Robocalls may be annoying, but not all are bad

Robocalls may be annoying, but not all are bad
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Last month, residents of Washington, D.C. received over 26 million automated pre-recorded phone calls, also known as robocalls; that is an average of 47 robocalls per person, almost 4 times the national average. The problem is so pervasive that Americans lost more than $10 billion last year thanks to fake charity appeals and bogus IRS tax delinquency notices, among other robocall scams.

While robocalls have built up a bad reputation especially among consumers, it is less obvious that 60 percent are in fact “legitimate” robocalls — such as the ones that come from pharmacies, schools, or weather alerts. Not distinguishing between the useful and legal robocalls and the annoying and illegal robocalls could cause major problems for consumers, businesses with legitimate uses for robocalls, and ultimately on how enforcement agencies and wireless providers deal with the issue.

The Federal Communications Commission (FCC) receives around 200,000 complaints each year about robocalls — by far the biggest consumer complaint that the agency has to deal with on a regular basis. As a result, FCC’s Chairman, Ajit Pai, has made battling this nuisance one of the commission’s top priorities. To address the problem, the FCC has recently proposed new measures that would enable mobile carriers to block robocalls. One such measure would let wireless carriers automatically block unwanted robocalls for their subscribers unless they opt out.

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But dealing with this issue is not as clear-cut as it might seem.

Take the case of the Telephone Consumer Protection Act (TCPA) originally enacted in 1991 to restrict telemarketing calls and the use of automatic telephone dialing systems and artificial or prerecorded voice messages. While TCPA applies to common carriers as well as to other marketers, it also restricts robocalling from credit unions, for example, preventing them from contacting their members about an overdraft or other critical financial information.

Scams and illegal robocall make up an estimated 40 percent of all robocalls. This means that more than half of the robocalls that consumers are being bombarded with, while they may be annoying to some, serve a legitimate purpose and deliver important information to consumers. Unfortunately, the increasing frequency in robocalls has made Americans wary of picking up their phones.

The robocall issue has become so bothersome that about 10 percent of legitimate telephone calls are blocked. This can have severe repercussions: It could cause us to miss a call reminding us about a doctor’s appointment, or we might miss a severe weather alert, or even a safety warning about an imminent danger.

As a result, the difficulty in combating the robocall problem lies in distinguishing useful and legal robocalls from illegal robocalls. Although we have some of the necessary technology and regulatory framework to block the most dreadful robocalls that put consumers at risk, the number of scam robocalls has not lessened in recent years. Among the contributing factors is that scammers are using more sophisticated approaches and new technologies to continue their predatory activities.

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Spoofing, where scammers trick a caller ID service into displaying that a call is coming from the recipient's area code, is one such strategy. The complicating element is when scammers spoof a legitimate number, thus making it look like the call is coming from your doctor, your bank, or someone on your contact list.

There is no doubt that robocalls are a growing issue that requires urgent scalable solutions. And while recent federal enforcement actions and sizeable fines have put a dent in some of the illegal robocall activities, many of the perpetrators hide in foreign countries and beyond the reach of U.S. law enforcement. The need for more precise and sophisticated solutions from enforcement agencies, mobile carriers, and consumers is critical.

But, as we go through workable solutions, we need to be more surgical in how we address the problem. Although robocalls may be so irritating that it makes us choose not to answer phone numbers we don’t recognize, not all scams are masked as robocalls. There are legitimate notifications that deliver important information about your bank account, lab test results, weather alerts, and even more serious safety-related info.

Dr. Krisztina Pusok is the Director of Policy and Research at the American Consumer Institute (@consumerpal), a nonprofit educational and research organization. She previously served as a research associate at Reason Foundation. She has a Ph.D. in political science from the University of Missouri, as well as a masters degree in international security studies from University of St. Andrews in the U.K. and a bachelors in international relations and international business from Webster University in Vienna, Austria.