Thousands of telephone lines sit on a Federal Trade Commission “honeypot” computer, answering and trapping incoming calls, and capturing caller IDs and voice recordings.
Many of the telephone numbers used in this technological trap were abandoned by consumers because they were flooded by illegal telemarketing calls.
But, to the FTC, the unwanted numbers are just the bait needed to lure in the scammers.
The trap for robocallers — autodialed marketing calls sometimes set up just to steal money — feeds an ever-growing database and is one of the FTC’s technological weapons against the millions and millions of unwanted calls made to landlines and cellphones every month.
Last year, the FTC each month averaged more than 445,000 Do Not Call (DNC) list complaints from consumers, with about two-thirds related to robocalls. Most of the scammers are in the U.S., but many are in countries like India, China and Nigeria, and beyond the reach of U.S. authorities.
While the random call with the unrecognized number and area code might be a nuisance, the goal of the scammers isn’t to be annoying — it’s often to get a credit card number and steal money. In some cases, the robocall company is building a list of potential sales leads for companies selling products ranging from home alarm systems to cruise line tickets.
The FTC last week announced a settlement with Justin Ramsey, whom the agency called “the ringleader of telemarketing operations that blasted illegal robocalls to consumers and called phone numbers listed on the National Do Not Call Registry.”
Ramsey and his company — one of many he ran targeted by the FTC — agreed to a $2.2 million penalty. However, the actual payment would be $65,000 based on the financial condition of his company.
A U.S. District Court filing in January by the FTC against Ramsey and a list of companies illustrated the scope of such operations. In April and May last year, Ramsey and his company made over 3.5 million telephone calls selling home security systems, home solar energy equipment and other goods and services, according to the complaint.
“Nearly a quarter of those calls, 837,989, were to telephone numbers that had been listed on the (Do Not Call) Registry,” the complaint noted.
Ramsey and his associates operated out of a two-story office building in Boynton Beach, Florida. Several state attorneys general have gone after Ramsey and the companies, including the Mississippi Attorney General’s office, which got both injunctive relief and a monetary judgment of $420,000 based on 84 violations, according to the FTC complaint.
“Ramsey admits that, when he received a document from the Mississippi Attorney General’s office, he threw it in the trash and did not read it,” the complaint states.
Companies like Ramsey’s blast out calls to a list of telephone numbers without regard for the FTC’s Do Not Call Registry. As Ramsey wrote in an email to a business associate in June 2015, according to the complaint: “i [sic] HATE THE DNC ABSOLUTELY F***ING HATE IT.”
Many consumers getting unwanted calls on their cell or home phones may wonder why, if their number is one of the 226 million registered on the Do Not Call list.
‘Can you hear me?’
But the list doesn’t prevent the robocallers from calling a large database of telephone numbers. An attempt to block one of the numbers on a cellphone will stop the number, but many robocallers “spoof” by using fake numbers they make up. They can change the number every hour, if they want, according to the FTC.
If a robocaller were flooding phones in the 607 area code, for example, with telemarketing calls, the robocaller could make it appear the call is coming from a number in the 607 area code. That might be enough to get the consumer to answer the call, which is when the problems begin.
Some recorded robocalls ask “Can you hear me?” Simply answering “yes” will put your telephone number on a list of active numbers to be called. Some calls ask you to push 1 for more information on, say, home alarm systems. The result could be a real person on the other end — either trying to make a sale or simply attempting to extract your credit card information for fake charges.
“Our complaint numbers have been increasing over the last year,” Will Maxson, the FTC’s assistant director of the division of marketing practices, said in an interview.
Consumer complaints usually fall into two buckets.
One is the legitimate business running afoul of the Do Not Call registry by calling a registered number. To avoid this, careful telemarketers will run their database of phone numbers against the registry every month to eliminate the possibility of calling a registered number. The maximum penalty for each violation is $40,000.
The other bucket is the robocaller, which has no regard for the list and is sending out millions of calls every day. Often the goal isn’t to sell a product, but to get a consumer’s credit card number for fraudulent charges. This is a low-cost business, with each call amounting to a penny, according to the FTC.
In the fiscal year that ended last September, the FTC received 362,000 Do Not Call complaints, more than 30,000 per month, from consumers in New York State. Nearly 14,000 came from those in the 607 area code in southern and central New York, and nearly 26,000 from the 585 area code in the Rochester area, according to the FTC.
“Even the FTC admits the DNC list does not work anymore,” said Aaron Foss, founder of Nomorobo, a telephone app for landlines and cellphones that screens and blocks robocalls. Foss’ company, based on Long Island, won an FTC challenge in 2013 for technological solutions to robocallers. The FTC got about 800 entries.
Nomorobo, offered by some phone companies, is free to consumers for Internet landlines, such as those from cable television companies. Cell users pay $1.99 a month for the protection. Foss said he has about 972,000 users and is growing.
“Most people think they’re just annoying,” Foss said of robocalls. But they’re a threat, trying to extract money from you, he added.
Robocaller hour: 6:30 PM
Foss said older consumers as a group tend to answer all phone calls while younger consumers will look at an unrecognized number and not pick up.
One scam was aimed at older consumers, telling them “your doctor has approved you” for a special back brace. The telemarketer says they just need the consumer’s credit card for the shipping cost. Another ongoing telemarketing scam is a call supposedly from the Internal Revenue Service demanding payment — but the IRS makes contact through the mail first, and doesn’t demand credit card information.
Some cell carriers have programs to stop robocalls from reaching their networks. AT&T last week announced it had blocked its billionth robocall, noting in recent weeks the program has been averaging 12 million blocked calls each weekday.
At Nomorobo, Foss said he’s found the peak in calls tends to be around 6:30 p.m. Eastern Time and continues into the evening.
Despite the enforcement actions by federal and state agencies and technological solutions, the scammers continue to make money.
“That’s the reason it’s not stopping,” Foss said.