6.5 Seconds a Call, Two Billion Calls: The XCast Labs Robocall Case

6.5 seconds.

According to the government, that was the average length of nearly two billion calls XCast Labs carried to numbers on the National Do Not Call Registry. Six and a half seconds. That's not a sales conversation. That's a robocall.

So what happened?

On May 12, 2023, the Department of Justice (DOJ), on behalf of the Federal Trade Commission (FTC), sued XCast Labs, Inc., a Los Angeles Voice over Internet Protocol (VoIP) provider, in federal court in the Central District of California. Read the federal complaint against XCast Labs.

The complaint alleges:

• Since at least January 1, 2018, XCast transmitted "billions of illegal robocalls."
• Call records XCast gave the FTC for just three of its customers showed nearly two billion calls to numbers on the National Do Not Call Registry.
• USTelecom's Industry Traceback Group (ITG) sent XCast over 100 traceback requests in 2020 and over 90 more in 2021.
• Many of those requests said the calls were fraud. Some included audio of the prerecorded messages.
• On January 29, 2020, the FTC sent XCast a warning letter about assisting and facilitating illegal robocalls.

And this wasn't their first fight. In February 2022, at the FTC's request, a federal court in California ordered XCast to turn over information the FTC was seeking in its robocall investigation.

How it ended

On January 2, 2024, the FTC announced XCast agreed to settle. Under the order, XCast has to set up a screening process and end its relationships with firms that aren't complying with telemarketing laws. The order includes a $10,000,000 civil penalty judgment, which is suspended subject to the order's conditions. Read the XCast Labs stipulated order.

Here's the thing ... warnings pile up

Over 100 traceback requests in one year. Then 90 more. Then a warning letter from the FTC. At some point, "we didn't know" stops working. Am I right?

The Telemarketing Sales Rule (TSR) makes it illegal to substantially assist a telemarketer when you know, or "consciously avoid knowing," that it's breaking the rule. Every traceback is somebody telling you.

Why should you care?

If you run a VoIP platform, a dialer or a wholesale route, look at your own numbers. Average call duration. Do Not Call hit rates. Traceback count. These are exactly the stats the FTC pulled here.

And if you're a marketer, know this: your provider is going to start asking you hard questions. Have good answers.

What to do this week

• Pull your average call duration by customer. Super short calls at huge volume are a red flag.
• Count your tracebacks. Then fix whatever's causing them.
• Screen new customers before they send a single call.
• Cut off bad actors. Revenue from them isn't worth it.

It's simple math. Billions of bad calls equals a federal lawsuit.

Build it right, and you won't be the next headline. That's it.