US fines XCast $10M over illegal robocalling

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XCast, a Voice over Internet Protocol (VoIP) service provider, agreed that the company violated regulation by assisting illegal telemarketing campaigns.

Robocalling has been plaguing users for years, with every fifth unknown call in the US labeled as spam. According to the US authorities, XCast was among the companies that facilitated billions of such illegal calls.

“XCast has agreed to a court order resolving allegations that it violated the Telemarketing Sales Rule (TSR) by assisting and facilitating illegal telemarketing campaigns,” a statement from the US Department of Justice (DoJ) said.

A complaint filed earlier in May 2023 alleged that XCast transmitted illegal robocalls to US consumers, including scam calls claiming to be from US government agencies.

“Many of the calls failed to truthfully identify the seller of the services being marketed, falsely claimed affiliations with government entities, contained other false or misleading statements to induce purchases, or were transmitted with “spoofed” caller ID information,” the DoJ said.

According to authorities, XCall knew the company was facilitating illegal activity after the company was alerted that the calls coming through were unlawful. Samuel Levine, director of the US Federal Trade Commission’s Bureau of Consumer Protection, said the VoIP provider was warned several times and chose not to take any action.

A court order by the US District Court for the Central District of California also imposed a $10 million civil penalty judgment on XCast. However, for the time being, the fine is suspended as the company is unable to pay the amount.

Robocalling allows scammers to target millions of users by using artificial intelligence and automation. If just a few calls are successful, criminals see can substantial financial gains. Billions of robocalls are made monthly in the US alone. Losses from robocalling are sky-high, with 2022 estimates at $65 billion lost in scams, according to robocall security firm Robokiller.

In August 2023, the FTC issued a $300 million fine to an international network of companies that made a staggering five billion robocalls to over half a billion phone numbers over three years in 2021.