Fraudsters Pretending to be FCC Fraud Squad Lured by FCC and Fined
In a significant move, the Federal Communications Commission (FCC) has announced that it is coming down hard on Telnyx for failing to comply with Know Your Customer (KYC) rules. The telecommunications company, based in Texas, is facing a potential fine of over $4.5 million for enabling a spam call operation that targeted thousands of individuals, including FCC staff members and their families.
The spam calls, which claimed to be coming from the Federal Communications Commission's Fraud Prevention Team, were a deceptive ploy aimed at threatening, intimidating, and defrauding those who answered. The calls, totaling 1,797, resulted in prerecorded voicemails for most recipients.
The FCC's investigation found that Telnyx only collected a name, email address, physical address, and IP address from applicants, with no verification process in place. This lax approach allowed two imposters to register accounts with Telnyx and pose as members of the non-existent FCC "Fraud Prevention Team."
The imposters, who claimed addresses in Toronto, Canada, were in fact operating from Scotland and England, as indicated by their IP addresses. One victim reported that the fraudsters demanded $1,000 in Google gift cards to avoid jail time for "crimes against the state."
Telnyx, however, denies failing to live up to the FCC's standards. The company's director involved in the spam call campaign scandal is John Hunter. The imposters used their registered accounts to launch a spam call campaign over two days in February 2024.
The fine proposed by the FCC is significantly higher than the earlier mentioned $4.5 million. The exact amount is yet to be disclosed, but it is expected to be one of the largest fines ever levied against a VOIP service provider for violating KYC rules.
It is worth noting that the FCC's directorate does not publish or share staff personal phone numbers. Therefore, it is highly unlikely that any FCC staff members received these calls directly.
Telnyx has stated that it has "done everything and more than the FCC has required for Know-Your-Customer ('KYC') and customer due diligence procedures." The company has yet to comment further on the matter.
This incident serves as a stark reminder for all telecommunications companies to uphold their KYC obligations and maintain strict customer due diligence procedures to prevent such fraudulent activities. The FCC's action against Telnyx is a clear indication that it will not tolerate non-compliance with these rules.
