FCC Proposes $4.5 Million Fine for Telnyx Over Robocalls

The Federal Communications Commission (FCC) has proposed a $4.5 million fine against Telnyx LLC following an investigation into robocalls that originated on its network. The FCC alleges that these calls, some of which targeted FCC staff and their families, involved individuals impersonating a fictitious "FCC Fraud Prevention Team."

Allegations against Telnyx

The FCC's Enforcement Bureau claims Telnyx failed to adequately verify the identity of its customer who placed the robocalls. This failure, according to the FCC, violates the "Know Your Customer" rules which require voice service providers to take steps to prevent their networks from being used for illegal activities. The FCC contends that by not properly vetting its customers, Telnyx allowed malicious actors to make illegal calls, potentially harming the public.

Details of the robocalls

The scam robocalls in question reportedly transmitted a pre-recorded message claiming to be from the FCC's "Fraud Prevention Team." Recipients were instructed to press a number to speak with a representative or schedule a callback. Some individuals who engaged further reported being threatened and asked to pay money via gift cards to avoid legal consequences. As stated by the FCC "One recipient of an imposter call reported that they were ultimately connected to someone who 'demand[ed] that [they] pay the FCC $1000 in Google gift cards to avoid jail time for [their] crimes against the state.'"

Telnyx's defense 

Telnyx has appealed the proposed fine, stating that it acted responsibly and managed to stop the robocalls as soon as it was alerted. The company says it blocked the robocalls in a matter of hours. 

However, as TCPA Attorney Eric Troutman notes about the FCC’s position, "Being unable to determine who the real bad guys were, they took out their fury upon the carrier that apparently permitted the calls to get connected – Telnyx LLC. In the FCC’s words, the company failed 'to take affirmative, effective measures to prevent malicious actors from using its network to originate illegal voice traffic.'"

Importance of "Know Your Customer" (KYC)

The FCC emphasizes that "providers are required to know their customers and secure their networks to deter fraudulent and malicious calls." This case highlights the ongoing efforts of the FCC to combat illegal robocalls and hold providers accountable for compliance with KYC requirements. The action against Telnyx underscores the FCC's view that originating providers are "best positioned to prevent illegal calls by stopping them before they begin."

Telnyx's opportunity to respond

This action is a Notice of Apparent Liability for Forfeiture (NAL), which is not a final decision. Telnyx has the opportunity to respond to the FCC's allegations and present evidence in its defense. The Commission will then review Telnyx's submission before taking further action. The FCC may not impose a penalty greater than the amount proposed in the NAL.

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