FTC Sues to Stop XCast Labs from Facilitating the Delivery of Millions of Illegal Robocalls, Even After Being Warned on Multiple Occasions

The Federal Trade Commission (FTC) sued to stop a Voice over Internet Protocol (VoIP) provider, XCast Labs, Inc. (XCast Labs), that continued to funnel hundreds of millions of illegal robocalls through its network, even after receiving multiple warnings. The Department of Justice filed the complaint in the Central District of California on the FTC’s behalf.

XCast Labs provides service to companies throughout the country, including hosted IP-PBX, SIP trunking, carrier services, and call center solutions. According to the lawsuit, XCast Labs played a key role in helping telemarketers flood homes with unlawful robocalls, including robocalls impersonating the Social Security Administration. An interesting side note, XCast Labs is a member of the Industry Traceback Group (ITG), the very organization charged with helping the government investigate and combat illegal robocalling activities.

Allegations against XCast Labs include:

• Facilitation of illegal robocalling: XCast Labs is accused of providing crucial infrastructure and services to telemarketers and scammers to conduct robocalls. This includes providing autodialing platforms, caller ID spoofing services, and other technologies that enable the widespread distribution of unwanted and fraudulent calls.
• Violation of the Telemarketing Sales Rule (TSR): The lawsuit asserts that XCast Labs knowingly assisted telemarketers in bypassing legal requirements imposed by the TSR. This includes making calls to numbers listed on the National Do Not Call Registry, making misleading or deceptive claims during calls, and failing to transmit accurate caller identification information.

The FTC’s lawsuit against XCast Labs highlights the government’s continued commitment to combating illegal robocalling practices. As our valued client, we strongly advise you to take necessary steps to ensure compliance with consumer protection laws. By doing so, you can mitigate potential legal risks and safeguard your business’s reputation.

HOW CAN VOIP PROVIDERS AVOID POTENTIAL LAWSUITS?

If nothing else, this litigation should serve as a stark reminder that any warnings sent by the FTC or the ITG must be taken seriously, and concrete steps must be taken to curb and rectify any highlighted infractions. One thing is certain:

“VoIP service providers should never turn a blind eye to suspicious traffic on their networks”

For more information, please contact Jonathan S. Marashlian at jsm@commlawgroup.com for assistance.