FCC Proposes $4.5MM Fine for Provider Failing to Vet Customers Before Transmitting Scam Calls Impersonating FCC

On February 4, the Federal Communications Commission proposed an enforcement action against Telnyx, a voice service provider, for transmitting scam calls on its network from new customer accounts, de facto evidence that Telnyx did not adequately conduct due diligence before transmitting calls from its new customers. The scam calls Telnyx transmitted purported to be from the FCC’s fraud prevention team—an entity that does not exist—and were received by hundreds of phone subscribers including the FCC’s own staff. The FCC proposed a fine of nearly $4.5 million against Telnyx.

Under FCC rules, voice service providers are obligated to implement a Know Your Customer (KYC) program and exercise due diligence about new customers before transmitting calls on behalf of those customers. Rather than prescribing specific methods for KYC and due diligence, the FCC gives providers flexibility to use whatever methods will be “affirmative” and “effective” at ensuring its services are not used to originate illegal calls.

The Commission noted that it could likely find that Telnyx violated the FCC’s rules with regards to every customer it onboarded—as Telnyx likely used the same process for all of its customers—but the Commission refrained from doing so at this point “absent further investigation.”

EPIC routinely participates in regulatory and legislative processes concerning robocalls and files amicus briefs in robocall cases.