FCC and TripAdvisor Take Down the Robocall King

[00:00:00] Will: This week on AARP - The Perfect Scam.

[00:00:03] There are very few things that, in America that everyone can align on, but I think one is, we all hate robocalls. Every one of us.

[00:00:11] Will: Welcome back to AARP - The Perfect Scam. I'm your host, Will Johnson. Joined as always by AARP's Fraud Watch Network Ambassador, Frank Abagnale. Great to have you back on again.

[00:00:20] Frank Abagnale: Great to be back.

[00:00:21] Will: So, Frank, I'm talking about robocalls. The illegal ones. We all get them, and, and they seem to come in waves. Sometimes you hear about them in the news, and I feel like I'll get you know, a week will go by where I don't get any, and then I'll have a few days where a bunch are coming in, and then I'll hear something in the news like robocalls are on an upswing.

[00:00:38] Frank Abagnale: Yeah, absolutely, 'cause people have probably read within the last few months that they say now that 50% of all robocalls are scams, and it's probably more than that. Uh, you know, I've been doing this for 43 years, lecturing about scams, writing books about scams, articles about scams. And what I've noticed, you know, when I started talking about scams 40 plus years ago, scams were committed by writing letters, so there was a Nigerian letter; they sent out thousands of letters. The stamps on the letters were counterfeit, so it didn't really cost them anything to send the letters, but you know, they could only send so many letters, 10,000 letters, 25,000 letters, but they were only looking for 0.1% of response. If someone would respond, they were going to make a lot of money. Then we got into emails, and we all got spam and all these emails coming over all these scams from Nigeria. But they could reach now millions of people by sending out emails, and again, only looking for that 0.1% to respond. And then, of course, they moved into robocalls because robocalls became a new technology they had access to, and they could make not millions, but billions of robocalls annually, and again, only looking for that small percentage of return where you would get a response. So as, as we always say, as technology moves along, criminals move along with it, technology breeds crime, they just find another way to use that technology to help them can go get whatever it is they're trying to do with scam or whatever it is they're trying to perpetrate, just makes it that much easier. So robocalls are just to move along 40 years of technology to where we are today with robocalls. And if eventually robocalls go away and some new method of technology comes out to communicate with people, they'll use that in the form of communicating. The more people they can reach in the quickest amount of time, the more money they're going to make.

[00:02:28] Will: All right, let's get into this week's scam. We'll talk a lot more about illegal robocalls and what's going on right now that may be some very good news for people who are sick and tired, probably as we all are, of getting robocalls. Well this week we're going to tell you about an out of control robocall scam that was much more than a nuisance. It actually endangered lives. And it's the story of how an unlikely duo, the FCC and Trip Advisor worked together to take down the robocall king, and hit him with a $120 million fine, the largest in FCC history.

[00:02:58] Hello. This is Jack, and I am calling you from the refund department, and this call is in regard to your refund of $399.

[00:03:08] Hello. This is Beth calling from the underwriting department. Based on your recent payment activity and balance, you may be eligible for an interest rate reduction to as low as 1.9%.

[00:03:20] Max Brown here with Couchworker.org. I'm calling about an open job position paying between $3000 and $6000 per month from in your home using your computer.

[00:03:30] Will: The dreaded robocall. For some of us it's more than a nuisance, it's an everyday thing. For some, even multiple times a day, and it seems like it's getting worse.

[00:03:39] They are the single biggest source of consumer complaints for both my agency, the Federal Communications Commission, as well as our sister agency, the Federal Trade Commission. And that's really remarkable because we get complaints about everything. Um, if you can, to put it in context, you know, there are more people complaining about robocalls than complain about their cable bill prices.

[00:04:02] Will: That's Kristi Thompson. She's the Chief of the Telecommunications Consumers Division at the FCC which means her job is to look out for consumers on a range of issues, and that could be not being overcharged by your cable company, and it means robocalls.

[00:04:14] Kristi Thompson: If you're feeling lately like you're being deluged with robocalls, you're, there's nothing, you're not crazy, that you are.

[00:04:21] Will: One of the reasons why robocalls are so common these days has to do with a term you might have heard about, spoofing, which just means faking the caller ID information so that scammers can hide where they're calling from. So in a lot of cases the robocalls you're getting might look very similar to your number or numbers in your neighborhood. They trick you into thinking it's someone you know, it's a call you think you should pick up.

[00:04:41] Kristi Thompson: We call that neighbor spoofing, 'cause it looks like that call is coming from your neighborhood, you know, how your neighborhood has an exchange and most of your neighbors end up with kind of the same first six digits of their 10 digit phone number. The idea is that robocalls kind of pioneered that technique because they would, they could get a better response rate.

[00:04:58] Will: You might even get a call from someone complaining that you keep calling them.

[00:05:02] Kristi Thompson: But if someone calls you up and says, "Why did you call me?" and you didn't make a call, don't, don’t worry, no one is hacking into your phone line, uh it, it's just what somebody has done is they took your phone number and through a randomizer or whatever, it popped up on some call that somebody didn't want.

[00:04:15] Will: A spoof.

[00:05:18] Kristi Thompson: A spoof. That's exactly right.

[00:05:19] Will: For scammers, spoofing is a secret weapon. They can get past that first barrier getting you on the phone. Spoofing allows them to knock that barrier down. Alex Palmer is a freelance writer and he is very interested in the world of robocalls.

[00:05:33] Alex Palmer: Last month was something like 5 billion calls, just robocalls. Um, there's another service that has predicted that by the end of this year, half of all phone traffic in the United States is going to be spam.

[00:05:45] Will: And like most Americans, Alex gets lots and lots of robocalls.

[00:05:48] Alex Palmer: Tell me that I had won some lottery, or I had student loans that need to be forgiven, or I had tax debt that the uh IRS was coming to get me for, and I just wondered, how does this work? How does, you know, how does this economy function? Why is it worth it for these people to place some of these calls, and more than that, I wondered who are these people on the other end of the phone? Sometimes I would just pick up and try to see if there was a real person there, just ask them, you know, do you know that this is illegal? Do you know that this is a scam? You know, how did you get into this business? But as you might expect, the people at the other end of the line were not too eager to engage with me.

[00:06:21] Will: And as Alex Palmer starts digging into the shadowy world of robocalls, he learns that not all of them are illegal. In fact, you probably get robocalls all the time that are totally legit.

[00:06:32] Alex Palmer: Some can be annoying but still legal, like debt collectors can still call you. Your bank can still call you. Less annoyingly, if there's a snow day, your kids' school can robodial you and say, look, you know, don't come to school. If there's an emergency they can do it.

[00:06:46] Kristi Thompson: And it depends on what the kind of call is, so for example, the rules are more open if the call is just informational. They're not trying to sell you anything, and my, my favorite examples of this, of an actual beneficial robocall is one that...

[00:06:59] Will: Yes please.

[00:06:59] Kristi Thompson: ...that I get at least once a month from my pharmacy, letting me know that my, my prescriptions are available to be picked up. I'm very much, uh, very much appreciative of those calls, because I tend to forget things, and especially prescription reminders.

[00:07:12] Will: So it can get a bit confusing, what's okay and what's not okay. But in general, if you haven't given permission to get a call, you shouldn't be getting it, in theory.

[00:07:20] Kristi Thompson: If you are trying to scam someone, that's an illegal call. You have an illegal purpose for that. You're committing fraud, um, you're, you're making an illegal robocall. If you're scamming someone, I have never met a single consumer who gave permission to anyone to be robocalled for a scam. Uh, permission is really the crux of everything. Did you have the recipient's permission to make that robocall? If you didn't, and you call a cell phone or, or your call is about, you know, of a sales kind of nature or a scam, uh you have broken the law.

[00:07:52] Will: So what the heck do we do? Stop answering our phone? That's one approach. But a lot of people who rely on their phone for work and a host of other reasons, well that doesn't really work. There are a growing number of apps available that are designed to block robocalls. We'll get into the solutions that are out there in a little bit. But now that we have an idea of how big the problem is and how they use spoofing to get to us, let's dig into the story of a robocall scam that was doing real damage to a very well-known online travel website, even causing a life threatening public safety issue.

[00:08:24] Kristi Thompson: You remember the '80s and '90s, you remember pager systems?

[00:08:28] Will: I absolutely...

[00:08:29] Kristi Thompson: Yeah, that, that was how you wanted to reach somebody if you needed to get a hold of somebody in a hurry, and it turns out there are still people who use pagers. And those pa--, and those pagers are used almost exclusively by emergency services personnel, things like doctors, uh nurses, EMTs, firemen, because a, a paging technology it, it's old, but it's extremely reliable. So, one day, I am sitting in my office and I receive a message from uh, from our public safety guys who are relaying a problem that the, you know, a major medical paging company is having, and the medical paging company that has hospitals and, and uh facilities, uh, they serve hospitals and facilities all over the country; they said, "Someone is making just so many robocalls, hitting our networks, they're making so many at the same time in our geographical area that they are actually disrupting our network."

[00:09:24] Will: So pagers are going off.

[00:09:26] Kristi Thompson: Right.

[00:09:26] Will: Cause the pager's just like a phone number.

[00:09:28] Kristi Thompson: Exactly, and if you call that phone number with a robocall, the pager system doesn't know what to do with it. It's keep--, it keeps listening for that, that number, those dial tones to display the numbers on the pager, but it's getting a, a crazy prerecorded message instead about a hotel deals from, you know, Marriott or Trip Advisor.

[00:09:47] Will: More on those hotel deals in just a minute, but all of this brings up just how easy it is to set up robocalls. Scammers have technology, it's not all that hard to set up that does all the work for them.

[00:09:57] Kristi Thompson: That's kind of the hallmark of, of robocalls. You could make a, a very easily, make a million telephone calls a day if you want to using um, almost off the shelf software, dialing software that's available uh for purchase. I mean you have to know what you're doing, but you can put out a tremendous number of calls. Uh, these calls, the cheapest version of, of robocalls, they originate through voiceover IP, they're very cheap to do, um, VOIP has been a, a godsend for like reducing the, the cost of making long, you know, long distance calls, especially international calls, but the downside of that is that it's cheaper for malicious callers too.

[00:10:33] Will: But in this case, the robocalls are getting all these pagers and locking up the network and chaos ensues.

[00:10:38] Kristi Thompson: The hospital, you know, contacts their paging service company saying, hey, our pagers aren’t working, something's wrong here. The network is, is not good. This is a serious problem.

[00:10:48] Will: That's when the FCC steps in, trying to figure out first how to stop the calls, and then find out who's making the calls. So in the instance of this case that we're talking about today, all of a sudden doctors, medical personnel, emergency workers are getting spammed on their pagers.

[00:11:03] Kristi Thompson: That's right, and it's having a, a serious you know potential loss of life issue. If you, you can imagine a situation where, you know, a doctor is grabbing that one cup of coffee he's going to have time for in a 12-hour shift, and something goes wrong and they need him urgently back there. If he, if that pager doesn't work, that's a potential life lost, so that's something we take extremely seriously.

[00:11:25] Will: But you'll remember that Kristi mentions the robocalls are pitching fabulous vacations, getaways, and they mentioned some major companies in the travel industry; Marriott, Expedia, Hilton, and Trip Advisor. Brad Young is Assistant General Counsel for Trip Advisor.

[00:11:39] Brad Young: Trip Advisor is the world's largest travel website, and our mission statement is that we uh, endeavor to enable you to get the most out of every single trip; plan, uh book, and then review it after you're done. So we became very famous for being the first site that enabled travelers to both write and read firsthand reviews of what hotels and restaurants really were like. And our website really empowers travelers to, you know, live those experiences to the fullest, and be confident in their decisions and have just a, a, a fantastic trip every time.

[00:12:16] Will: So you could imagine when that's your mission as a company, you're not going to be happy about robocalls that are hitting phones by the millions and using your brand without your consent. Brad Young vividly remembers the morning of October 12th, 2015, when he first heard about what was going on.

[00:12:30] Brad Young: I came into work that day and had an email from my boss indicating that his wife had actually received a robocall that uh she couldn't tell it was a robocall when she picked it up because the phone number looked like it was local, and when she picked it up, uh the recording at the other end purported to be from Trip Advisor and was offering her some sort of fantastic vacation. She, and my boss, knew that was a problem for a number of reasons, a) because we don't do any sort of uh phone calls to consumers, robocalls or humans, and b) we don't sell trips. We're the ones offering you the, you know, the great advice in making it possible for travelers to help other travelers, but we certainly don't package them together and sell them. So, we knew this was an issue, and some fraudster out there was using our brand to try and scam people out of money.

[00:13:21] Will: That was a big deal, and the fraud team at Trip Advisor knew it. Consumer complaints about the calls start pouring in.

[00:13:27] Brad Young: So at that point in time, we didn't really know what to do. Um, but it wasn't long before the second complaint came in, and this one was less helpful, right? The first one was our general counsel's wife saying, hey, this isn't right. You guys should figure this out. The second one and the third one and the fourth one were consumers that were really upset, that thought that we were harassing them on their phone with robocalls. I mean, there are very few things that, in America that everyone can align on, but I think one is, we all hate robocalls. Every one of us. And so when you start getting one and you hear a, a popular brand like Trip Advisor sounding like they're connected to it, um, all of a sudden you have someone to take your anger out on. So we started getting those angry calls.

[00:14:10] Will: Well what the scammer or scammers don't know when they decided to use Trip Advisor's brand, is that the company's actually a leader in identifying and detecting frauds.

[00:14:18] Brad Young: Trip Advisor has been um, leading the online review space and fraud detection for nearly two decades, and we have um, both computers, uh computer algorithms, and a team, a dedicated team of individuals that spend 24/7 working on identifying fraudulent content.

[00:14:38] Will: And the secret weapons for Trip Advisor in this case, is one man, one very dedicated fraud investigator; Fred Garvin.

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[00:14:47] Brad Young: Fred has been uh an investigator working on uh identifying and stopping fraud for Trip Advisor for many years. Um, he's, he's really an expert in what he does. He is constantly uh iterating, evolving, and developing new methods for identifying fraud, right? These, the people that are trying to submit fake content to Trip Advisor, they learn pretty quickly that the easiest ways that they think of are going to get caught right away, so they're constantly evolving, and so Fred is one of the people that really manages to stay not just one, but probably two or three steps ahead of them at all times.

[00:15:25] Will: And like all good fraud detective, Fred Garvin isn't actually using his real name. The writer, Alex Palmer.

[00:15:30] Alex Palmer: Yeah, so he goes by Fred Garvin professionally. It's one of several fake names he uses because you know, as you'd expect of someone who spends their day tracking down scammers and trying to put them in jail, there are people who would love to know who he really is, where he lives, and how to get to him. Um, so he uses the name Fred Garvin. It hearkens back to an old SNL skit with Dan Aykroyd.

[00:15:52] Will: When we talked to Fred, he sounds relaxed, mild-mannered.

[00:15:55] Fred Garvin: I was introduced as the most cynical person, uh that you will ever meet, and that I will excel at fraud because uh, you know, I will find the answer to any question that's put in front of me.

[00:16:06] Will: So Fred's on the case, and he starts investigating, but the process is daunting, probably overwhelming for someone who doesn't share Fred's expertise and passion.

[00:16:15] Alex Palmer: This was really collecting all the breadcrumbs, and um, I'm going to mix my analogies here, but sticking them up on the bulletin board with pieces of string. This over here, and this over here, and what's in the middle, and what's going on, right? There was a lot of that trying to figure it out, um, and having the patience to just run down all those leads which Fred did, and, and really make sense of them. That was really challenging.

[00:16:36] Fred Garvin: I used our forums to my advantage and where I looked for similar complaints of users saying, hey, you know, Trip Advisor called me offering me you know, 999 travel dollars and things. This is, is this real? Uh, and every time someone would make a post, someone would add a little bit more to it. They'd say, okay, you know, this uh, they gave me this website or this company name. And that started you know the investigation. That, that added to what we needed to be able to figure out where it was going.

[00:17:11] Will: Fred becomes intimately familiar with the scam, the robocalls, and exactly what the fraudsters are offering to anyone who picked up the phone.

[00:17:18] Fred Garvin: The first question they would ask you is, are you between the ages of, and it was usually somewhere between 25 and 50. Or 25 and 65. And they would ask you what your annual household income was; if it was over, let's say 50,000 a year, 65,000. If you made it through those two hoops, you were then connected to an agent in a call center, normally in uh, Mexico, sometimes here in the US. It depended on the time of day when you would get those calls where they would be routed to. They would then go into a sales pitch making it sound like you had won an all-inclusive trip to Cancun, Mexico. And at the end of that presentation, they would say, "Okay, and uh, you know, normally this trip costs $4,000, but today you can have it for $999."

[00:18:09] Will: So they start by saying it's all free, but now, ten minutes into listening to the pitch, it's $1,000. What they don't tell you is that you'll need to come down for a timeshare presentation within the next 18 months, but then people who paid upfront will find out that there are blackouts dates, they can't reach the company, emails don't go through, the websites go dark.

[00:18:28] Fred Garvin: We eventually found that there was sort of this call center industry in Mexico, especially in Cancun and the Yucatan Peninsula and that all of the companies that seemed to be pitching their services through the robocalls, you know, mysteriously connected back to these, these same few IP addresses and the same, you know, few phone numbers, and uh, and servers. So we started to think, okay, there's a connection there, maybe it's these call centers in Mexico that are making these fraudulent calls using our name, using Trip Advisor's name and the names of other well-known American corporations.

[00:18:59] Will: But it was like finding a needle in a haystack talking to angry consumers and chasing IP addresses. Fred Garvin and the fraud team needed a break, something to lead them to where the calls were coming from. And in July the following year, Fred got the break he needed.

[00:19:14] Fred Garvin: I personally received one of the calls, and to me, that was like Christmas had come early. Uh, I was really excited to be able to be on the receiving end, and that allowed me to ask questions that I could get answers to that I may not be getting from other people that have posted complaints.

[00:19:32] Will: But would it be enough to track down an illegal call center, and a scammer or scammers making millions of unwanted calls and bringing in millions of dollars? Join us next week for part 2 to find out what happens.

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[00:19:46] Will: All right, so Fred finally has one of these calls himself, which is kind of funny to think about, here's this guy who works for a company and he'd been talking to all these consumers who were getting robocalls, but what he really wanted was one of the calls himself. He brings up the point that companies that are smart are, are thinking about these issues uh because they know it can be a real nightmare in terms of customer relations and how happy their customers are. So companies are going the direction of having fraud departments; for a long time they've doing that, right?

[00:20:12] Frank Abagnale: Right, absolutely. I mean, probably 25, 30 years ago a retired FBI agent in Austin, Texas, uh realized that a lot of people needed to be educated about being fraud examiners, so he started an association, and he provided educational programs so that you could get accredited as a certified fraud examiner. In the beginning it didn't mean a lot because a lot of people didn't really uh participate, but now we have thousands and thousands of certified fraud examiners who have gone through the educational process, and they're hired by insurance companies and all businesses that have fraud departments uh to deal with all these issues of fraud against their company. I was in London uh dealing with one of their phone companies that said, 44,000 calls a day, 7 days a week to their call center, and they get millions of calls at the call center, are people who have been scammed. They said, well, some guy said he was from the phone company, and I owe this money. I've got this false statement in the mail, but 44,000 calls of this phone company in Great Britain, which they only service Great Britain, every day are scams. Uh, so the thing is though, if you're a large company you can afford fraud examiners, and you can afford a fraud department like as banks do, and etc. But the smaller companies can't afford that, so they don’t have the ability to fight fraud as a big company can or have fraud examiners go out and do things that law enforcement doesn't have the time or the resources to do every single day; they do that themselves. So I think it's great that there are people, uh in companies now that do this for a living, and, and we have great data analytics today. Because there is so much data today, uh companies that provide data analytics like Lexus Nexus, Experian, companies like that, they're able to know so much about what's going on and to track so many of the things that are going on and see where they're coming from, so these alerts come up and, they understand right away this is a scam. And, and I think there's a lot more training going on at call centers, uh to help educate their employees of when they're being socially engineered because as I've always said there is no technology, there never will be any technology to defy social engineering. You can only defeat it through education, so you have to educate their employees to know they're being socially engineered, but I think they're doing a much better uh job of that and cyber awareness, all the things that's going on internally in companies, uh is helping fight a lot of this fraud that was committed against these companies or where their company is used as part of the, the fraud scam.

[00:22:41] Will: All right, well join us again next week as we tell our listeners what happens with Fred Garvin and the Trip Advisor team as they dig further into this robocall scam. Thanks, Frank, we'll talk to you next week.

[00:22:51] Frank Abagnale: Right, great being here.

[00:22:52] Will: If you or someone you know has been the victim of a fraud or scam, don't hesitate to call AARP's Fraud Watch Network Helpline at 877-905-3360. As always, thanks to my team of scambusters; producers Julie Getz, Brook Ellis, our audio engineer, Julio Gonzales, and of course, my cohost, Frank Abagnale. Be sure to find us on Apple Podcasts or wherever you listen to podcasts. For AARP - The Perfect Scam, I'm Will Johnson.

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