The illegal robocalling industry can be seen as two pieces: Primary players and secondary players. Primary player are entrepreneurial owners who knowingly create scams and “near scams” to defraud consumers via robocalling and robofaxing as crucial steps to obtain money, demographic information and confirm data for future schemes. To significantly reduce illegal robocalling, the primary players are the prime target because they are the driving source. (This plan will use “robo” when both robocall and robofax are being discussed.)
A successful but illegal business has a business plan, which can be described in business terms and measured by business standards. Robo plans can be detected by studying several variations of robocall and robofax schemes. Both are parts of a growth industry that exploits new technologies, utilizes the opportunities globalization offers for avoiding prosecution, uses high-speed transaction dispersal and understands how to manipulate and minimize outdated enforcement systems. Since illegal robo calls and faxes go to great lengths to avoid disclosure of how their businesses run, there is a high probability that the income tax reports of primary owners omit full or any disclosure of profitability. (Tactic 4 will address that concern.)
Robocalling, whether legit or illegit, is a capital-intensive business. In addition to the standard industry costs of upfront investment needed for the development and implementation of advanced robocall technologies, the illegit group needs expert legal advice in crafting scripts, offers and defenses; frequently relocates to many states to avoid local prosecution by any one state; uses of electronic transmission of money to “get the cash” before detection of fraud; and—if ordered to court—pays of legal expenses and penalties if convicted. (Robos have been known to not show up in court and simply pay the fines.) The illegit return on investment (ROE) can be presumed to be high because of the growing proliferation of robo calls and faxes.
The secondary players are a mix of service providers who may be operating legal businesses. They either not know who they are working for or choose not to ask probing questions of primary robo callers who seek robocalling facilities, live operators in telemarketing centers, website designers, programmers with sophisticated programming skills and credit card processers who handle transactions.
My proposal is for the FTC to adopt a strategic package of seven tactics whose combined goal would significantly reduce the profitability of the primary players in the “Robo Industrial Complex.” Only the FTC has the authority and means to detect and defeat robo calls by attacking the primary players’ bottom lines.