New Federal-State Robocall Crackdown Targets ‘Consent Farms,’ Lead Generators

Five newly announced FTC enforcement actions against illegal robocalls and telemarketing fraud marked Tuesday’s debut of Operation Stop Scam Calls, a nationwide “enforcement sweep” involving more than 100 federal and state agencies, including DOJ, the FCC and the attorneys general of all 50 states, plus the District of Columbia.

Cracking down on so-called “consent farms” will be a key focus of the new initiative, Samuel Levine, director of the FTC’s Bureau of Consumer Protection, told a news conference Tuesday from the agency’s Chicago office. Consent farms “turbocharge the scourge of unwanted calls in this country by luring consumers with offers for jobs or rewards, tricking them into turning over their personal information, and claiming consumers have consented to be robocalled,” he said. “This consent is not real, and from our experience as law enforcers and as human beings, we don’t know many people out there who enjoy getting spam calls.”

The consent farms sell consumers’ personal information as “leads” to telemarketers, “who then believe they have free rein to blast consumers with spam calls,” said Levine. It’s hard to “overstate” the role these consent farms play in our country’s “epidemic” of spam calls, he said. “By obtaining phony consent from millions of consumers, and then selling these leads to unscrupulous telemarketers, they’re fueling fraud and opening the door to billions of robocalls,” he said. By means of the new initiative announced Tuesday, the agencies involved “are looking to shut that door and lock it,” he said.

One of the new FTC enforcement actions is against Fluent, a New York-based publicly traded company that’s “one of the largest consent farms out there,” said Levine. Fluent and its affiliates “use online ads promising a job interview or a free gift card to lure people to its website,” he said. “Once there, consumers will fill in their information to try to get what they’ve been promised,” but Fluent in reality “was tricking people into consenting to get robocalled and other marketing solicitations” from perhaps hundreds of marketers, he said. Tricking consumers into consenting to get robocalls "is not clever, it is not innovative, it is illegal," said Levine.

Fluent, in less than two years, collected more than 620 million telemarketing leads, said Levine. The FTC’s complaint and consent decree with Fluent “broadly bans the company from any future involvement with robocalls,” he said. As part of the settlement, Fluent will pay a $2.5 million civil penalty, he said. DOJ filed the complaint Monday against Fluent (docket 9:23-cv-81045) on the FTC’s behalf in U.S. District Court for Southern New York in Manhattan.

Two more cases announced Tuesday were against Viceroy Media Solutions, another consent farm that gathers and sells leads, and Yodel Technologies, a telemarketing company that distributed more than 1.4 billion robocalls over about a three-year period, said Levine. “Most of those calls used soundboard technology to play prerecorded audio clips that sound like an actual conversation,” he said. Both those companies “will be banned from having any further involvement with robocalls,” he said. The action against Viceroy (docket 3:23-cv-03516) was filed Friday in U.S. District Court for Northern California in San Francisco. The complaint against Yodel (docket 8:23-cv-01575) was filed Friday in the Middle District of Florida in Tampa.

VoIP is “another key factor” in the proliferation of illegal robocalls, said Levine. VoIP is how many foreign callers “can get access to the U.S. telecom system,” he said. In their complaint (docket 1:23-cv-22553) against one VoIP provider, Hello Hello Miami, filed July 10 in U.S. District Court for Southern Florida in Miami, DOJ and the FTC alleged that the company transmitted “tens of millions” of robocalls from foreign telemarketers, he said. The telemarketers illegally impersonated agents from Amazon, who falsely warned consumers that their accounts had been compromised, he said.

In the last of the five newly announced actions, the FTC teamed with DOJ and Arizona Attorney General Kris Mayes (D) to bring suit against Solar Xchange, a seller of residential solar panels, and its lead generator, Vision Solar. The complaint (docket 2:23-cv-01387) filed Friday in U.S. District Court for Arizona in Phoenix, alleges the companies were responsible for placing tens of millions of illegal robocalls to phone numbers on the national do not call registry, said Levine. More than 150,000 consumers “were called at least 50 times each,” and more than 12,000 consumers were called at least 100 times each, he said.