority 

of sales robocalls,14 unless the telemarketer has the consumer’s prior written authorization to 

transmit such calls.15 The robocall provisions cover prerecorded calls to all consumers, 

including those who have not registered their phone number on the Do Not Call Registry. The 

Commission has been aggressive in enforcing prohibitions on robocalls, bringing 34 cases 

involving illegal prerecorded calls against 97 companies and 77 individuals.16 These actions 

have shut down entities responsible for billions of illegal robocalls, and the 22 cases that have 

concluded thus far have resulted in orders totaling more than $51 million in civil penalties and 

$202 million in redress or disgorgement. Some of the Commission’s early robocall cases were 

against companies with household names such as Dish Network, DIRECTV, and Talbots.17

Yet increasingly, robocalls that plague consumers are initiated by fraudsters, who often 

hide out in other countries in an attempt to escape detection and punishment. One example is the 

 

Implementation Act on Implementation of the National Do Not Call Registry, at 4-5, n.10 (July 

2008), available at http://www.ftc.gov/os/2008/07/P034305FY0dncreport.pdf. 

14 Like the other provisions of the TSR, the robocall provisions do not apply to nonsales calls, such as calls placed by charities or those that are pure political, informational, or 

survey calls. See generally “Complying with the Telemarketing Sales Rule” (Feb. 2011), 

available at http://business.ftc.gov/documents/bus27-complying-telemarketing-sales-rule. 

15 16 C.F.R. Part 310.4(b)(1)(v). Limited exceptions exist for calls that deliver a 

healthcare message made by an entity covered by the Health Insurance Portability and 

Accountability Act, 16 C.F.R. Part 310.4(b)(1)(v)(D), and for certain calls placed by 

telemarketers who solicit charitable contributions, 16 C.F.R. Part 310.4(b)(1)(v)(B). 

16 The FTC filed 12 of the 34 cases before the rule change went into effect on 

September 1, 2009. 

17 See U.S. v. The Talbots, Inc., No. 10-cv-10698 (D. Mass. Apr. 27, 2010), 

available at http://www.ftc.gov/opa/2010/04/talbots.shtm; U.S. v. Dish Network, LLC, No. 3:09-

cv-03073 (C.D. Ill. Feb. 4, 2010), available at http://www.ftc.gov/opa/2009/03/echostar.shtm; 

U.S. v. DIRECTV, Inc., No. 09-02605 (C.D. Cal. Apr. 23, 2009), available at

http://www.ftc.gov/opa/2009/04/directv.shtm. 
5 

defendants in FTC v. Navestad, who the Commission successfully traced and sued even after 

they attempted to hide their identities through fake caller IDs, shifting foreign operations, and 

name changes. The court found that the defendants made in excess of eight million robocalls, 

and ordered them to pay $30 million in civil penalties and give up more than $1.1 million in illgotten gains.18 Unfortunately, the two defendants are currently in hiding overseas. 

A. Coordination with Law Enforcement Partners 

1. State, Federal, and International Coordination 

As the law enforcement challenges associated with illegal telemarketing have increased, 

the FTC’s relationships with other agencies have become ever more important. The Commission 

has robust collaborative relationships with state law enforcers, including through the National 

Association of Attorneys General Do Not Call working group. In addition, the FTC regularly 

works with the Federal Communications Commission (“FCC”), the Department of Justice, the 

U.S. Postal Inspection Service, and U.S. Attorneys’ Offices across the country. The Commission 

also coordinates with its counterparts in other countries on particular cases and broader strategic 

matters such as caller ID “spoofing” – the practice of faking a call’s identifying information. 

The FTC’s collaboration with its partners takes many different forms, including sharing 

information and targets, assisting with investigations, and working together on long-term policy 

initiatives. The agency also coordinates with various partners to bring law enforcement 

“sweeps” – multiple simultaneous law enforcement actions – that focus on specific types of 

telemarketing fraud.19 One recent example is a concerted attack on illegal robocalls purporting 

 18 FTC v. Navestad, No. 09-CV-6329 (W.D.N.Y. Mar. 23, 2012), available at

http://www.ftc.gov/opa/2012/04/cashgrant.shtm. 

19 The following describe some of the telemarketing and robocall sweeps that the 

FTC and its law enforcement partners have conducted over the past several years: Press Release, 

FTC Leads Joint Law Enforcement Effort Against Companies that Allegedly Made Deceptive 
6 

to be from “Rachel” or others from “Cardholder Services,” which pitch a supposedly easy way to 

save money by reducing consumers’ credit card interest rates. The FTC brought five cases 

against companies that were allegedly responsible for millions of these illegal calls. The 

Commission simultaneously announced that state law enforcement partners in Arizona, 

Arkansas, and Florida had filed separate law enforcement actions as part of the same sweep.20

2. Referrals for Criminal Prosecution 

Although the Commission does not have criminal law enforcement authority, it 

recognizes the importance of criminal prosecution in deterrence. Accordingly, the Commission 

routinely works with federal and state criminal law enforcers through its Criminal Liaison Unit 

(“CLU”). Since CLU’s launch in 2003, hundreds of fraudulent telemarketers have found 

themselves facing criminal charges and prison time. One example is the Voice Touch case, 

which involved the use of robocalls to advertise an auto warranty scam. The FTC case shut 

down the scam and resulted in almost $3.2 million in redress to consumers,21 and the Office of 

 

“Cardholder Services” Robocalls (Nov. 1, 2012), available at

http://www.ftc.gov/opa/2012/11/robocalls.shtm; Press Release, FTC Settlements Put Debt Relief 

Operations Out of Business (May 26, 2011), available at 

http://www.ftc.gov/opa/2011/05/amsdynamic.shtm; Press Release, FTC Sues to Stop Robocalls 

with Deceptive Credit Card Interest-Rate Reduction Claims (Dec. 8, 2009), available at

http://www.ftc.gov/opa/2009/12/robocall.shtm; Press Release, FTC Cracks Down on Scammers 

Trying to Take Advantage of the Economic Downturn (July 1, 2009), available at

http://www.ftc.gov/opa/2009/07/shortchange.shtm; Press Release, FTC Announces “Operation 

Tele-PHONEY,” Agency’s Largest Telemarketing Sweep (May 20, 2008), available at

http://www.ftc.gov/opa/2008/05/telephoney.shtm. 

20 See Press Release, FTC Leads Joint Law Enforcement Effort Against Companies 

that Allegedly Made Deceptive “Cardholder Services” Robocalls (Nov. 1, 2012), available at

http://www.ftc.gov/opa/2012/11/robocalls.shtm. 

21 Press Release, FTC Returns Almost $3.2 Million to Auto Warranty Robocall 

Victims (Aug. 31, 2011), available at http://www.ftc.gov/opa/2011/08/voicetouch.shtm; FTC v. 

Voice Touch, Inc., No. 09CV2929 (N.D. Ill. Aug. 23, 2010), available at

http://www.ftc.gov/os/caselist/0823263. 
7 

the U.S. Attorney for the Southern District of Illinois subsequently brought criminal charges. 

Three of the fraud’s principals have pleaded guilty and gone to prison, with the two leaders of 

the scheme each sentenced to five years.22

Another example is Kara Singleton Adams, the leader of a scam that used robocalls to 

sell worthless credit card interest rate reduction services. Not only did the Commission act to 

shut down the operation,23 a federal jury in Atlanta subsequently convicted Adams on charges of 

wire fraud and conspiracy, among other things. In 2012, the court sentenced her to more than 17 

years’ imprisonment. Three of her associates in the scheme also went to prison.24

B. Strategic Targeting for Maximum Impact 

The Commission constantly seeks innovative ways to maximize its resources and its 

impact on those responsible for illegal robocalls.25 Often, telemarketers’ deceptive and abusive 

practices are facilitated by third parties, such as auto-dialers, which provide the software needed 

to blast out millions of calls, and payment processors, which enable fraudulent telemarketers to 

reach into consumers’ bank accounts. The FTC has increasingly targeted gatekeepers that have 

 22 Department of Justice (“DOJ”) Press Release, “Auto Warranty” Telemarketer 

Pleads Guilty (June 15, 2012), available at

http://www.justice.gov/usao/ils/News/2012/Jun/06152012_Dolan%20Press%20Release.html; 

DOJ Press Release, Update on Transcontinental Warranty Case (Oct. 31, 2011), available at

http://www.justice.gov/usao/ils/Programs/VWA/transcontinental.html. 

23 FTC v. Econ. Relief Techs., LLC, No. 09-CV-3347 (N.D. Ga. July 22, 2010), 

available at http://www.ftc.gov/os/caselist/0923118. 

24 DOJ Press Release, Adams Sentenced to Over 17 Years in Prison for MultiMillion Dollar Telemarketing Fraud Scheme (Feb. 9, 2012), available at 

http://www.justice.gov/usao/gan/press/2012/02-09-12.html. 

25 As an example, the FTC recently created a robocall “honeypot,” which is a group 

of phone numbers from around the country that the Commission controls, permitting it to receive 

robocalls directly. This allows the Staff to quickly amass information about who is making the 

calls and to have recordings in-house, thus facilitating a more rapid law enforcement response. 
8 

tended to service large numbers of rogue telemarketers and therefore offer a way to strike a blow 

to many law-breakers with only one case. 

Money flows in many directions within a robocall operation.26

 First, the Commission aggressively pursues companies that provide the equipment and 

software necessary to send out millions of calls, sometimes referred to as “voice broadcasters” or 

“autodialers.”27 One example is FTC v. Asia Pacific Telecom, Inc., in which the FTC alleged 

that defendants were responsible for violating the TSR by placing billions of prerecorded phone 

 26 The PSTN is the “Public Switched Telephone Network.” It consists of 

transmission facilities (e.g., phone lines, fiber optic cables, microwave transmission links, 

cellular radios, communication satellites, etc.) and switching facilities (central office switches, 

databases for 800 number translation, gear for cellular handoffs, multiplexors, etc.). 

27 U.S. v. Skyy Consulting, Inc., also d/b/a CallFire, No. 13-CV-2136 (N.D. Cal. 

May 14, 2013), available at http://www.ftc.gov/os/caselist/1223011; FTC v. Asia Pac. Telecom, 

Inc., No. 1:10-3168 (N.D. Ill. Mar. 28, 2012), available at

http://www.ftc.gov/os/caselist/1023060; U.S. v. Brian Ebersole, No. 3:12-cv-00105 (D. Nev. 

Feb. 29, 2012), available at http://ftc.gov/os/caselist/0923174; U.S. v. Sonkei Commc’ns, No. 

SACV11-1777 (C.D. Cal. Nov. 22, 2011), available at http://ftc.gov/os/caselist/1123060; U.S. v. 

Voice-Mail Broad. Corp., No. cv-08-00521 (C.D. Cal. Jan. 29, 2008), available at

http://www.ftc.gov/os/caselist/0523182; U.S. v. The Broadcast Team, Inc., No. 6:05-cv-01920 

(M.D. Fla. Feb. 2, 2007), available at http://www.ftc.gov/os/caselist/0523025/0523025.shtm. 
9 

calls on behalf of unscrupulous telemarketers. These robocalls pitched worthless extended auto 

warranties and credit card interest rate reduction programs while using spoofed Caller ID names 

– such as “SALES DEPT” – and phone numbers registered to companies with overseas offices in 

the Northern Mariana Islands, Hong Kong, and the Netherlands. In 2012, the Commission 

reached a settlement under which the defendants are banned from all telemarketing, from 

misrepresenting any good or service, and from selling or otherwise benefitting from customers’ 

personal information. The order imposed a $5.3 million judgment that was suspended, based on 

the defendants’ inability to pay, after they had surrendered assets valued at approximately $3 

million.28

Second, the FTC has increasingly taken action against payment processors when they 

assist and facilitate telemarketers engaged in deceptive practices, providing access to the 

financial system and, in turn, consumers’ money.29 Two amended complaints the FTC filed in 

June provide examples of the agency’s enforcement in this area. In both cases, the Commission 

sued telemarketing operations allegedly peddling bogus credit card interest rate reduction 

services. After obtaining temporary restraining orders against the defendants and beginning 

discovery, the FTC moved to amend both complaints to include the defendants’ payment 

processors. The Commission alleges that the payment processors knew, or consciously avoided 

 28 FTC v. Asia Pac. Telecom, Inc., No. 1:10-3168 (N.D. Ill. Mar. 28, 2012), 

available at http://www.ftc.gov/os/caselist/1023060. The full judgment will become due 

immediately if the defendants are found to have misrepresented their financial condition. 

29 See, e.g., FTC v. Automated Elec. Checking, Inc., No. 3:13-cv-00056 (D. Nev. 

Mar. 13, 2013), available at http://ftc.gov/os/caselist/1223102; FTC v. Landmark Clearing, Inc., 

No. 4:11-cv-00826 (E.D. Tex. June 27, 2013), available at

http://www.ftc.gov/os/caselist/1123117. 
10 

knowing, key facts about the illegal telemarketing,30 and chose to continue profiting from the 

illegal activity by processing consumers’ payments to the original defendants.31

 In sum, the Commission seeks to identify and attack chokepoints for illegal 

telemarketing. 

II. Policy and Market Stimulation Initiatives 

Despite the 2008 prohibition of unauthorized robocalls and the Commission’s vigorous 

enforcement efforts, technological advances have permitted law-breakers to continue to profit 

from illegal robocall campaigns. In the fourth quarter of 2009, the FTC received about 63,000 

complaints about illegal robocalls each month.32 That number ballooned in three years, to an 

average of approximately 200,000 complaints per month in the fourth quarter of 2012.33 

 30 16 C.F.R. Part 310.3(b). 

31 FTC v. Innovative Wealth Builders, Inc., No. 13-cv-00123 (M.D. Fla. June 5, 

2013), available at http://www.ftc.gov/os/caselist/1223127; FTC v. WV Universal Mgmt., LLC, 

No. 6:12-CV-1618 (M.D. Fla. June 21, 2013), available at

http://www.ftc.gov/os/caselist/1223190. 

32 National Do Not Call Registry Data Book FY 2010 at 5 (Nov. 2010), available at

http://www.ftc.gov/os/2010/12/101206dncdatabook.pdf. Since that time, the FTC began 

separately tracking Do Not Call complaints and robocall complaints based on information 

provided by the consumer. 

33 National Do Not Call Registry Data Book FY 2012 at 5 (Oct. 2012), available at

http://www.ftc.gov/os/2012/10/1210dnc-databook.pdf. 
Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr 

09 09 10 10 10 10 10 10 11 11 11 11 11 11 12 12 12 12 12 12 13 13 

Number ofrobocall compl.aintsfiled with the FTC each month34 

The public's anger has increased with the number of illegal robocalls.35 Robocalls propagate 

hannful frauds; indeed, the estimated consumer hrum associated with the 22 FTC lawsuits 

against robocallers that have concluded thus far amounts to more than $202 million.

36 Illegal 

34 While this chrui suggests recent positive u·ending of self-reported complaints, it 

has in no way diminished the Commission's law enforcement eff01is. 

35 See generally FTC Workshop, Robocalls: All the Rage (Oct. 18, 2012). A 

webcast of the workshop, a u·anscript of the event, PowerPoint presentations, and other related 

materials are available at http://www.ftc.gov/bcp/workshopslrobocalls. References to the 

workshop u·anscript ("Tr.") identify the speaker and the u·anscript page. See, e.g., Zoeller, Tr. at 

86-87; Bash, Tr. at 88-89; Maxson, Tr. at 89-90. 

36 This estimate is based on the FTC's equitable monetruy relief awru·ds, and 

excludes civil penalties ordered in the same cases. In addition, it only includes cases that 

involved robocalls. The estimated consumer hrum associated with the FTC's 81 concluded Do 

Not Call actions ammmts to more than $741 million. 

11 
12 

robocalls also have a significant impact on quality of life by repeatedly invading the privacy and 

peace of consumers’ homes.37

A. Coordinating with Technical Experts, Industry, and Other Stakeholders 

Convinced that law enforcement alone is not enough to solve the problem, FTC Staff has 

aggressively sought new strategies in ongoing discussions with academic experts, 

telecommunications carriers, industry coordinating bodies, technology and security companies, 

consumers, and counterparts at federal, state, and international government bodies. To that end, 

on October 18, 2012, the Commission hosted a public summit on robocalls to explore these 

issues (the “Robocall Summit”).38

The Robocall Summit made clear that convergence between the legacy telephone system 

and the Internet has given rise to massive, unlawful robocall campaigns. The telephone network 

has its origins in a manual switchboard that allowed a human operator to make connections 

between two known entities.39 A small group of well-known carriers were in control and were 

highly regulated.40 Placing calls took significant time and money, and callers could not easily 

conceal their identities.41 

Now, communications technology is universal and standardized such that entrepreneurs 

 37 See, e.g., Maxson, Tr. at 90-92; Zoeller, Tr. at 86-88; see also FTC, Robocall 

Challenge Comments [hereinafter Public Comment], available at 

http://www.ftc.gov/os/comments/robocallchallenge; Michelle Block, Public Comment, cmt. 

#565017-00015, at 1 (explaining how robocalls can cause her to lose desired assignments as a 

substitute teacher). 

38 See generally FTC Workshop, Robocalls: All the Rage (Oct. 18, 2012), 

http://www.ftc.gov/bcp/workshops/robocalls. 

39 Bellovin, Tr. at 12. 

40 Schulzrinne, Tr. at 22; Rupy, Tr. at 46-47; Diggs, Tr. at 55. 

41 Bellovin, Tr. at 12-17. 
13 

can build up a viable telephone services business wherever they find an Internet connection.42 

As a result, the number of service providers has grown exponentially and now includes 

thousands of small companies all over the world.43 In addition, VoIP technology allows 

consumers to enjoy high-quality phone calls with people on the other side of the planet for an 

affordable price.44 With this efficiency came other changes: instead of a voice path between one 

wire pair, the call travels as data; identifying information can be spoofed; many different players 

are involved in the path of a single call; and the distance between the endpoints is not 

particularly important.45 As a result, it is not only much cheaper to blast out robocalls; it is also 

easier to hide one’s identity when doing so. 

1. New Technologies Have Made Robocalls Extremely Inexpensive 

Until recently, telemarketing required significant capital investment in specialized 

hardware and labor.46 Now, robocallers benefit from automated dialing technology, inexpensive 

long distance calling rates, and the ability to move internationally and employ cheap labor.47 

The only necessary equipment is a computer connected to the Internet.48 The result is that lawbreaking telemarketers can place robocalls for less than one cent per minute.49 In addition, the 

 42 Herrman, Tr. at 60-61; Maxson, Tr. at 96. 

43 Schulzrinne, Tr. at 22. 

44 See, e.g., Bellovin, Tr. at 16-17. 

45 Id. at 17. 

46 Herrmann, Tr. at 58-59; Schulzrinne, Tr. at 24. 

47 Schulzrinne, Tr. at 24. 

48 Herrmann, Tr. at 59-61. 

49 See Dan Weber, Alan Basinger, Dean Willis, and David Schwartz, Public 

Comment, cmt #565017-00014, at 3. 
14 

cheap, widely available technology has resulted in a proliferation of entities available to perform 

any portion of the telemarketing process, including generating leads, placing automated calls, 

gathering consumers’ personal information, selling the products, or doing all of the above.50 

Because of the dramatic decrease in upfront capital investment and overall cost, robocallers – 

like email spammers – can make a profit even if their success rate is very low.51 

Technology enables a cheap and scalable model for robocalls. 

2. New Technologies Have Made It Easier for Robocallers to Hide 

Technological changes have also affected the marketplace by enabling telemarketers to 

conceal their identities when they place calls. First, direct connections do not exist between 

every pair of carriers, so intermediate carriers are necessary to connect the majority of calls. 

Thus, the typical call now takes a complex path, traversing the networks of multiple different 

VoIP and legacy carriers before reaching the end user.52 Each of these carriers knows which 

carrier passed a particular phone call onto its network, but likely knows little else about the 

 50 Schulzrinne, Tr. at 20-21; Maxson, Tr. at 95-98. 

51 Schulzrinne, Tr. at 21; Bellovin, Tr. at 16-17. 

52 Panagia, Tr. at 130-32; Bellovin, Tr. at 17. 
15 

origin of the call.53 Such a path makes it cumbersome to trace back to a call’s inception.54 All 

too often, this process to trace the call fails completely because one of the carriers in the chain 

has not retained the records that would further an investigation.55 

Second, new technologies allow callers to manipulate the caller ID information that 

appears with an incoming phone call.56 This “caller ID spoofing” has beneficial uses; legitimate 

companies adjust their caller ID information regularly so that customers will see the most useful 

corporate number or name, rather than the phone number from which an agent actually placed 

the call.57 However, the same functionality allows robocallers to deceive consumers by 

pretending to be an entity with a local phone number or a trusted institution such as a bank or 

government agency.58 In addition, robocallers can change their phone numbers frequently in an 

attempt to avoid detection.59 It is generally illegal to transmit misleading or inaccurate caller 

identification information with the intent to defraud, cause harm, or wrongfully obtain anything 

of value, but many robocallers flagrantly violate this law.60

 53 Panagia, Tr. at. 132; Maxson, Tr. at 100. 

54 Schulzrinne, Tr. at 24-25; Maxson, Tr. at 100; Bash, Tr. at 104. 

55 Panagia, Tr. at 160-61; see also id. at 132-133; Schulzrinne, Tr. at 21. 

56 Schulzrinne, Tr. at 24-26. 

57 See, e.g., Panagia, Tr. at 129. 

58 Schulzrinne, Tr. at 21-22. 

59 Id. at 24-26; Maxson, Tr. at 97; Bash, Tr. at 103. 

60 See Truth in Caller ID Act, 47 U.S.C.§ 227(e); cf. 16 C.F.R. Part 310.4(a)(8) (the 

Telemarketing Sales Rule requires that sellers and telemarketers transmit or cause to be 

transmitted the telephone number and, when made available by the telemarketer’s carrier, the 

name of the telemarketer, to any caller identification service in use by a recipient of a 

telemarketing call, or transmit the customer service number of the seller on whose behalf the call 
16 

Finally, new technologies help robocallers operate outside the jurisdiction where they are 

most likely to face prosecution.61 Indeed, all of the many different entities involved in the path 

of a robocall can be located in different countries, making investigations even more challenging. 

The path of a robocall can span the entire globe.

B. Need to Stimulate Technological Solutions 

 

The Commission recognized the need to spur the marketplace into developing technical 

solutions that could help American consumers block illegal robocalls. Thus, at the conclusion of 

the Robocall Summit, the FTC announced its first public contest, a “Robocall Challenge” hosted 

on the challenge.gov platform, with a $50,000 prize for the individual or small team that could 

propose a technological solution to help consumers block robocalls on their landlines and mobile 

 

is made and, when made available by the telemarketer’s seller, the name of the seller. Under this 

provision, it is not necessary to prove intent to defraud.). 

61 Schulzrinne, Tr. at 21; Bellovin, Tr. at 16-17. 
17 

phones. The Commission also offered a separate award for the best solution by an organization 

with ten or more employees, which did not have a cash prize.62

The FTC received an astounding 798 eligible submissions, many of which were 

extremely well-considered technical proposals that moved the ball forward. As a result of the 

Robocall Challenge, a wide array of people with the necessary technical expertise spent 

countless hours thinking about these issues. All of the winning proposals were submitted by 

people who had never previously worked on the specific problem of illegal robocalls. In 

addition, the Robocall Challenge received an overwhelming amount of public attention and 

interest, helping the FTC spread the word about illegal robocalls and what consumers can do to 

fight them. 

The primary goal of the Robocall Challenge was encouraging development of realistic 

ideas for decreasing the prevalence of telemarketing robocalls in a way that the FTC’s traditional 

law enforcement efforts could not achieve alone. On April 2, 2013, the agency announced three 

winning solutions, which all contained promising ideas about how to address difficult realities 

such as the limitations of the telecommunications infrastructure and the prevalence of caller ID 

spoofing.63 As the winning contestants and others further develop their ideas for introduction 

into the marketplace, we expect positive results for American consumers. 

 62 The judges for the Challenge were FTC Chief Technologist Steve Bellovin, FCC 

Chief Technology Officer Henning Schulzrinne, and co-Executive Editor of All Things Digital

Kara Swisher. The basic judging criteria were: Does it work? (50%); Is it easy to use? (25%); 

and Can it be rolled out? (25%). For details, see FTC Robocall Challenge Criteria Details, 

http://www.robocall.challenge.gov/details/criteria. 

63 See Press Release, FTC Announces Robocall Challenge Winners; Proposals 

Would Use Call Filter Software to Reduce Illegal Calls (Apr. 2, 2013), available at 

http://www.ftc.gov/opa/2013/04/robocall.shtm; Appendix B, Summary of Winning Robocall 

Challenge Submissions. 
18 

III. Consumer Education 

Public education is an equally essential tool in the FTC’s consumer protection and fraud 

prevention work. The Commission’s education and outreach program reaches tens of millions of 

people a year through our website, the media, and partner organizations that disseminate 

consumer information on the agency’s behalf. 

The FTC delivers actionable, practical, plain language information on dozens of issues. 

Indeed, the Commission uses law enforcement announcements as opportunities to remind 

consumers how to recognize a similar situation and report it to the FTC. In the case of robocalls, 

whether the offer involves fraudulent credit card services, so-called auto warranty protection 

plans, or bogus vacation travel packages, the FTC’s message to consumers is simple: If you 

answer a call and hear a recorded sales message – and you haven’t given your written permission 

to get calls from the company on the other end – hang up. Period. Other key self-help messages 

to consumers include how to place a phone number on the Do Not Call Registry, what to 

consider before asking a phone carrier to block calls, and how and where to report illegal 

robocalls. The FTC’s education materials also explain how robocallers use technology to make 

thousands of calls at minimal cost, send fake caller ID information, and conceal their locations. 

The FTC disseminates these tips through articles,64 blog posts,65 social media,66 infographics,67

videos68 and audio.69

 64 See, e.g., FTC Robocall Microsite, http://www.consumer.ftc.gov/features/feature0025-robocalls. 

65 See, e.g., FTC Consumer Information Blog, http://www.consumer.ftc.gov/blog. 

66 See, e.g., FTC Robocalls Facebook Q&A Transcript (July 17, 2012), 

http://www.ftc.gov/opa/socialmedia/facebookchats/1207ftcrobocallsfb.pdf. 
19 

The FTC updates its consumer education whenever it has new information to share. The 

Commission’s library of articles on robocall scams in English and Spanish also includes pieces 

specifically describing credit card interest rate reduction scams, auto service contract and 

warranty fraud, and travel-related schemes.70 When Robocall Challenge participants submitted 

to the Commission techniques they were using to successfully reduce illegal robocalls, the GSA 

and FTC used these tips in a video that relays some of the best consumer suggestions about what 

works today to fight robocalls.71

 The Robocall Challenge expanded the reach of the Commission’s consumer education 

messages about robocalls by spurring tremendous media interest. The announcement of the 

Challenge in October 2012 prompted a nationwide flurry of articles and television stories.72 

 67 See, e.g., FTC Robocalls Infographic,

http://www.ftc.gov/bcp/edu/microsites/robocalls/infographic.shtm.

68 See, e.g., FTC Video and Media, http://www.consumer.ftc.gov/media. 

69 See, e.g., FTC Consumer Information Audio, “Hang Up on Robocalls,”

http://www.consumer.ftc.gov/media/audio-0045-hang-robocalls. 

70 See FTC Consumer Information, “Travel Tips” (May 2013), 

http://www.consumer.ftc.gov/articles/0046-travel-tips; FTC Consumer Information, “Auto 

Service Contracts and Warranties” (Aug. 2012), http://www.consumer.ftc.gov/articles/0054-

auto-service-contracts-and-warranties; FTC Consumer Information, “Credit Card Interest Rate 

Reduction Scams” (Feb. 2011), http://www.consumer.ftc.gov/articles/0131-credit-card-interestrate-reduction-scams; see generally FTC Robocall Microsite,

http://www.consumer.ftc.gov/features/feature-0025-robocalls; FTC Robocall Microsite in 

Spanish, “Llamadas automáticas pregrabadas o robocalls,” 

http://www.consumidor.ftc.gov/destacado/destacado-s0025-llamadas-automaticas-pre-grabadaso-robocalls.

71 Robocall Challenge: Consumer Tips & Tricks (Apr. 2, 2013), 

http://www.consumer.ftc.gov/media/video-0086-robocall-challenge-consumer-tips-tricks. 

72 See, e.g., Craig Timberg, Find a way to block “robo-calls” and win $50K from 

the FTC, WASH. POST, Oct. 18, 2012, available at

http://www.washingtonpost.com/business/economy/find-a-way-to-block-robocalls-and-win-50kfrom-the-ftc/2012/10/18/a2d648c6-1943-11e2-aa6f-3b636fecb829_story.html; Trevor Mogg, 
20 

When the agency announced the winners in April 2013, it again made headlines in national news 

outlets and technology publications, also reaching a television audience of an estimated 2.2 

million viewers in the first 24 hours following the announcement.73 Stories explained the 

problem of illegal robocalls and the FTC’s determination to block them from landlines and 

mobile phones nationwide.

IV. Next Steps and Conclusion 

The 10-year old Do Not Call Registry remains enormously successful in protecting 

consumers against unsolicited calls from legitimate telemarketers. But as technology changes 

and fraudsters exploit those changes, we must remain agile and creative. The Commission will 

continue its multifaceted efforts to fight illegal robocalls, including but not limited to the 

following actions: 

 Continue Aggressive Law Enforcement 

o We will maintain our enforcement efforts, in coordination with state, federal, and 

international partners, to target high-volume offenders and pursue robocall 

gatekeepers in order to stop the largest number of illegal calls. 

o We will work with the telecommunications industry, encouraging carriers to be 

proactive in monitoring for illegal robocalls and securing the information 

necessary for prosecutions. 

 

Wanna be a national hero? FTC contest offers $50,000 prize for solution to end annoying 

robocalls, DIGITAL TRENDS, Aug. 18, 2012, available at http://www.digitaltrends.com/cooltech/ftc-contest-offers-50000-prize-for-solution-to-end-annoying-robocalls; NBC Bay Area, FTC 

Holding Anti-Robo Call Contest, Oct. 20, 2012, available at

http://www.nbcbayarea.com/news/local/FTC-Holding-Anti-Robo-Call-Contest-175078991.html. 

73 See, e.g., Edward Wyatt, 2 Deterrents to Robocalls Win Contest by FTC, N.Y.

TIMES, Apr. 2, 2013, available at http://www.nytimes.com/2013/04/03/technology/twodeterrents-to-robocalls-win-ftc-contest.html; Jon Brodkin, No more robocalls: New tech 

automatically hangs up on robots, ARS TECHNICA, Apr. 2, 2013, available at

http://arstechnica.com/information-technology/2013/04/no-more-robocalls-new-techautomatically-hangs-up-on-robots; Cristin Dorgelo, “Innovative Solutions to Fight Illegal 

Robocalls,” Apr. 17, 2013, http://www.whitehouse.gov/blog/2013/04/17/innovative-solutionsfight-illegal-robocalls. 
21 

 Spur Innovation 

o We will work with industry leaders and other experts to further stimulate the 

development of technological solutions to block illegal robocalls. 

o We will continue to encourage industry-wide coordination to create and deploy 

VoIP standards that incorporate robust authentication capabilities.74 Such 

coordination is the only way to ensure a future phone system with accurate and 

truthful calling information. 

 Engage in Ongoing Consumer Education 

o We will continue our broad outreach to consumers regarding the Do Not Call 

Registry as well as illegal robocalls and how best to fight them. 

 Work with Congress 

o We stand ready to assist in your efforts to protect consumers. 

Thank you for the opportunity to share some of the highlights regarding the FTC’s battle against 

illegal robocalls. We look forward to working with you on this important issue. 

 74 This process will require active planning and cooperation in the coming months 

and years, as we move away from the legacy telecommunications infrastructure and toward a 

VoIP-based system. Experts around the world, including those involved in the Internet 

Engineering Task Force (“IETF”), have already begun to explore the technical changes 

necessary to permit authentication of VoIP calls. In fact, the IETF is in the process of creating a 

working group about this very topic called “STIR” – Secure Telephone Identity Revisited. 

Participants in the FTC Robocall Summit also mentioned the Alliance for Telecommunications 

Industry Solutions as the type of standard-setting group that might assist in organizing the 

necessary collaboration. Schulzrinne, Tr. at 167; see also Rupy, Tr. at 51, 67; Diggs, Tr. at 68-

69; Whitt, Tr. at 208-09; see generally Paula Bailey-Stine, Public Comment, cmt #565017-

00022, at 3-5. 
Appendix A 

National Do Not Call Registry Active Registrations and Complaint Figures 

 
220 

200 

140 

g 120 

~ 100 

80 

60 

40 

20 

2003 2004 

National Do Not Call Registry 

Active Registration and Complaint Figures 

2005 2006 2007 2008 2009 2010 2011 

Calendar Year 

219,298,509 221,827,513 

NATION AL 

DO NOT CALL 

REGIS TRY 

No. of Active 

Registrations 

Complaints 

Received Each 

Calendar Year 

2012 Jan.-May 2013 
Appendix B 

Summary of Winning Robocall Challenge Submissions 
1 

FTC Robocall Challenge Winners 

April 2, 2013 

BEST OVERALL SOLUTION AWARD (Tie, winners receive $25,000 each): 

Serdar Danis 

Serdar Danis is a computer engineer who, in his free time, enjoys entering crowd-sourced technology 

contests such as patent research contests through Article One Partners and innovation contests through 

InnoCentive. This was his first time entering a contest through ChallengePost. Mr. Danis has several 

patent applications pending pertaining to this solution and also other inventions. You can direct inquiries 

about his solution to robocallchallengewinner@gmail.com. 

For his solution, Robocall Filtering System and Device with Autonomous Blacklisting, Whitelisting, 

GrayListing and Caller ID Spoof Detection 

This solution involves a software application that can authenticate caller ID information as either 

authentic or spoofed, and display this information to the customer. It can be implemented through a 

customer-installed software application on smartphones and certain telephone systems, through updates 

to smartphone operating systems or carriers’ software, or through a hardware device at the customer 

premises. In addition to authenticating caller ID information, the system depends on white and black 

lists that can be populated manually or autonomously and then aggregated into global white and black 

lists. Calls with authentic caller IDs on private or global white lists can be put through to the customer 

and calls from spoofed caller IDs or authentic callers IDs on the private or global black lists can be 

dropped. Any number not on a white or black list, or not authenticated, can be handled based on 

customer preferences, such as forwarded to voice mail or subjected to human verification without ringing 

the customer phone. Human verification would rely on continuously changing pre-recorded questions 

presented to the caller, which would be difficult for a computer to answer. The solution stops those who 

abuse the telephone system without inconveniencing regular callers. 

Aaron Foss 

Aaron Foss is a freelance software developer based in Long Island, New York. He went through the 

TechStars NYC program (Summer 2011) and is co-founder and lead developer of SmartChemo. You can 

direct inquiries about his solution to aaron@nomorobo.com or 631-406-9283. 

For his solution, Nomorobo 

Nomorobo uses an existing feature of the current phone system along with the power of cloud computing 

to fight back against illegal robocallers. By using simultaneous ringing – which is widely available 

through most phone carriers - the call is split and routed to the Nomorobo server as well as the user’s 

phone. Instantly, Nomorobo analyzes the call and determines the threat level by using machine learning 

to identify and adapt to new robocallers based on their calling patterns. Nomorobo inspects the CallerID 

header, analyzes the frequency of every call, and compares this data to its real-time black and white lists. 

Potential robocallers are presented with an audio CAPTCHA for final verification while legal robocallers 

have their phone numbers whitelisted to guarantee message delivery. If it’s an unknown robocall, 

Nomorobo answers and immediately hangs up. If no threat is detected, Nomorobo does nothing and the 

call goes through like normal. All of this happens instantly, before the consumer’s phone begins to ring. 

Nomorobo works with any kind of phone, no additional hardware is necessary, and no infrastructure 

changes are required by phone companies. 
2 

TECHNOLOGY ACHIEVEMENT AWARD (Non-monetary): 

Daniel Klein and Dean Jackson, from Google 

Mr. Klein and Mr. Jackson are engineers based out of the Google office in Pittsburgh, Pennsylvania. You 

can direct inquiries about their solution to Google’s press office. 

For their solution, Crowd-Sourced Call Identification and Suppression 

Google’s robocall concept could give consumers the power to block robocalls -- and to allow that 

information to be used to shield all consumers from robocallers even before their phones ring. The 

concept could work across all phone platforms as deployed via a smartphone app, changes to VoIP 

telephone software, or hardware devices. In each case, consumers could easily indicate whether an 

unknown number should be blocked in the future, which could then be communicated to a centralized 

database. After a number of people marked a caller as needing to be blocked, that caller could be blocked 

for everyone else that chose to use the system. The system would include a specialized mechanism to 

combat CallerID spoofing. In addition, before adding a number to the centralized database, many factors 

could be considered such as call volume, frequency, and inbound/outbound ratio. These factors could be 

computed dynamically, adjusting the behavior of the system to match current calling patterns. Also, the 

system could use a whitelist to keep some numbers out of the database. By using aggregated data about 

the incoming phone numbers in this manner, this concept could quickly identify and block robocallers 

and the fraudsters that use these automated calls to swindle consumers.