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U.S. regulators have come to an agreement with XCast Labs on a proposed settlement regarding charges that the company enabled billions of illegal robocalls. The Federal Trade Commission (FTC) announced the settlement on Tuesday.
Reuters reported that XCast Labs must pay a $10 million civil penalty as part of the agreement, suspended based on its current financial situation.
Firm Consequences for Misrepresentation and Noncompliance
Under the settlement terms, XCast Labs must pay the penalty immediately if it misrepresents its financial condition, per KFGO. Additionally, the company must sever ties with firms failing to abide by telemarketing regulations.
The legal action taken against the Los Angeles-based telecommunications provider comes after multiple warnings from regulators regarding its involvement in contacting individuals on the National Do Not Call Registry and engaging in deceptive practices to encourage purchases or contributions.
FTC's Determination to Tackle Illegal Robocalling
Samuel Levine, the director of the FTC's Bureau of Consumer Protection, emphasized the agency's commitment to addressing illegal robocalling: "Companies that turn a blind eye to illegal robocalling should expect to hear from the FTC."
The FTC's press release was met with resistance from XCast Labs, claiming it violated the spirit of the settlement, as the company did not admit to any violations and sought to avoid a costly and protracted defense.
Brian Boynton, the U.S. Department of Justice's Civil Division Principal Deputy Assistant Attorney General, highlighted the significance of the order issued on Tuesday. It serves as evidence of the department's efforts to protect American consumers from illegal robocalls and to hold telecommunications providers accountable for enabling such calls.
Conditions for XCast Labs Outlined in Proposed Settlement
The proposed settlement, filed with the U.S. District Court for the Central District of California, imposes specific conditions on XCast Labs. According to the FTC, the company must implement a screening process and terminate its relationships with firms that fail to comply with U.S. telemarketing laws.
In a separate settlement with the FTC, Response Tree LLC, based in California, and its president, Derek Thomas Doherty, have been banned from making or assisting others in making robocalls or calls to phone numbers on the Do Not Call Registry. The FTC accused Response Tree of operating over 50 websites that deceived consumers into providing personal information for supposed mortgage refinancing loans and other services.
Photo: FTC Website
