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May 24, 2023

Pennsylvania, New Jersey sue company accused of facilitating billions of spam calls

Avid Telecom is being sued by 48 states for allegedly enabling calls to Americans on the National Do Not Call Registry

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Robocall Lawsuit Lindsey LaMont/Unsplash

Attorneys general from Pennsylvania, New Jersey and 46 other states filed a lawsuit against Avid Telecom for alleging facilitating 7.5 billion illegal robocalls to phone numbers on the National Do Not Call Registry.

A company that sells phone numbers and dialing software to help its customers make mass robocalls is being sued by the top prosecutors from 48 states, including Pennsylvania and New Jersey, for allegedly facilitating 7.5 billion calls to phone numbers listed on the National Do Not Call Registry. 

The lawsuit filed against Avid Telecom alleges the Arizona-based company violated consumer protection laws by facilitating the illegal phone calls, including 360 million in Pennsylvania and 237 million in New Jersey.

According to the suit, Avid Telecom facilitated more 24.7 billion phone calls in the United States between December 2018 and last January. More than 90% of those calls lasted less than 15 seconds, indicating that they were likely robocalls. Hundreds of millions of calls allegedly were made using spoofed or invalid caller ID numbers, including 8.4 million calls that appeared to be coming from law enforcement or governmental agencies.

State prosecutors allege these calls attempted to scam people out of their Social Security and Medicare benefits, convince them to purchase bogus auto warranties and collect personal information for fake employment opportunities. Other calls allegedly asked people to confirm fake purchases from Amazon and DirecTV or provide credit card information to resolve credit rate reduction calls. 

The Industry Traceback Group, which alerts phone providers to illegal robocalls being sent across their networks, sent 329 notifications to Avid Telecom, but the company chose not to take efforts to prevent scammers from contacting consumers and masquerading as government officials, the lawsuit claims. 

Not all robocalls are scams, but illegal robocalls are the most common contact method used by scammers, with consumers losing more than $692 million in 2021, the lawsuit states.

"Robocall scams are not just an annoyance, they are illegal — and they are used to take advantage of our most vulnerable populations," Pennsylvania Attorney General Michelle Henry said. "Pennsylvanians have made it clear that robocalls are not welcome here, and I am proud to stand with my colleague attorneys general to announce this important action in the fight against illegal robocalls." 

Avid Telecom uses voice over internet protocol technology to place millions of calls, often by using pre-recorded messages. The lawsuit claims this technology is particularly attractive to companies that place illegal robocalls because it allows them to make a massive amount of calls and more easily reach people vulnerable to scams. 

Scammers that utilized Avid Telecom's business spoofed their numbers and pretended to represent the Social Security Administration, Internal Revenue Service, FBI, U.S. Immigration and Customs Enforcement, U.S. Postal Service, New Jersey Court System, Comcast, Wells Fargo, Visa and Apple, the lawsuit claims. 

"Unsolicited phone calls are not only annoying, but they are also tools that scammers use to commit fraud," said Cari Fais, acting director of the New Jersey Division of Consumer Affairs. "Joining this complaint shows our commitment to protecting New Jersey residents from unwanted calls and scams." 

State prosecutors are seeking a court order requiring Avid Telecom to temporarily cease its operations, restitution to the people impacted by scams, monetary damages and attorney's fees. Alaska and South Dakota are the only states that have not joined the lawsuit, because the illegal robocalls allegedly facilitated by Avid Telecom did not impact their residents. 

Earlier this month, New Jersey Gov. Phil Murphy signed the state's so-called "Seinfeld bill" into law. It requires telemarketers to identify themselves and their employers, and to provide certain contact information, within the first 30 seconds of unsolicited phone calls. The law, named after a famous "Seinfeld" scene, is aimed at increasing transparency among telemarketers and protecting residents from scammers. 

In 2019, Pennsylvania enacted similar measures, requiring companies to allow consumers to opt out of unwanted calls, allowing businesses to join the Do Not Call Registry and prohibiting robocalls on legal holidays, according to the Contact Compliance Center

The lawsuit against Avid Telecom was spearheaded by the Anti-Robocall Mitigation Task Force, a nationwide initiative tasked with investigating and suing companies responsible for significant amounts of illegal robocalls. The FTC and Social Security Administration assisted in the prior investigation, according to New Jersey Attorney General Matthew Platkin.