Be Cautious of the Honeypot or You Might Get Stung

Before a phone number can be assigned and given to a consumer, telephone carriers test the number to see if it receives a large amount of phone calls.  Because consumers do not want a new phone number that receives numerous unsolicited calls, the numbers receiving large amounts of calls are taken off the market and deemed “dirty” or “abandoned.”  

Interestingly, Telephone Science Corporation (“TSC”), which operates a free, for-profit, call-blocking service called Nomorobo, has reportedly purchased hundreds of thousands of these “dirty” numbers from various telephone carriers.

TSC describes this collection of dirty numbers as “honeypots” because they attract a significant amount of unsolicited, telemarketing calls.  When telemarketers call these abandoned numbers, they inadvertently allow TSC to put the received telemarketing number into its ever-growing internal database.  TSC is then able to keep track of the amount of times a telemarketer makes an unsolicited call to a TSC-purchased “dirty” number with an internally-developed algorithm.  

TSC uses this information to assert violations of the Telephone Consumer Protection Act (“TCPA”) against the telemarketers making these calls.

Since 2014, TSC has alleged TCPA violations against five different companies.
TSC generally claims that defendants made numerous illegal calls to a portion of TSC’s honeypot-numbers, and often requests tens of millions of dollars for these alleged violations. 

The TCPA bans making any call using any automatic telephone dialing system (“ATDS”) to any telephone number assigned to a cellular telephone service without the prior express consent of the called party.  The TCPA allows recipients of those calls to sue for penalties of $500 to $1500 per call, even if there is no actual harm caused by the calls.

Here, TSC is actually financially benefitting from receiving these “unwanted” calls, as its database grows with each telemarketing call received, and is, therefore, able to strengthen its algorithm.

Defendants also generally argue that one of the TCPA’s purposes is to protect consumers from unwanted calls in their homes, not to protect companies that buy black-listed numbers, luring telemarketing calls.

Aaron Foss, owner of TSC, developed Nomorobo after winning a Federal Trade Commission contest, which focused on ideas to block unsolicited telemarketing calls to consumers.  

Nomorobo uses a “simultaneous ringing” system.  Simultaneous ringing allows any incoming call going to a Nomorobo-subscriber’s phone to also ring to a Nomorobo phone number at the same time.  After a while, Nomorobo gathered enough calls, or numbers, to use its own software system to decipher which calls going to its Nomorobo phone numbers were telemarketing and which were not.  The software system is then able to prohibit, or “blacklist,” the robo-call numbers that call the subscriber in the future, and, accept, or “whitelist,” incoming numbers it thinks allowable to let fully ring to the subscriber’s number.

Reportedly, Foss claims to fund Nomorobo with donations and by selling its collected robo-call numbers to other telephone carriers, like Twilio and Ooma, who can then use the numbers for their own call-blocking systems.  Still, a database that quickly and exponentially increases in size, such as Nomorobo’s, would presumably require a substantial amount of money to properly maintain.* 

As always, telemarketers should be avoiding Nomorobo’s honeypots by complying with all TCPA regulations, or they might get stung.

*See Comments of CTIA – The Wireless Association, § II(A), p. 9 (Jan. 23, 2015), available at http://apps.fcc.gov/ecfs/document/view?id=60001016266