LA Company Accused Of Transmitting Billions Of Illegal Robocalls; Settlement Reached

LOS ANGELES — Los Angeles-based XCast Labs, which facilitates customer calls via voice over internet protocol, agreed to a court order resolving allegations that it assisted illegal telemarketing campaigns, federal authorities said Tuesday.

XCast was accused of breaking the Telemarketing Sales Rule and will be required to follow screening processes for potential illegal telemarking among its customers and the calls it transmits, according to the U.S. Department of Justice. A $10 million penalty was suspended based on the company’s inability to pay, the department said.

XCast transmitted billions of illegal robocalls, according to federal authorities, adding many went to numbers on the National Do Not Call Registry, contained false or misleading statements, or were spoofed to display a number the caller did not have legal authority to use.

Many of the calls were part of campaigns to generate telemarking leads by impersonating officials from the Social Security Administration, according to the Federal Trade Commission.

“XCast was warned several times that illegal robocallers were using its services and did nothing,” Director Samuel Levine of the commission’s Bureau of Consumer Protection said in a news release. “Companies that turn a blind eye to illegal robocalling should expect to hear from the FTC.”

The settlement was reached after XCast brought counterclaims against the commission, according to the company, which said it was a Federal Communications Commission-regulated carrier and not a telemarketer and that it took issue with the Federal Trade Commission's news release.

“Their comments violate the spirit of the settlement, which was that XCAST LABS did
not admit to any violations, but agreed to not do what it was already not doing to avoid a costly
and protracted defense,” XCast said in a prepared statement.