FCC Fines VOIP Service Provider for Enabling Scam Call Operation

If you’re considering starting a scam call operation, there’s one thing you should try to avoid: calling the people you’re posing as. Unfortunately, two imposters who claimed to be members of the FCC’s Fraud Prevention Team ended up calling FCC staff members, leading to a $4.5 million fine.

How the Scam Call Operation Went Down

According to the FCC, two individuals, "Christian Mitchell" and "Henry Walker," registered accounts with Telnyx, a VOIP service provider based in Texas. Despite their IP addresses indicating they were in Scotland and England, and their email addresses registered to the domain mariocop123.com, Telnyx allowed them to register accounts anyway. The two scammers used these accounts to launch a short-lived spam call campaign, placing 1,797 imposter calls claiming to be from the Federal Communications Commission’s Fraud Prevention Team.

The Scammers’ Tactics

Most of the callers left a prerecorded voicemail, while a few unfortunate souls who picked up were subjected to threats, intimidation, and defrauding. One victim reported being told to pay $1,000 in Google gift cards to avoid jail time for "crimes against the state." Some of the calls managed to hit the phones of FCC staff members and their families, although the agency is still unsure how this happened.

The Consequences

The FCC’s investigation revealed that Telnyx failed to comply with Know Your Customer rules, which are designed to prevent malicious actors from using these networks. The VOIP firm only collected a name, email address, physical address, and IP address from the applicants, without a verification process to confirm the information. This lack of verification allowed the scammers to operate, and now Telnyx is facing a $4.5 million fine.

Telnyx’s Response

Telnyx denies that it failed to meet the FCC’s standards, stating that it has "done everything and more than the FCC has required for Know-Your-Customer (‘KYC’) and customer due diligence procedures." However, the FCC proposes a $4,492,500 fine against Telnyx for the whole fiasco.