[Federal Register Volume 78, Number 245 (Friday, December 20, 2013)]
[Proposed Rules]
[Pages 77024-77026]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-30290]



16 CFR Part 310

RIN 3084-AB19

Telemarketing Sales Rule; Notice of Termination of Caller ID 

AGENCY: Federal Trade Commission (``Commission'' or ``FTC'').

ACTION: Notification.


SUMMARY: After reviewing the public comments elicited by an Advance 
Notice of Proposed Rulemaking (``ANPR'') seeking suggestions on ways to 
enhance the effectiveness and enforceability of the caller 
identification (``Caller ID'') requirements of the Telemarketing Sales 
Rule (``TSR''), as well as technical presentations at the FTC's 2012 
Robocall Summit, the Commission has determined that amending the TSR 
would not reduce the incidence of the falsification, or ``spoofing,'' 
of Caller ID information in telemarketing calls. Accordingly, the 
Commission is closing this proceeding.

DATES: This action is effective on December 5, 2013.

ADDRESSES: Federal Trade Commission, Office of the Secretary, Room H-
113 (Annex J), 600 Pennsylvania Avenue NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Craig Tregillus, Attorney, Division of 
Marketing Practices, Bureau of Consumer Protection, Federal Trade 
Commission, Room H-286, 600 Pennsylvania Ave. NW., Washington, DC 
20580, (202) 326-2970.

SUPPLEMENTARY INFORMATION: When the Commission amended the TSR in 2003, 
it added a requirement that telemarketers transmit identifying 
information to Caller ID services.\1\ Violations of this provision can 
lead to civil penalties of up to $16,000 per violation, in the case of 
unlawful conduct that has ended, or $16,000 per day, in the case of 
ongoing violations.\2\ The Commission explained that it added this 
prohibition to (1) promote consumer privacy by enabling consumers to 
know who is calling them at home; (2) encourage industry accountability 
and help legitimate businesses distinguish themselves from deceptive 
ones; and (3) assist law enforcement in identifying TSR violators.\3\ 
The use of Caller ID information, however, has changed

[[Page 77025]]

since 2003 with the growing availability of technologies that allow 
callers to alter or ``spoof'' the number and name that appear on the 
recipient's Caller ID display.\4\

    \1\ Telemarketing Sales Rule, Statement of Basis and Purpose and 
Final Amended Rule, 68 FR 4580, 4672 (Jan. 29, 2003) (then codified 
at 16 CFR 310.4(a)(7), now at 16 CFR 310.4(a)(8)).
    \2\ See 15 U.S.C. 45(m)(1)(A); see also Federal Trade Commission 
Civil Penalty Adjustments, 74 FR 857 (Jan. 9, 2009). In addition, 
the Truth in Caller ID Act of 2009 makes it unlawful ``to cause any 
caller identification service to knowingly transmit misleading or 
inaccurate caller identification information with the intent to 
defraud, cause harm, or wrongfully obtain anything of value'' and 
provides criminal penalties and forfeitures for violations. 111 
Public Law 331, 124 Stat. 3572, codified at 47 U.S.C. 227(e). The 
Federal Communications Commission enforces that statute, and has 
issued implementing regulations. See 76 FR 43196, 43203-06 (July 20, 
2011). Further, a number of states have enacted anti-spoofing laws. 
See Office of the Minnesota Attorney Gen., Comment No. 00053, at 3, 
n.7 (citing Minn. Stat. Sec.  325E.312; Fla. Stat. Sec.  817.487; 
815 Ill. Comp. Stat. Sec.  517/10; La. Rev. Stat. Ann. Sec.  
51:1741.4; Miss. Code Ann. Sec.  77-3-805; Ok. Stat. Ann. Sec.  
    \3\ 68 FR 4627.
    \4\ See S. Rept. 96, 111th Cong., 1st Sess. 1-2 (2009); Hearing 
before the House Subcomm. on Telecomm. and the Internet, Truth in 
Caller ID Act, 110th Cong., 1st Sess. Ser. No. 110-8, 9-10 (2007) 
(test. of Kris Monteith); H. Sengar, D. Wijesekera, S. Jojodia, 
Authentication and Integrity in Telecommunication Signaling Network, 
Proceedings of the 12th IEEE Int'l Conf. and Workshops on the Eng'g 
of Computer-Based Systems (2005).

    On December 15, 2010, the Commission issued an ANPR requesting 
public comment on whether the TSR should be amended to help effectuate 
the objectives of the Rule's Caller ID provisions, including, in 
particular, enabling consumers and law enforcement to use Caller ID 
information to identify entities responsible for illegal telemarketing 
practices.\5\ The Commission received public comments from 51 different 
individuals and entities in response to the ANPR.\6\ Of these, 28 came 
from consumers, one from a state attorney general,\7\ and the remainder 
from a standards organization,\8\ attorneys,\9\ trade associations,\10\ 
telemarketers,\11\ and telecommunications carriers \12\ and their 
service providers.\13\

    \5\ 75 FR 78179 (Dec. 15, 2010).
    \6\ The comments are available online at www.ftc.gov/os/comments/tsrcalleridnprm/index.shtm and are identified here by the 
commenter's name and the comment number. One comment was blank 
(Errickson, No. 00041), one was entered twice (AT&T Servs., Inc., 
Nos. 00040, 00057), and one added an addendum reiterating a prior 
comment (Smith, Nos. 00021, 00024).
    \7\ Office of the Minn. Atty. Gen., No. 00053.
    \8\ Alliance for Telecomm. Indus. Solutions, No. 00048.
    \9\ Copilevitz & Canter, LLC, No. 00036; Heyman Law Office, No. 
    \10\ E.g., ACA Int'l, No. 00042; American Teleservices Ass'n, 
No. 00050; Direct Mktg. Ass'n, No. 00051.
    \11\ E.g., InfoCision Mgmt. Corp., No. 00052; MDS Commc'ns, No. 
00046; Soundbite Commc'ns, No. 00056.
    \12\ AT&T Servs., Inc. No., 00040; NobelBiz, Inc., No. 00043; 
Verizon and Verizon Wireless, No. 00044.
    \13\ E.g., Bent, 00045; Martino, No. 00022; Omega Servs., LLC, 
No. 00054.

    The consumer comments generally favored any TSR revision that would 
make Caller ID services more accurate to help in identifying and 
halting unwanted telemarketing calls.\14\ The business and trade 
association comments largely opposed any modifications,\15\ arguing 
that additional restrictions would only burden legitimate businesses, 
and do nothing to halt Caller ID spoofing. Both consumer and business 
comments noted the harm each has incurred when spoofing has caused 
their telephone numbers to appear on consumers' Caller ID displays, 
subjecting them to consumer complaints and the loss of business 

    \14\ E.g., Bensor, No. 00016; Grout, No. 00034; Herrera, No. 
00025; Michael, No. 00017; Smith, 00020. A few consumers advocated 
making Caller ID spoofing a criminal offense, which the Commission 
lacks the statutory authority to do. E.g., Fox, No. 00027; Messer, 
No. 00018; Shields, No. 00029.
    \15\ E.g., American Teleservices Ass'n, No. 00050, at 5; AT&T 
Servs., Inc., No. 00040, at 3-4; Verizon and Verizon Wireless, No. 
00044, at 3-4. Some of the comments supported proposals to give 
sellers and telemarketers greater flexibility in choosing what may 
appear in Caller ID name displays, such as authorization to use 
well-known product names. See, e.g., Teleperformance USA, No. 00037. 
These proposals may be raised by commenters in the forthcoming 
review of the TSR. See 78 FR 30798, 30799 (May 23, 2013) (noting 
intent to undertake scheduled ten-year review of TSR).
    \16\ Direct Mktg. Ass'n, No. 00051; Booth, No. 00031; Messer, 
No. 00018; Minn. Atty. Gen., No. 00053, at 2; Publishers Clearing 
House, No. 00049, at 1; Quicken Loans, No. 00058, at 2.

    None of the comments submitted in response to the ANPR suggested 
that any additions or modifications to the TSR could reduce the 
incidence of Caller ID spoofing. In fact, as previously indicated, 
Caller ID alteration unquestionably violates the prohibition added to 
the TSR in 2003 that bars telemarketers from ``failing to transmit . . 
. the telephone number and . . . the name of the telemarketer to any 
caller identification service in use by a recipient of a telemarketing 
call.'' \17\ By definition, a spoofed telephone number is not the 
number of the telemarketer, and the Commission can rely on this 
prohibition to bring an enforcement action for violation of the TSR 
against a telemarketer that uses a spoofed number.

    \17\ See supra note 1.

    Moreover, any modification of the TSR likely would be circumvented 
by those intent on falsifying Caller ID information without detection 
because there is no apparent technical solution to the problem that is 
likely to be implemented in the near term. The comments in response to 
the ANPR and in presentations at the FTC's 2012 Robocall Summit \18\ 
demonstrate that, as one commenter put it, ``it is not technically 
feasible, by looking at the signaling data . . . to distinguish between 
a CPN [calling party number] that has been manipulated and one that has 
not.'' \19\ This is because the telephone network originally was 
designed to transmit only basic information, including the CPN and name 
used for billing.\20\ Although CPN once sufficed to establish the 
identity of a caller, this is no longer the case. With the advent of 
such newer technologies as Voice over Internet Protocol (``VoIP'') and 
programmable autodialers that allow manipulation (and falsification) of 
the CPN, CPN can no longer function to authenticate the source of all 
calls.\21\ Thus, until future modifications to the telephone signaling 
system provide a more reliable authentication mechanism, prohibitions 
in the Caller ID provisions of the TSR can be technically evaded.\22\ 
Violators using spoofed numbers and names are difficult to track down 
and identify, and some are based in foreign countries to further 
complicate law enforcement by U.S. authorities.

    \18\ The FTC 2012 Robocall Summit, convened with the goal of 
developing solutions to the rapid rise in illegal robocalls, 
included an update on the current state of robocall technology, a 
discussion of the laws surrounding the use of robocalls, and an 
exploration of potential technological solutions to the problem of 
illegal robocalls (including panels on caller-ID spoofing and call 
authentication technology, data mining and anomaly detection, and 
call-blocking technology).
    \19\ AT&T Servs., Inc., No. 00040, at 2. Adam Panagia, the 
Director of AT&T's Network Fraud Investigation Team made the same 
point at the Robocall Summit. See FTC Summit, Robocalls: All the 
Rage (Oct. 18, 2012), Tr. at 127, available at http://www.ftc.gov/bcp/workshops/robocalls/docs/RobocallSummitTranscript.pdf.
    \20\ See generally, FTC Robocall Summit, Tr. at 12-17 (Steve 
Bellovin, FTC Chief Technologist) (recounting the history of the 
development of the telephone and signaling systems).
    \21\ Id. at 21-26, 121-25 (Henning Schulzrinne, Federal 
Communications Commission Chief Technology Officer).
    \22\ The record indicates that at least one technical proposal 
has been advanced that might be able to solve the authentication 
problem, see Bent, No. 00045, but it appears that this or any other 
technical solution to Caller ID spoofing will not be available in 
the near term and would require modification of the current 
signaling system and likely action by the Federal Communications 
Commission. See Stopping Fraudulent Robocall Scams: Can More Be 
Done? Hearing Before the Subcomm. on Consumer Prot., Prod. Safety, 
and Ins. of the S. Comm. on Commerce, Sci. and Transp. (July 10, 
2013) at 21, n.74 (Prepared Statement of the Federal Trade 
Commission) available at http://ftc.gov/os/testimony/113hearings/130710 robocallstatement.pdf (outlining the technical work to be 
done in the ``coming months and years'').

    Notwithstanding the likely persistence of the problem of Caller ID 
spoofing, market initiatives are underway to commercialize innovative 
new technologies that offer promise for curtailing the number of 
unwanted robocalls that consumers receive.\23\ These technologies rely 
on call filtering systems to help screen out unwanted robocalls, 
including those placed by telemarketers attempting to hide behind 
spoofed telephone numbers. The FTC's

[[Page 77026]]

Robocall Challenge was designed to help address unwanted robocalls by 
spurring innovation in the marketplace.\24\

    \23\ See, e.g., Herb Weisbaum, Why aren't phone companies doing 
more to block robocalls?, NBC News, July 17, 2013, www.nbcnews.com/business/why-arent-phone-companies-doing-more-block-robocalls-6C10641251; www.nomorobo.com (announcing the availability of 
Robocall Challenge winner Aaron Foss' free Nomorobo filter as of 
September 30, 2013).
    \24\ FTC Press Release, FTC Announces Robocall Challenge Winners 
(Apr. 2, 2013), available at http://www.ftc.gov/opa/2013/04/robocall.shtm.

    While the Commission has concluded that modification of the 
existing Caller ID requirements of the TSR would not serve any useful 
purpose at this time, it remains fully committed to combatting illegal 
telemarketing and Caller ID spoofing. In addition to the recent 
Robocall Challenge and Robocall Summit,\25\ the Commission will 
continue to vigorously enforce the TSR, including its prohibition on 
spoofing, and the 2009 rule amendments that prohibit the vast majority 
of robocalls.\26\ Since the creation of the national Do Not Call 
Registry in 2003, the FTC has brought 110 cases alleging Do Not Call 
privacy violations against 320 companies and 263 individuals. The 86 
cases that have concluded thus far have resulted in orders totaling 
over $126 million in civil penalties and $793 million in restitution or 
disgorgement. Under the 2009 amendments, the FTC has brought 34 
robocall cases against 103 companies and 80 individuals,\27\ including 
a number of cases that have alleged TSR Caller ID spoofing 
violations.\28\ As technology changes, the Commission will continue to 
evaluate if and when amending the TSR to specifically address Caller ID 
spoofing would further assist in the Commission's enforcement efforts.

    \25\ See note 18, supra.
    \26\ See Telemarketing Sales Rule, Final Rule Amendments, 73 FR 
51164 (Aug. 29, 2008). The amendments, codified at 16 CFR 
310.4(b)(1)(v), prohibit prerecorded message calls without a 
consumer's prior written agreement to receive them, and require that 
such messages tell consumers at the outset of the message how to 
activate an automated interactive opt-out mechanism that will place 
them on the marketer's do-not-call list and terminate the call. The 
Federal Communications Commission has since adopted corresponding 
requirements that took effect on October 16, 2013. See Telephone 
Consumer Protection Action of 1991, Final Rule, 77 FR 34233 (June 
11, 2012), Telephone Consumer Protection Act of 1991, Final Rule and 
Announcement of Effective Date, 77 FR 63240 (Oct. 16, 2012).
    \27\ These cases include five actions against telemarketers that 
placed robocalls from ``Rachel'' at ``Card Services.'' FTC v. WV 
Univ. Mgmt., LLC, Civ. No. 6:12-1618 (M.D. Fla. filed Oct. 29, 
2012); FTC v. A+ Fin. Ctr., LLC, Civ. No. 2:12-14373 (S.D. Fla. 
filed Oct. 23, 2012); FTC v. The Greensavers, LLC, Civ. No. 6:12-
1588 (M.D. Fla. filed Oct. 22, 2012); FTC v. Ambrosia Web Design, 
LLC, Civ. No. 2:12-2248 (D. Ariz. filed Oct. 22, 2012); FTC v. ELH 
Consulting, LLC, Civ. No. 12-2246 (D. Ariz. filed Oct. 22, 2012); 
see also Press Release, FTC Leads Joint Law Enforcement Effort 
Against Companies That Allegedly Made Deceptive ``Cardholder 
Services'' Robocalls (Nov. 1, 2012), available at http://www.ftc.gov/opa/2012/11/robocalls.shtm.
    \28\ E.g., FTC v. The Cuban Exchange, Inc., Civ. No. 12-5890 
(E.D.N.Y. filed Nov. 28, 2012); FTC v. A+ Fin. Ctr., LLC, Civ. No. 
12-1437 (S.D. Fla. filed Oct. 23, 2012); FTC v. Nelson Gamble & 
Assocs., Civ. No. SACV12-1504 (C.D. Cal. filed Sept. 10, 2012); U.S. 
v. JGRD, Inc., Civ. No. 12-0945 (E.D. Pa. filed Feb. 23, 2012); U.S. 
v. Cox, Civ. No. SACV 11-1910, (C.D. Cal. filed Dec. 12, 2011); U.S. 
v. Sonkei Commc'ns., Inc., Civ. No. SACV11-1777 (C.D. Cal. filed 
Nov. 17, 2011); U.S. v. Feature Films for Families, Inc., Civ. No. 
4:11-0019 (N.D. Fla. filed May 5, 2011); U.S. v. The Talbots, Inc., 
Civ. No. 1:10-10698, (D. Mass. filed Apr. 27, 2010).

    By direction of the Commission.
Donald S. Clark,
[FR Doc. 2013-30290 Filed 12-19-13; 8:45 am]