DOJ Sues VoIP Provider XCast for Transmitting 'Billions' of Illegal Robocalls

Since 2018, VoIP provider XCast transmitted “billions” of illegal robocalls that sellers and telemarketers placed to American consumers in violation of the Telemarketing Sales Rule (TSR), alleged a complaint Friday (docket 2:23-cv-03646) in U.S. District Court for Central California in Los Angeles.

Many of the illegal robocalls XCast transmitted were “fraudulent telemarketing scams,” said plaintiff DOJ, saying some claimed false affiliation with government entities such as the Social Security Administration or a utility service threatening to cut off service until a payment is received. XCast call data records (CDRs) XCast produced to the FTC for three of its customers showed nearly 2 billion calls were placed to numbers on the national DNC registry, it said.

XCast’s CDRs are “rife with massive volumes of very short-duration calls,” the complaint said, saying CDRs the company produced for the FTC show a duration of only about 6.5 seconds and most lasting for under 10 seconds. Since December 2018, USTelecom’s Industry Traceback Group (ITG), has notified XCast that it routed and transmitted suspected illegal robocall traffic on behalf of upstream carriers or end users. ITG notified XCast of the suspected illegal calls through traceback requests to identify the source of the suspicious traffic, the complaint said.

ITG sent XCast over 100 traceback requests in 2020 and more than 90 in 2021. For dozens of them, XCast was either the originator of the suspected robocall or the point-of-entry from a foreign service provider, the complaint said. Many of the requests ITG sent XCast noted the calls at issue were “perpetrating fraud" by impersonating federal officials, threatening to cut off utilities and using corporate names without permission, it said. Other problems noted were use of pre-recorded messages, failure to identify caller or seller and spoofed ID information, it said.

Law enforcement put XCast on notice about numerous red flags for its provision of VoIP services to purveyors of unlawful robocalls, the complaint said. In August 2019, XCast received a subpoena from federal prosecutors for information and call records for its customer e-Sampark, a VoIP provider in India that was subsequently indicted for conspiracy to commit wire fraud in a robocall scheme. In January 2021, XCast received a civil investigative demand from the FTC requesting information about customers Dialcom, a California-based telecom provider, and RSCom, a Canadian telecom provider, informing XCast about potential TSR violations.

Despite a Jan. 29, 2020, FTC warning about facilitating illegal telemarketing or robocalling, and potential lawsuits it had brought against other VoIP providers, XCast “continued to transmit hundreds of millions” of illegal telemarketing calls to U.S. consumers, said the complaint.

XCast received direct notice that its services were transmitting robocalls and calls to numbers on the DNC registry, the complaint said. Based on the massive volume of such calls, their short duration, and their often fraudulent nature, “it should also have been clear to XCast that it was transmitting robocalls for which the sellers and telemarketers could not demonstrate, as the TSR requires, that they had obtained an express agreement from each call’s recipient to receive pre-recorded calls from those marketers," it said. The same factors should have also made it clear that XCast was transmitting calls to phone numbers on the DNC registry belonging to consumers for whom the telemarketer could not demonstrate having obtained an express agreement, or having an established business relationship, it said.

The suit alleges XCast assisted and facilitated violation of the TSR and seeks a permanent injunction against future violations, civil penalties of $50,120 for every violation of the TSR assessed after Jan. 11, 2023, and further relief deemed just and proper by the court.