When is consent to receive robocalls not consent to receive robocalls? When it was obtained by misleading the people who gave their consent. A great deal of fuss has been made by US authorities about the need to close the ‘lead generator loophole’, the unscrupulous business practice of manipulating members of the public into giving blanket consent for every variety of robocall in order to render telemarketing rules impotent. The US Department of Justice announced it has reached a settlement with Response Tree LLC, whose business model involved…
…operating over 50 websites that deceptively induced consumers to disclose personal information by, for example, purporting to provide mortgage refinancing services. According to the complaint, the defendants then sold the consumer data to sellers of goods and services who then inundated American consumers with illegal robocalls based on the consumers’ invalid consent. Those robocalls delivered prerecorded marketing messages, and many of them were delivered to numbers listed on the National Do Not Call Registry.
However, regular readers of Commsrisk already know what penalty the DOJ extracted from Response Tree, and why it will differ from the figure that will be highlighted by docile journalists.
The order also imposes a $7 million civil penalty judgment, which is suspended based on the defendants’ inability to pay.
The remainder of the settlement involves Response Tree LLC promising not to break the law again — as redundant a legal victory as it is possible to imagine — or to collect any lead generation information in future. Response Tree boss Derek Thomas Doherty also has to obey the same strictures.
The US approach to managing consent for telesales is a marvel of muddled thinking. Centralized consumer protection authorities are trying to police a completely decentralized system, and they intend to do it without the deterrence of imposing any actual punishments on lawbreakers. Illegal telesales occur because there are rules that forbid calling members of the public without their consent, but the people making the calls ignore those rules because they are motivated by profit. So why is there never a prosecution of a business that made enough profit to pay an actual fine? Stupid multi-million dollar fines are always suspended in their entirety, because the US seems to lack a single prosector with the grit required to insist on the actual payment of even a tiny fraction of the notional penalties they feed to the press.
Meanwhile, India is in the late stages of adopting a much more rational mechanism for managing consent to telesales calls and messages. Indian telcos must follow a common standard to what is known as “Digital Consent Acquisition”, a process for funneling requests for consent from telesales businesses to phone users who may accept or reject these requests. This gives customers the absolute right to stipulate which telesales calls and text messages they will receive; all others must be automatically blocked by the telco. The customer’s consent is communicated using one of several channels managed by their telco; these channels must include voice calls, SMS messages, an app on their phone or the telco’s website. Once captured by the telco, that customer’s wishes are then recorded using the distributed ledger technology that India has progressively extended over several years’ evolution of their anti-spam strategy. So instead of trusting businesses to do the right thing, leading to the time-consuming burden of gathering evidence whenever wrongdoing occurs, it becomes trivial to verify when somebody received an unauthorized call or message from a telemarketing business.
The irony is that the US authorities are addicted to the pursuit of miracle technologies to tackle unwanted calls because their legal system is so broken, but cultural and political inhibitions prevent them from adopting distributed ledger technology as a means to decisively shift the balance of power in favor of consumers. The unspoken fear is that a national register of telemarketing consent backed by automatic blocking could be so popular with the public that it would decimate businesses that need to routinely pester customers and potential customers in order to remain profitable.
