United States Settles Suit Against Telecommunications Service Provider for Assisting and Facilitating Illegal Robocalls

Voice over Internet Protocol (VoIP) service provider XCast Labs Inc. (XCast) has agreed to a court order resolving allegations that it violated the Telemarketing Sales Rule (TSR) by aiding and facilitating illegal telemarketing campaigns. . The stipulated order, which was issued today by the U.S. District Court for the Central District of California, prohibits XCast from violating the TSR and has additional provisions to ensure compliance, including required processes to vet its customers and the calls you transmit to identify possible illegal telemarketing. The order also imposes a $10 million civil penalty judgment, which is stayed due to XCast's inability to pay.

According to the complaint filed on May 12, XCast provided VoIP services that transmitted billions of illegal robocalls to American consumers, including fraudulent calls claiming to be from government agencies. Those robocalls delivered prerecorded marketing messages, and many of them were delivered to numbers listed on the National Do Not Call Registry. Additionally, many of the calls failed to truthfully identify the seller of the services being marketed, falsely claimed affiliations with government entities, contained other false or misleading statements intended to induce purchases, or were transmitted with "spoofed" caller identification information. The complaint alleged that XCast continued to broadcast these calls even after being alerted to their illegality.

"Today's order is another example of the Department of Justice's efforts to protect American consumers from illegal robocalls and prevent telecommunications providers from allowing such calls," said Principal Deputy Attorney General Brian M. Boynton, Chief of the Civil Division of the Department of Justice. "We will continue to work with the Federal Trade Commission to enforce the Telemarketing Sales Rule."

"XCast was warned several times that illegal parties were using its services and they did nothing," said Director Samuel Levine of the FTC's Bureau of Consumer Protection. "Companies that turn a blind eye to illegal robocalls should expect to hear from the FTC."

Attorneys from the Civil Division's Consumer Protection Division, including trial attorney Zachary Dietert and Deputy Director Rachael Doud, along with staff from the FTC's Marketing Practices Division, handled the case.

For more information about the Consumer Protection Branch and its law enforcement efforts, visit www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit www.FTC.gov.