Category: Litigation

So just last month the covered the story of Phone Burner being absolutely destroyed by a recent FCC order directing carriers to stop carrying its traffic. It be came the most read story EVER on TCPAWorld.com.

This one might be even bigger.

Before I get to the punchline, bear with me for a second.

Ringless voicemail.

I have been saying for many years that these things are covered by the TCPA. The Courts have said it. The FCC has said it.

But the ringless voicemail providers, by and large, refused to get the message. As recently as late last year I still have people coming to me telling me that this platform or that service was telling them that the TCPA does not apply to ringless voicemail. And I have personally heard sales pitches within the last couple of years where a ringless voicemail provider told potential customers the TCPA does not apply to the technology.

Lies, lies and more lies. And I hate lies.

The argument for RVM not being covered by the TCPA is a dreadful one. Some lawyer–NOT ME– long ago prepared a white paper suggesting that because voicemail is a title III information service and not a title II communication service that, somehow, that means the direct drop process to leave a voicemail also wasn’t a communication. Its nuts. Totally irrational. And beyond that, it was just dumb.

There was a better rationale for the argument–that the messages traversed business class landlines and not cellular networks–but that argument, too, has been rejected in recent years.

Anyhoo, RVM are definitely covered by the TCPA and that is a fact that has been known for many years. But that did not stop one major RVM provider from–allegedly–allowing its users to blast folks without consent.

And here is where we get to the big news: On Friday the Department of Justice filed a massive complaint–on referral from the FTC–against a debt relief company that was allegedly violating the TSR by sending RVMs without consent and failing to include content required by the TSR in the message.

Please notice that the complaint was NOT just filed against the debt relief company. It was filed against Stratics Networks–the wholesale carrier that permitted the traffic and also, apparently, supplied the RVM platform that was used to send the messages. But the complaint was also filed against the intermediary VOIP service provider, Netlatitude, Inc.–and its president Kurt S. Hannigan personally (!),  that provided access to the debt relief company through Stratics (or perhaps vice versa.)

The actual wrongdoers were apparently a debt relief company called Tek Ventures, LLC, doing business as Provident Solutions and a marketing company hired by Provident–Atlas Marketing Partners, Inc.

A bunch of other players, including INDIVIDUALS are also named as the FTC and DOJ really came to play with a sledgehammer here.

Each of these companies (and people) are alleged to have done something a bit different wrong. And its worth seeing how the government is going after each member of the alleged illegal robocall ring.

Of most interest to me–and I suspect most of you–is the case against Stratics. Like Phone Burner, Stratics is a very well known platform out there. Big footprint. And it is perceived to be a fairly compliant player.

Out of the gate, some of the allegations of the Complaint seek to impose a MUCH broader set of requirements on a carrier than have ever been seen before. For instance, the DOJ complains:

• Despite acknowledging in its terms and conditions of service that its customers must “obtain the prior written consent from each recipient to contact such recipient” “[w]here required by applicable law or regulation,” Stratics Networks did not have evidence of such consent and did not request or require that its customers submit such evidence;

• Stratics Networks has access to the prerecorded messages its customers upload to its RVM platform and reserves the right to audit its customers’ accounts in its terms and conditions of service, but it does not conduct due diligence to ensure that the messages actually identified the seller or caller, or to prohibit the transmission of prerecorded messages that failed to do so, or to ensure that that the call recipient had given express consent to receive the call; and

• Stratics did not “require[]” and “ensur[e] that users  obtain prior express written consent from recipients, scrub lists of uploaded phone numbers against the DNC Registry, or otherwise comply with the TSR as a condition of using the platform.

But, so what?

A carrier owes no duty to at law to review the content of messages sent over its network. Gees, it would be a huge violation of privacy if it did. And sure an RVM platform may have access to the voicemails that were uploaded but since when is it required to review those and provide compliance advice? That’s just plain nuts.

Further, the fact that Stratics required consent for users of its platform is plenty. Folks use AUPs and disclosures to assure their platforms are not being misused. Since when does the law require them to actually possess consent–or “require” and “ensure” compliance– before allowing someone to use their network? Since never. And its just nuts for the FTC and DOJ to suggest otherwise.

Outside of really extreme cases, a carrier is still just a carrier. And a platform is still just a platform. Sure there can be times when these companies are so involved with messages–or know (we’ll get to that) of abuses–such that they are responsible as if they had sent them. But in the ordinary course these folks have NO DUTY to ensure…. anything.

So I’m a bit perturbed by the insinuation that these allegations, alone, make Stratics blameworthy. They speak to duties that do not exist in the law. If the DOJ and FTC doesn’t like the current state of the law they should take it up with Congress (or, in the case of the FTC, start an NPRM process, hint hint.)

But other allegations are more damaging–particularly those related to the knowledge Stratics had about the use of its platform. And, here again, we see the ITG playing a big role.

Per the Complaint, “Stratics Networks received numerous Traceback Requests from USTelecom’s ITG alerting it to suspected illegal robocall traffic delivered via Stratics Networks’ RVM platform service and seeking its assistance in identifying the source(s) (i.e., upstream carrier or originating end-user) of these “likely illegal” robocalls, including over 30 such requests between August 2019 and February 2021.”

Now 30 requests may seem like a lot, but you have to keep in mind how active the ITG is. They’re firing off a ton of “tickets” every single day. So I’m not convinced that 30 tickets over a year and a half is really that big of a deal. Plus, these tickets are directed at the content of user messages traversing the Stratics network–it does not mean that any of these were actually Stratics customers. (BTW, the DOJ was kind enough to name a bunch of the ticket sources: “Atlas Marketing, Telecord, Telesero, Health Innovations, National Homebuyers, Elite Processing, Deltracon, Technest Limited, Shamoon Ahmad, Progressive Promoting, Nitzke Enterprize, Care Advocacy Solutions, and PubClub.” Hope your name isn’t in there!)

So, again, I don’t love the government’s case so far. But it does get stronger. For instance:

• In some instances, even when Stratics Networks did identify the RVM customers responsible for these illegal robocalls, Stratics Networks allowed these RVM customers to open additional accounts and/or continue utilizing its RVM platform service for several weeks or months without suspending or terminating their RVM accounts.

• In some instances, Stratics Networks did not suspend these RVM customers’ accounts until after it received a civil investigative demand from the FTC in November 2020 inquiring about prerecorded messages delivered using its RVM platform service.

Ok, now the government is getting closer. The case law is reasonably clear that where a carrier or platform knows of illegal traffic on its network it does need to take some action to prevent it. If Stratics allowed customers who were committing violations to open new accounts or run new campaigns that could be a problem, unless it did extra heightened diligence to assure compliance.

But now, the big allegations:

• Several of US Telecom’s ITG’s Traceback Requests to Stratics Networks concerned robocalls delivered over Stratics Networks’ RVM platform as part of the Atlas Defendants’ debt relief telemarketing campaign, including Traceback Requests Stratics Networks received between April and June 2020. These Traceback Requests indicated that they concerned a “DebtReduction-Hardship” or “DebtReduction CoronaHardship” campaign, and they noted that the robocalls delivered prerecorded messages offering preapproved loans and did not identify the caller.

• Notwithstanding Stratics Networks’ representation to US Telecom’s ITG in response to a April 29, 2020 traceback request that it “ha[d] taken immediate action and triggered a full investigation” into the Traceback Request and “also suspended traffic,” Stratics Networks permitted Atlas Marketing to continue using its RVM platform service to deliver millions more robocalls for over five more months;

• After April 29, 2020, Stratics Networks permitted Atlas Marketing to use its RVM service to deliver more than 23 million additional ringless voicemail robocalls to American consumers.

Ok so Stratics allowed 23 million voicemails by Atlas after telling the ITG it would suspend its traffic. Now that could be a problem. Especially if those 23MM voicemails violated the TSR and TCPA (although that fact is, perhaps tellingly, left out of the complaint.)

Notice the timing here also. ITG tickets went out in April, 2020. A CID followed in October, 2020. And then the complaint was filed in February, 2023 two and a half years later.

So all of you carriers and platforms that have received ITG tickets followed by CIDs, keep this in mind. Even if a year or more has passed, the FTC might still be working the case.

So what did Netlatitude do wrong? Well this appears to be a volume play. Specifically the FTC is concerned that Netlatitude allowed Atlas to send “136,000 robocalls” using Stratics Networks’ SIP termination service on just two days in September 2020.

Again, I kind of want to shrug at that. While high volume traffic can be a red flag, there is ZERO requirement a carrier decline to carry traffic merely because there might be a lot of it.

Netlatitude also apparently received several ITG tickets but it is not clear that they had anything to do with Atlas. So I am very fuzzy as to why Netlatitude is in the case–except that Stratics apparently pointed the finger at Netlatitude and its President.

As to the debt relief companies, the claims here are wide and varied. First, there is a claim of straight consumer deception. They allegedly promised consumers they’d be out of debt in two years and that monthly payments would be used in a way that turned out not to be true. Ok. Makes sense.

Next they allegedly sent voicemails that did not identify the sender and sent calls to numbers on the DNC list without consent. Again, pretty straightforward.

They also allegedly received a fee prior to providing debt relief, which is also not permitted. So… if true, open and shut case. I think.

In the end the government is asking for a bunch of stuff. Most damaging for Stratics is the injunctive relief provision:

A. Enter a permanent injunction to prevent future violations of the TSR and the FTC Act by Defendants;

B. Award monetary and other relief within the Court’s power to grant;

C. Award Plaintiff monetary civil penalties for every violation of the Telemarketing Sales Rule; and

D. Award Plaintiff such other and additional relief the Court may determine to
be just and proper

Lots of big take aways here. We already knew that carriers and platforms can’t turn a blind eye to bad traffic on their networks, but in this case the government seeks to go much further and impose duties on these companies to “require” and “ensure” only lawful traffic traverses their networks. That is just craziness and I think a lot of carriers will fold up shop if they suddenly become strictly liable for misconduct on their networks. Indeed, just 8 years ago carriers were completely beyond liability for traffic on their network and now they are to be treated as always liable for it? That is unfair and absurd.

Obviously those of you in the debt relief game need to pay careful attention here as well. NO cheating allowed. If you make a representation it has to be true. And don’t charge that fee up front–can get you into trouble.

Notice also that NONE of these claims are brought under the TCPA. But some could have been. The TCPA also prevents the use of RVMs to to cell phones without the proper level of consent. And the TCPA bans solicitations to residential numbers on the DNC list. I presume the DOJ didn’t want to tangle with any additional issues here–or perhaps the FTC did not want to tread on the FCC’s toes by moving into TCPA issues. Unclear to me.

But what IS clear to me is that this complaint is a huge deal and should really have every carrier and platform out there asking itself what the future may hold…

Read the complaint here: Complaint Against Stratics, et al.