Just a fascinating one for you.
So a couple years back basically all 50 states–Alaska and South Dakota did not originally sue, but the FCC and the AG for DC did, and then South Dakota did eventually– sued a guy named Michael D. Lansky and a lady named Stacey S. Reeves of Avid Telecom in an absolutely extraordinary lawsuit.
The complaint between December 2018 and January 2023, Avid Telecom transmitted over 24.5 billion illegal robocalls, with more than 7.5 billion directed to numbers on the National Do Not Call Registry.
The complaint sought damages in an incalculable amount given the crisscrossing remedies and multiple state law claims asserted but assuming a minimal recovery of $10,000 per call (some calls were apparently carrying penalties over $100k per call as they allegedly violated multiple TSR and TCPA and state law sections simultaneously) we are looking at a lawsuit seeking hundreds of trillions of dollars in penalties.
What the heck did these guys do so wrong to potentially owe a sum exceeding twice the global GDP?
Well allegedly they knowingly allowed illegal robocallers on their network.
That’s it. That’s the crime.
And those of you trying to make large-volume outbound calls should understand why carriers are so cautious in light of these action.
Now the complaint makes clear Avid did more than just provide network access– it provided bulk DIDs and also supplied lead lists to callers.
That last part is what really got them in trouble.
Also look at these alleged calling metrics:
Between January 1, 2019, and November 3, 2022, Avid Telecom
routed to its downstream customer All Access Telecom more than
4.52 billion calls—an average of over 3.2 million calls per day
transmitted to this provider alone—that were placed to over 685.7
million phone numbers across the country. More than 474.8 million
different Caller ID or DID numbers were used to place those calls,
over 72% of which were used to make just one telephone call. Among
these calling numbers, over 58% matched the call recipient’s area
code, with a small percentage of that matching both the area code and
local exchange. Of the 27% of these 4.52 billion calls that were
actually answered, the average call duration was only 16 seconds
Wow.
Plus a lot of the calls Avid carried were allegedly pure scam calls. Stuff like this:
Dear customer. Thank you for your purchase on Amazon
shopping. This call is to inform you that your purchase for
Apple Mac Book Pro will be delivered shortly and amount of
$1,539 will be debited from your account for this purchase. If
you authorize these charges, no action required, and if you did
not authorize this charge press one to speak to Amazon
customer support.
Not good.
Making matter worse, enforcement actions were taken against its customers resulting in hundreds of millions of dollars in fines.
But the most concerning part for many in the lead generation space if many of the calls originated from multi-vertical form websites and the AGs presented these “consent farm” websites to the court in furtherance of the claims against the carrier.
In essence, the argument goes like this: ITG issues tracebacks advising of illegal calls. Avid responded to these tickets with consent records that it knew or should have known was illegal. So it (the carrier) should have stopped further calls by those clients. Failing to do so constituted a knowing acceptance of illegal traffic.
Hmmm.
Should be noted that no court has actually found forms like the ones the AGs point to to be illegal. But we move on.
Despite the massive scale of the case it hasn’t really gotten very far.
The parties are still squabbling over discovery. One motion to dismiss was denied but the individual defendants are attempting to bring another one aimed at removing themselves from the case individually (we will see how that goes). And it looks like this case will be bogging down the resources of all 50 states (except Alaska) for the foreseeable future.
Will keep an eye on it (a very slowly moving eye.)
Complaint here: Avid Complaint
Take aways here:
- Carriers need to be monitoring traffic, knowing their customers and taking decisive action in response to ITF tickets or knowledge of illegal calls;
- Callers need to be aware of additional pressure on carriers and expect ongoing deliverability issues;
- Lead generators and buyers need to be aware of ongoing state and federal scrutiny of multi-vertical lead gen forms and forms with high numbers of marketing partners;
- Get yourself good telecom lawyers– like Troutman Amin, LLP– if you want to survive in this space!
Chat soon.
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You know, if you charged $1 trillion to solve their problem , but you got them out of that lawsuit, it would have been a trillion dollars well spent!
Assume that a judgment were to be issued. The defendants will merely file Chapter 7 this afternoon, and open up their call center tomorrow morning with a new name sign taped over the old one on the door. When the Czar gets to Congress, perhaps you can propose legislation that puts telemarketers like this in prison for life.