The Federal Communications Commission (FCC or Commission) finalized its proposed $120 million fine against a “neighborhood spoofer” the agency said made more than 96 million calls to sell timeshares and other vacation packages.
Last summer, the FCC proposed a fine in the case of Adrian Abramovich, accusing him of violating the Truth in Caller ID Act, the federal wire fraud statute and the Telephone Consumer Protection Act (TCPA) when the companies under his control imitated the area code of call recipients to trick them into answering the phone, thinking it was a local call.
Those who answered heard automated messages from callers that falsely claimed to be affiliated with well-known travel and hospitality companies (such as Marriott and TripAdvisor), offering vacations and cruises to destinations such as Mexico and the Caribbean. But Abramovich had no relationship with the companies referenced in the messages, the FCC said, and when callers were routed to live operators, they were sold vacation packages and timeshares.
After being tipped off by TripAdvisor about the calls, the FCC launched an investigation, subpoenaing call records for a three-month period from Oct. 1, 2016, to Dec. 31, 2016. During that time, Abramovich’s business made 96,758,223 calls, averaging over 1 million calls per day. The FCC sampled 1,000 calls from the records for each day of the time period (for a total sample of 80,000 calls) and found that every reviewed call was spoofed in order to match the area code and central office code of the called number.
Based on this evidence—what the FCC said was one of the largest spoofed robocall campaigns it has ever investigated—the agency issued its first forfeiture under the Truth in Caller ID Act based on spoofing.
To calculate an appropriate dollar amount for the proposed forfeiture, the FCC weighed a case of first impression with the egregiousness of the harm to serve as both a punishment and a deterrent to future wrongdoing, proposing a base forfeiture in the amount of $1,000 per unlawful spoofed call for each of the 80,000 calls the agency specifically examined.
However, the case merited “a significant upward adjustment,” given the sheer volume of the calls and the direct harms to consumers, the FCC said, adding another $40 million for a proposed forfeiture of $120 million.
Abramovich objected, denying an intent to defraud, cause harm or wrongfully obtain anything of value. He also requested a “significant reduction” in the proposed forfeiture, arguing that its unprecedented size violated his due process rights. Abramovich did not deny liability for any of the apparent violations.
His effort was unable to sway the Commission.
Direct evidence of specific wrongful intent is rarely available, so the FCC looked to Abramovich’s actions to determine whether there was an intent to defraud or cause harm. “In the particular circumstances presented in this case, specific intent can be inferred by, among other things, Abramovich’s reckless disregard of the fact that his actions would inexorably defraud and cause considerable harms to consumers, the affected travel companies, and carriers alike,” the FCC wrote.
“Barraging” consumers with unsolicited marketing calls demonstrates an intent to harm, as did the attempt to trade on the reputations of companies such as TripAdvisor and Marriott, as well as using the telephone system with false pretenses. Abramovich also failed to refute evidence and findings of fraud and harm, the agency said.
“Based on these facts, we find Abramovich’s actions were so likely to defraud and cause harm and, in fact, did defraud and case harm, that we can conclude that he had the requisite intent to defraud, cause harm or obtain anything of value in violation of the Caller ID Act,” according to the order.
With the factual findings affirmed, the Commission turned to the constitutionality of the forfeiture amount. Rejecting Abramovich’s argument that the $120 million order violated his due process rights, the FCC said it was not arbitrary or capricious and has a real and substantial relation to the objective of the regulatory scheme.
The forfeiture falls far below the statutory limits, the FCC noted, with the $1,000 per violation at the lowest base forfeiture amount and reliance on the statutory factors for the upward adjustment based on the egregiousness of the violations (the massive volume of calls, the culpability of Abramovich and prior noncompliance with the Communications Act).
“And the forfeiture is assessed only for a small subset of the total number of violations for which Abramovich was responsible,” the FCC added. “The fact that even a greatly reduced per-violation forfeiture amounts to $120 million is a problem wholly of Abramovich’s own making. Abramovich elected to engage in massive spoofing and committed more than 96 million separate violations. The volume of his violations does not justify a ‘volume discount.’”
The FCC found no merit in Abramovich’s argument that his constitutional rights were violated because he lacked “knowledge or warning” about the potential size of a forfeiture order. “To the extent that Abramovich is suggesting that he should get a free pass under the Constitution because he is the first person whom the Commission has proposed to impose a forfeiture for perpetrating a massive unlawful spoofing campaign, that argument is without merit,” the FCC wrote.
Finally, reiterating the “extent and gravity” of the violations, the FCC refused to grant a reduction of the proposed forfeiture.
“Abramovich knowingly and intentionally spoofed the originating telephone numbers to encourage consumers to answer the phone, and he knowingly and intentionally misrepresented that the calls were coming from specific companies with which Abramovich had no affiliation or authority to represent,” according to the order. “And he did so on a massive scale, making hundreds of thousands of spoofed calls a day during the time frame at issue. His actions were egregious, and demonstrate a blatant disregard for the law and for the expectations of trusting consumers.”
To read the forfeiture order in In the Matter of Abramovich, click here.
Why it matters: With spoofing claims and scrutiny on the rise, the record-setting forfeiture order—the largest ever imposed by the FCC—puts callers on notice about the potential cost of violating the law. “Tough enforcement is a key part of the FCC’s robust strategy for combatting illegal robocalls, and this Forfeiture Order represents a big step forward in our enforcement efforts,” FCC Chair Ajit Pai wrote in his statement filed with the order. “Our decision sends a loud and clear message: this FCC is an active cop on the beat and will throw the book at anyone who violates our spoofing and robocall rules and harms consumers.”