For foes of robocalls, there came a bit of poetic justice in recent weeks, courtesy of John Oliver, host of the weekly HBO comedy-news program “Last Week Tonight.”
The comedian, fed up with what he viewed as the Federal Communication Commission’s inability to crackdown on those automated phone calls — including those made on behalf of financial institutions to collect consumer debt — got his revenge via a simple software program that targeted FCC commissioners with robocalls.
Oliver was on to something.
News emerged Thursday (March 28) that when it comes to robocalls, the punishment does not seem to fit the deed, underscoring the frustration that the HBO personality tapped into. The news also underscores the vast gap that often exists between regulatory intention and regulatory practice — always a hot issue in the world of payments and commerce.
Here’s the skinny, courtesy of the Wall Street Journal: Since 2015, the FCC has levied $208.4 million in fines for violations of the Telephone Consumer Protection Act, which covers robocalling and other related activities — but federal authorities have managed to collect only $6,790 worth of penalties.
For those of you with a fondness for percentages, that comes to 0.0032 percent. (For those of you with a fondness for oppressively useless trivia, that’s the approximate percentage of nitric nitrogen in a fertilized beet as described in an agricultural text from the early 20th century.)
Anyway, the reason for that rather low collection rate can be chalked up, it seems, to bureaucracy and the size of the robocall offenders, at least going by the WSJ article. “An FCC spokesman said his agency lacks the authority to enforce the forfeiture orders it issues and has passed all unpaid penalties to the Justice Department, which has the power to collect the fines,” the article says. “Many of the spoofers and robocallers the agency tries to punish are individuals and small operations, he added, which means they are at times unable to pay the full penalties.”
There does exist a brighter part of this story, though — at least for foes of robocalls.
The FCC, according to the newspaper story, has since 2004 collected some $121 million in penalties for robocalls and other prohibited telemarketing behaviors. That’s out of $1.5 billion the federal agency “secured” via fines and court judgements — or about 8 percent. “That number stands on its own. We’re proud of it; we think our enforcement program is pretty strong,” Ian Barlow, coordinator of the agency’s Do Not Call program, told the newspaper.
Pointing out relatively puny fines — or the lackluster collection of penalties — is basically a sport these days, as predictable and exciting, perhaps, as watching a batter adjust his batting gloves. But it matters, as such stories often speak to the frustration and distrust that some consumers have when it comes to marketing and associated parts of the payments and commerce world — frustrations and distrust that can easily be transferred by some consumers to other service providers who happen to be innocent and above-board when it comes to regulatory compliance. Not only that, but it doesn’t always take much to soil the credibility of regulators.
That said, it’s been a busy time when it comes to fines and penalties — especially when one looks beyond U.S. shores. Takes news from earlier in March that the Netherlands, via the Dutch Data Protection Authority (DDPA), has released its own General Data Protection Regulation (GDPR) fining policy — the first European Union (EU) country to do so. The GDPR stipulates that the maximum fine levied against a company can be 4 percent of its global revenue or €20 million, whichever is higher. However, it did not lay out rules for how to determine an exact fine or provide any scale.
As it turns out, the DDPA came up with four categories of fines, and gave a few different examples based on the size of the company and the maximum possible fine. If a company’s maximum fine is €10 million, then a category 1 fine would be between €0 and €200,000; category 2 would be €120,000 to €500,000; category 3 would be €300,000 to €750,000 and category 4 would be €450,000 to €1 million. A fine higher than category 4 would only be issued if the maximum is not appropriate.
Fines are a fact of life even though collection attempts vary widely in execution. The FCC news is another example of where more consumer frustration can originate.