Caller ID spoofing

Caller ID spoofing is the transmission of inaccurate caller ID information with an outbound call, so that the recipient's caller ID screen displays a number other than the one that originated the call.1 Source: Complaint, FTC v. Grand Bahama Cruise Line, LLC (Jan. 10, 2020) A common variant, neighbor spoofing, occurs when a caller spoofs the area code and exchange of a consumer’s phone number so that the consumer thinks the call is coming from someone near them.2 Source: NetDotSolutions, Inc.: Complaint for Civil Penalties, Permanent Injunction and Other Relief (June 5, 2018)

A caller ID display is often all a recipient has to go on when deciding whether to answer, and later when deciding whom to call back or report, so a false number undercuts both decisions. In an auto-warranty robocall case, the FTC argued that by hiding behind false caller ID information, the defendants frustrated consumers’ efforts to exercise their rights under the Do Not Call provisions of the TSR and to lodge complaints with law enforcement.6 Source: Plaintiff Federal Trade Commission’s Memorandum In Support of Its Motion For A Temporary Restraining Order With Asset Freeze and the Appointment of A Receiver The same memorandum reports that consumers who dialed the number shown after a robocall invariably found it out of service or busy.7 Source: Plaintiff Federal Trade Commission’s Memorandum In Support of Its Motion For A Temporary Restraining Order With Asset Freeze and the Appointment of A Receiver

The harm can also reach bystanders. In the Select Personnel Management matter, the FTC told the court that consumers mistakenly believed the third parties whose numbers appeared on their screens had placed the telemarketing calls.8 Source: Memorandum Supporting Application for Entry of Order for Permanent Injunction and Final Default Judgment

A business that spoofs can face civil penalties, an injunction, and monetary relief. In the Alliance Security complaint, the FTC pleaded that from 2014 until July 31, 2016 the court was authorized to award a penalty of up to $16,000 for each violation of the TSR, and that the maximum was adjusted to $40,000 per violation effective August 1, 2016.33 Source: Complaint for Civil Penalties, Permanent Injunction and Other Equitable Relief, FTC v. Alliance Security, Inc. The Grand Bahama complaint separately pleads that a violation of the TSR constitutes an unfair or deceptive act or practice in or affecting commerce, in violation of Section 5(a) of the FTC Act.34 Source: Complaint, FTC v. Grand Bahama Cruise Line, LLC (Jan. 10, 2020) (quoting 16 C.F.R. §§ 310.4(a)(8), 310.3(b))

The same complaint pleads that Section 13(b) of the FTC Act empowers the court to grant injunctive and such other ancillary relief to halt and redress any violation of any provision of law enforced by the FTC, including the TSR.35 Source: Complaint for Civil Penalties, Permanent Injunction and Other Equitable Relief, FTC v. Alliance Security, Inc. It adds that the court may award ancillary relief, including rescission or reformation of contracts, restitution, the refund of monies paid, and the disgorgement of ill-gotten monies.36 Source: Complaint for Civil Penalties, Permanent Injunction and Other Equitable Relief, FTC v. Alliance Security, Inc. Where spoofing accompanies a broader scheme, the FTC has pushed for more. In the auto-warranty robocall matter it asked for a temporary restraining order with an asset freeze, expedited discovery, and a temporary receiver over one corporate defendant.37 Source: Plaintiff Federal Trade Commission’s Memorandum In Support of Its Motion For A Temporary Restraining Order With Asset Freeze and the Appointment of A Receiver In the Select Personnel Management matter it asked for a $7,852,795 judgment against all defendants.38 Source: Memorandum Supporting Application for Entry of Order for Permanent Injunction and Final Default Judgment

A prior order against spoofing does not end the exposure. In a separate debt collection matter, the FTC told the court that a consent order had enjoined five named parties from engaging in caller ID spoofing, and that the consent order did not stop the defendants from violating the law because they simply resumed their illegal practices using other, newly created entities.39 Source: Memorandum in Support of Plaintiff’s Ex Parte Temporary Restraining Order with an Asset Freeze and Other Equitable Relief, and Order to Show Cause Why a Preliminary Injunction Should Not Issue [Seal Lifted]