Reported by Kevin G. Rupy, Kathleen E. Scott, Kelly Laughlin, and Stephen J. Conley

On February 4, 2025, the Federal Communications Commission (FCC or Commission) released a Notice of Apparent Liability for Forfeiture (NAL) against voice service provider Telnyx LLC (Telnyx) for alleged violations of the FCC’s know-your-customer (KYC) requirements related to allegedly fraudulent robocalls originated from Telnyx’s network. In a bipartisan, first-of-its kind enforcement action claiming violations of the FCC’s KYC rules, the agency proposed a penalty of nearly $4.5 million. Although the NAL received bipartisan support, Commissioner Simington dissented, stating that he believes the U.S. Supreme Court’s Jarkesy decision prevents him from voting “to approve this or any item purporting to impose a fine.”

Calls at Issue Claimed to Be From Non-Existent FCC “Fraud Prevention Team”

The NAL explains that on February 6 and February 7, 2024, over a dozen FCC staff and some of their family members reported receiving fraudulent calls on their personal and work telephone numbers. The artificial and prerecorded voice messages received by recipients stated that the caller was with the FCC’s “Fraud Prevention Team.” The NAL notes that no such team exists, and alleges that the “purpose of the calls appears to have been to threaten, intimidate, and defraud.” One call recipient reported that when they pressed ‘1’ to speak with a live caller, the individual demanded that the call recipient pay the FCC $1,000 in Google gift cards to avoid jail time for their “crimes against the state.”

Overview of the FCC’s KYC Requirements

The Commission’s rules require a voice service provider to “[t]ake affirmative, effective measures to prevent new and renewing customers from using its network to originate illegal calls, including knowing its customers and exercising due diligence in ensuring that its services are not used to originate illegal traffic.”^[1] While the Commission does not mandate specific actions to comply with this rule, the NAL explains voice service providers can “contribute” to compliance by obtaining records to verify the customer’s identify. The NAL further highlights that additional KYC measures are needed when a prospective customer is applying to use services that will allow for the origination of a high volume of calls.

[1] 47 CFR § 64.1200(n)(4).

Read full report: https://www.wiley.law/alert-FCC-Proposes-First-of-its-Kind-4-5-Million-Penalty-on-Voice-Provider-for-Alleged-Know-Your-Customer-Failures