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Schumer Introduces the “Quiet Act” to Drastically Increase Punishment on Illegal Robocallers

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Robocall complaints in New York have nearly tripled since 2010 as spammers take advantage of excessively weak penalties.

Albany, New York - February 5, 2014 - In the wake of skyrocketing robocall complaints across Upstate New York, U.S. Senator Charles E. Schumer announced that he is introducing legislation called the QUIET (Quell Unnecessary, Intentional, and Encroaching Telephone Calls) Act of 2014 that will dramatically raise fines and impose harsher punishments on telemarketing companies that violate current federal laws on telemarketing calls. The number of unwanted telemarketing calls has spiked in recent years, especially from already illegal automated calling systems that play pre-recorded telemarketing calls. According to the Federal Trade Commission (FTC), in Upstate New York in FY 2013 there were 131,491 complaints of robocalls from residents, up from 40,639 complaints in 2010.
 
The FTC and FCC have attempted to crack down on such scam artists and robocallers, including by retooling federal regulations, but they will continue to be hamstrung by the minor penalties they can impose, which are miniscule in comparison to financial gains made by telemarketers through such calls.  Schumer’s bill would provide a much stronger disincentive to skirting do-not-call laws, using both financial and legal penalties. 
 
“When it comes to the robocall industry, which is blatantly ignoring federal laws, we need to fight fire with fire – that means higher penalties, jail time, and better technology to fight the spammers who have ruined countless family dinners, sporting events, and other family gatherings,” said Schumer. “Existing laws, including the federal Do Not Call list are great tools to protect consumers, but only if they have real teeth that will stop illegal robocalls in their tracks.  The QUIET Act would stiffen both financial and legal penalties when federal law is violated and should provide a much greater disincentive to skirt do-not-call laws – to the tune of $20,000 and jail time. As Upstate New Yorkers struggle more and more with this invasion of privacy, I hope this legislation will help us hang-up on illegal robocalls.”
 
In 1991, Congress passed the Telephone Consumer Protection Act, which developed significant protections for consumers as it related to phone calls, text messages and faxes. Among other details, the law says that unless a recipient gives prior express consent, telemarketers cannot call residences before 8am or after 9pm and telemarketing companies must keep a company-specific “do-not-call” list, which must be honored. There are a few exceptions for charitable, health-related or emergency phone calls, but otherwise the law imposes a maximum of $1,500 fine on the telemarketer for each violation of the law. In 2003, new legislation created a national do-not-call list.
 
Robocalls use computer software to dial a phone number and then either play a pre-recorded message or connect to a live person. In many cases, these types of calls are made by fraudulent companies trying to steal money from the person on the other end of the phone. Many times, these calls are placed using “caller ID spoofing,” which masks the real source phone number, instead displaying the phone number of a government agency, credit card company or bank. Elderly residents are often the most at-risk of falling victims to these scams. Yet another law, the Truth in Caller ID Act of 2009, makes this practice illegal if used for the purpose of defrauding or otherwise causing harm.
 
The recent spike in illegal robocalls can be attributed in part to advances in technology that allow companies to use automated dialing machines to spam phones – even cell phones – en masse at a very low cost.  This technology has evolved in recent years to allow even a single person to make millions of pre-recorded calls with the click of a mouse.  The current system of relatively minor penalties has not adequately stopped companies from ignoring the federal laws on the legal use of robocalls; companies that stoop to this fraudulent behavior predict that the payouts they’ll receive will be greater than any minor penalties. Under Schumer’s QUIET Act, the use of automated dialing machines without the consent of the call recipient would go from being a misdemeanor punishable by a maximum of $1,500 per violation and no jail time to a felony punishable by up to ten years in prison and $20,000 fines per call.  
 
The National “Do-Not-Call” Registry, managed by the FTC, was implemented in 2003 after the Do-Not-Call Implementation Act of 2003. The registry is designed to give people a choice about whether they would like to receive telemarketing calls at home. It was created to limit the number of telemarketing calls and robocalls made to U.S. households. In order to register, one may log onto the “Do-Not-Call” website and their phone number will be permanently placed in the registry. There are currently over 209 million phone numbers in the registry.  However, under the Telemarketing Sales Rule, the vast majority of calls that deliver a prerecorded message trying to sell you something are illegal; unless you’ve given written permission for the call. These “robocalls” are illegal even if your phone number is not registered on the National Do Not Call Registry.  Schumer’s legislation would increase penalties for any robocalling that does not comply with current federal law.
 
Schumer today unveiled new legislation, the QUIET Act, that will drastically increase punishments for telemarketing companies that continue to make robocalls. Schumer’s bill, introduced in the Senate this week, will punish telemarketing companies that willfully employ robocalls to dial cell phones or residential home phones at $20,000 per violation with up to ten years in prison for the most egregious repeat offenders. He announced the current exceptions to telemarketing laws will be included in his legislation such as charitable, health related, or emergency phone calls. Schumer made the case that his bill will give FTC more tools to go after these fraudulent companies, and alter the incentive structure to dissuade companies from attempting to skirt or ignore the existing Do-Not-Call rules. Schumer explained that harsher penalties on violating companies will curb the number of unwanted telemarketer calls throughout the country. 
 
According to the Federal Trade Commission (FTC), in Upstate New York in FY 2013 there were 131,491 complaints of robocalls from residents, up from 40,639 complaints in 2010. The number of actual calls is likely much higher than number of complaints. Schumer revealed a region-by-region breakdown documenting the uptick in robocall complaints in Upstate New York:
  • In the Capital Region, there were 21,457 robocall complaints in FY2013, up 275% from FY2010
  • In Western New York, there were 21,151 robocall complaints in FY2013, up 287% from FY2010
  • In the Rochester-Finger Lakes, there were 22,316 robocall complaints in FY2013, up 337% from FY2010
  • In the Southern Tier, there were 13,614 robocall complaints in FY2013, up 286% from FY2010
  • In Central New York, there were 14,500 robocall complaints in FY2013, up 238% from FY2010
  • In the Hudson Valley, there were 52,544 robocall complaints in FY2013, up 418% from FY2010
  • In the North Country, there were 10,039 robocall complaints in FY2013, up 275% from FY2010
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