The US Federal Communications Commission (FCC) on Tuesday proposed a record $225 million fine against a Houston, Texas-based health insurance telemarketing company for apparently making approximately 1 billion illegally spoofed robocalls.
The record-breaking fine represents the largest fine in the FCC’s 86-year history and reflects “the seriousness of the apparent violations by John C. Spiller and Jakob A. Mears, who used business names including Rising Eagle and JSquared Telecom.” Rising Eagle made approximately 1 billion illegally spoofed robocalls across the country, on behalf of clients selling short-term limited duration health insurance plans, through the first 4.5 months of 2019. Spiller admitted to making millions of calls per day using spoofed numbers. Spiller also allegedly admitted that he intentionally contacted consumers on the Do Not Call list because “he believed that it was more profitable to target those consumers,” according to the USTelecom Industry Traceback Group (Traceback Group), a collaborative that actively traces and identifies sources of illegal robocalls.
The robocalls made several false claims, offering health insurance plans from well-known health insurance companies such as Aetna, Cigna, Blue Cross Blue Shield and UnitedHealth Group, according to the FCC. However, once a consumer expressed an interest they were transferred to a call center with no affiliation to the named companies and offered health insurance plans from one of Rising Eagle’s clients. Notably, one of Rising Eagle’s largest clients was Health Advisors of America, a Florida-based company that was sued by the Missouri Attorney General in February 2019 for telemarketing violations.
The FCC notes that since 2018, there has been a steady “increase in consumer complaints and robocall traffic related to health insurance and other health care products.” According to the Traceback Group, approximately 23.6 million health insurance robocalls were placed each day, and the FCC’s Enforcement Bureau determined that “a large portion of this unwelcome robocall traffic was driven by Rising Eagle.”
The FCC investigation found that a large portion of the robocalls were driven by Rising Eagle and spoofed in an attempt to deceive customers and target millions of Do Not Call list participants. Many of these calls were received on wireless phones without prior consumer consent and in violation of the Truth in Caller ID Act of 2009, which prohibits manipulating caller ID information with the intent to defraud, cause harm, or wrongfully obtain anything of value.
The proposed action contains only allegations and merely represents the maximum monetary penalty that the FCC may impose in a Final Action. The parties subject to the proposed action will be given an opportunity to respond and the FCC will consider all proper evidentiary submissions and legal arguments before acting further to resolve the matter.
More information on the FCC’s efforts to combat robocalls & spoofing can be found here.
