VoIP Provider XCast Reaches Settlement with DOJ Over Illegal Telemarketing Allegations

The U.S. Department of Justice (DoJ) and VoIP service provider XCast recently reached a settlement following allegations of facilitating illegal telemarketing campaigns since January 2018. This settlement showcases ongoing efforts to crack down on fraudulent activities that plague millions of American consumers. Let’s delve into the details of the allegations, compliance measures, the civil penalty judgment, and XCast’s deceptive practices.

Allegations and Compliance Measures

XCast is accused of facilitating illegal telemarketing campaigns, specifically transmitting billions of illegal robocalls to American consumers. These calls included scam messages fraudulently presenting themselves as government agencies. To address these allegations, the stipulated order requires XCast to take various compliance measures.

One of the crucial compliance measures is the establishment of a robust customer screening process to identify potential instances of illegal telemarketing. This step aims to prevent XCast from aiding companies engaged in deceptive practices. By scrutinizing new and existing customers thoroughly, XCast can create a filter against unauthorized telemarketing activities.

Civil Penalty Judgment

As part of the settlement, XCast has been imposed with a $10 million civil penalty judgment. However, due to the company’s current financial constraints, the order has been temporarily suspended. The suspension acknowledges XCast’s inability to meet the financial obligation at present.

Illegal Robocalls and Scam Calls

XCast’s VoIP services served as the conduit for transmitting billions of illegal robocalls. These calls targeted American consumers, with a large number being sent to individuals who had listed their numbers on the National Do Not Call Registry. Taking advantage of technological loopholes, XCast allowed scam calls to reach unsuspecting victims.

Deceptive Marketing Tactics

The prerecorded marketing messages delivered through XCast’s VoIP services contained false or misleading information. Many calls falsely claimed to be affiliated with reputable government entities, employing deceptive tactics to deceive victims into making purchases or divulging sensitive information. For instance, some calls claimed to be from the Social Security Administration, threatening recipients with utility service disconnection unless immediate payments were made. These manipulative tactics aimed to exploit public fear and urgency.

Urging Consumers to Take Action and Cut Ties

In addition to falsely affiliating with government entities, XCast’s illegal telemarketing campaigns also encouraged consumers to act quickly to reverse fraudulent credit card charges. By taking advantage of individuals’ concerns about their financial security, XCast aimed to exploit vulnerable consumers. As a consequence, XCast has now been ordered to disassociate itself from companies that do not comply with U.S. telemarketing laws, ensuring that its alliances are only with entities that prioritize compliance.

Permanent Prohibition and Compliance Requirements

The stipulated order permanently prohibits XCast Labs from providing VoIP services to any company with which it does not have an automated procedure to block calls displaying invalid Caller ID phone numbers. Additionally, it mandates that all calls be authenticated through the Federal Communications Commission’s (FCC) STIR/SHAKEN Authentication Framework. These compliance requirements ensure that XCast takes proactive measures to prevent unauthorized and deceptive telemarketing activities.

The settlement between the U.S. Department of Justice and XCast highlights the severity of illegal telemarketing and its detrimental impact on American consumers. By imposing a significant civil penalty judgment and requiring compliance measures, the DoJ aims to deter similar fraudulent activities in the future. XCast’s involvement in transmitting billions of illegal robocalls, including scam calls impersonating government entities, underscores the urgent need for industry-wide accountability. As consumers, it is crucial to remain vigilant and report any suspicious telemarketing practices. Together, we can combat illegal telemarketing and protect our privacy and financial security.

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