The Federal Trade Commission (FTC) reached a settlement with Voice over Internet Protocol (VoIP) provider XCast Labs over allegations the company illegally facilitated hundreds of millions of illegal robocalls, the regulator announced Tuesday.
As part of the settlement, XCast Labs agreed not to violate the Telemarking Sales Rule in the future, to implement a screening process and to end its relationship with firms that are not complying with telemarketing-related laws, according to the FTC.
The order also includes a $10 million civil penalty that was suspended based on the company’s “inability to pay.” That penalty will “immediately become due” if the company is “found to have misrepresented its financial condition,” according to the FTC.
“XCast was warned several times that illegal robocallers were using its services and did nothing,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection.
“Companies that turn a blind eye to illegal robocalling should expect to hear from the FTC,” Levine added.
In a statement to Reuters, the company said the FTC announcement violated the spirit of the settlement “which was that XCAST LABS did not admit to any violations, but agreed to not do what it was already not doing to avoid a costly and protracted defense.”
The Hill reached out to XCast Labs for comment.
The case was litigated by the Department of Justice on behalf of the FTC.
The FTC filed a complaint in May after sending letters to several VoIP providers, including XCast labs, in early 2020 that warned that assisting illegal telemarketing and robocalling is against the law.
Regulators allege that after the warnings, XCast Labs transmitted illegal robocalls, including calls part of organized campaigns to generate telemarking leads by impersonating officials from the Social Security Administration.