Avid Telecom Denies Wrongdoing in Multistate AG Robocall Suit

Avid Telecom “operates in a manner that is compliant with all applicable state and federal laws and regulations,” said the company in a statement Tuesday responding to the robocalling lawsuit filed earlier the same day by 48 states and the District of Columbia. The complaint alleges violations of the Telemarketing and Consumer Fraud and Abuse Prevention Act, the FTC's Telemarketing Sales Rule (TSR) and the Telephone Consumer Protection Act.

Avid also violated 11 states’ consumer protection laws and business statutes, by using broadband technology to route its customers’ calls “into, and throughout, the U.S. telephone network,” alleges the Tuesday complaint (docket 4:23-cv-00233) in U.S. District Court for Arizona in Tucson.

VoIP service provider Avid, CEO Michael Lansky and Vice President Stacey Reeves facilitate robocalls or help others make robocalls, alleged the complaint, saying the company received 329 notifications from the USTelecom-led Industry Traceback Group putting it “on notice” it was transmitting illegal robocalls. Avid “chose profit over running a business that conforms to state and federal law” instead of implementing procedures to prevent or mitigate robocalls, the complaint said.

Avid should have known it was facilitating telemarketers' transmission of illegal robocalls based on its call detail records, said the complaint. Defendants were on notice through tracebacks and complaints from downstream providers that their network was being used by telemarketers or sellers to send illegal robocalls, it said. Lansky and Avid have been on notice about illegal call traffic “for many years” for Avid's customers’ calls to residential and cellular lines pitching goods and services including healthcare products and vehicle warranties, it said.

Avid provided services “customized to the needs” of robocallers by enabling them to place a high volume of calls in quick succession, billing only for the duration of completed calls “and ignoring clear indicia of illegal call traffic,” alleged the complaint. The company gave its customers direct inward dialing numbers (DIDs), which would appear to the call recipients as caller IDs, it said.

DIDs were “likely provided to circumvent the procedural guardrails” of the caller authentication framework of the FCC-mandated Stir/Shaken protocols that would otherwise mark a randomly generated or used calling number as “unverified” -- and cause such calls to be blocked from being delivered to the called party at a network level by a downstream provider, it said.

Defendants have “quick and inexpensive access" to millions of DIDs they sell or lease to customers in bulk and “were capable of providing DIDs for telephone numbers from every area code” in the U.S., the complaint said. Scammers use “spoofing” to manipulate the caller ID system so their calls appear to be coming from legitimate phone numbers, it said.

The AGs’ allegations can't be sustained as a matter of fact and don’t support the legal claims presented, said Avid’s statement. The company “has never been found by any court or regulatory authority to have transmitted unlawful traffic” and is prepared to meet with the AGs, “as it has on many occasions in the past,” to show its “good faith and lawful conduct.” The company is “disappointed” the AGs didn’t communicate their concerns directly before filing suit, and it will “defend itself vigorously and vindicate its rights and reputation through the legal process.”

The AGs seek a permanent injunction preventing defendants from initiating or transmitting illegal robocalls to U.S. consumers and from transmitting calls that violate the TSR, plus an award of damages of $1,500 per Title 47 violation, civil penalties of $10,000, or three times that for each day of continuing violation, and state penalties.