The VoIP service provider XCast was accused by the U.S. Department of Justice (DoJ) of facilitating unlawful telemarketing activities from at least January 2018, in violation of the Telemarketing Sales Rule (TSR). The DoJ and XCast announced a settlement on Tuesday.

The stated order forbids the corporation from breaking the law and imposes additional compliance requirements on it, such as creating a procedure for consumer screening and reporting any suspected illegal telemarketing. Because XCast is unable to pay, the order, which also carries a $10 million civil penalty judgment, has been suspended.

The DoJ stated in a Press Release that "XCast provided VoIP services that transmitted billions of illegal robocalls to American consumers, including scam calls fraudulently claiming to be from government agencies."

Prerecorded marketing messages were played during these calls; the majority of the lines were registered with the National Do Not Call Registry. To make matters worse, most of the calls included outright inaccurate or misleading information or made fraudulent claims that they were associated with official agencies in an effort to trick victims into making purchases.

Some of the calls, for example, purported to be from the Social Security Administration and threatened to suspend the recipient's utility service if payments were not paid right away. In other instances, customers were advised to take quick action to stop fraudulent credit card transactions.

As a condition of the proposed settlement, XCast is required to sever links with companies that violate US telemarketing regulations. The Federal Trade Commission (FTC) of the United States said in a statement that the Los Angeles-based business ignored repeated warnings that illicit robocalls were utilizing its services.

The FTC said, "The order permanently bars XCast Labs from providing VoIP services to any company with which it does not have an automated procedure to block calls that display invalid Caller ID phone numbers or that are not authenticated through the FCC's STIR/SHAKEN Authentication Framework."

This development coincides with the FTC's announcement that Response Tree will no longer be allowed to make robocalls or assist others in making calls to numbers listed on the Do Not Call Registry. The Californian company was accused in the complaint of running over fifty websites, including PatriotRefi[.]com, AbodeDefense[.]com, and TheRetailRewards[.]com, and using manipulative dark patterns to "trick consumers into providing their personal information for supposed mortgage refinancing loans and other services."

Subsequently, it is alleged that the defendants sold the gathered data of hundreds of thousands of customers to telemarketers, who then utilized it to make millions of unlawful telemarketing calls—including robocalls—to customers all over the nation.