FTC to “Rachel”: Shut Up, Already

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Score one for the feds in its ongoing cat-and-mouse game with robo-call telemarketers. The agency just shut down five companies in Arizona and Florida responsible for what it characterized as millions of calls from “Rachel” and her fraudulent friends at “Cardholder Services.” 

These robo-call scams pitched people lower credit card interest rates, but didn’t follow through. Victims forked over as much as $3,000, only to find that the companies just made the same calls to their credit card companies they could have made themselves, if they did anything at all. Although operators made the deal sound legit by promising a money-back guarantee, “consumers who later complain to the companies find it difficult, if not impossible, to get their money back,” the FTC says.

Credit card rate ripoffs are a common robo-call theme, but far from the only one. People get hit up by automatic messages promising lower mortgage rates, help with foreclosure, debt reduction and extended-warranty car insurance. It’s annoying at best and financially destructive at worst.

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The FTC’s action comes a couple of weeks after it held a daylong Robocall Summit that got together FTC staffers, digital security experts, academic researchers and phone company executives.

“By deceptively pitching phony products and services such as debt reduction programs and mortgage modification scams, these bottom feeders are not only disturbing our peace… but they are also stealing our money,” FTC chairman Jon Leibowitz said.

Participants learned what most of us on the receiving end of those “Rachel calls” have probably already figured out: there are more of them today. The FTC fields some 200,000 complaints about them every month. It’s gotten increasingly harder for law enforcement to track down the source of the robo-calls, since cheap VoIP long distance phone service lets even overseas crooks get in on the game, and “spoofing” software can mask the origin of a call.

In the old — that is, pre VoIP and cell phone days — there were a limited number of telecommunications companies that had the authority to assign a phone number, and they more or less knew who had which number. Fast-forward to today — think of it as the difference between a garage sale and eBay. There’s a much larger number of players that can give out a phone number, the process is more anonymous and may include middlemen that weren’t a part of the old, more straightforward way of doing things.

The Summit participants concluded that there’s no single solution to stamp out robo-calls, but they were very excited by the idea of a high-tech tool that would offer communications companies or law enforcement agencies a way to authenticate the calls and find out who that “Rachel” on the other end really is.

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Panelists talked about the challenge of finding a method that would let them see who’s making calls in a way that couldn’t be tricked by spoofing and wouldn’t encroach on people’s privacy or thwart legitimate uses of robo-calling (like a school sending out snow day alerts, for instance).

Think you have a bright idea for stopping illegal robo-calls? The FTC is dangling a $50,000 prize as part of its Robocall Challenge . “Develop a solution that will block illegal robocalls on landlines and/or mobile phones and can operate on a proprietary or non-proprietary device or platform. Entries can be proposed technical solutions or functional solutions and proofs of concept.

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SarahWalker
SarahWalker

"Score one for the feds?" regarding "Rachel" and Card Services??? I'm sorry, I don't agree.  "Rachel" has been calling my land line and cell nonstop  since last year. I don't know how many complaints I've made to the FTC and received NO reply or acknowledgement. Rather than "score one for the feds" it should be, "It's about time, what took you so long?" BTW, "Rachel" called me 11.7.12 at 4:15 pm........so, WTG, Feds, she is still calling me.