FTC reaches settlement with XCast Labs over illegal robocalls

WASHINGTON (Reuters) – U.S. regulators and XCast Labs have proposed to settle charges that the company facilitated billions of illegal robocalls, the Federal Trade Commission said on Tuesday, adding that XCast must cut ties with firms that do not follow telemarketing rules.

The FTC also ordered the Voice over Internet Protocol (VoIP) provider to pay a $10 million civil penalty but suspended the fine “based on its inability to pay,” it said in a statement, adding that the penalty will be due immediately if XCast “misrepresented its financial condition.”

Regulators sued Los Angeles-based XCast over charges it helped other companies contact people on the National Do Not Call Registry and generally deceive them into making purchases or contributions after previously warning the company multiple times.

“Companies that turn a blind eye to illegal robocalling should expect to hear from the FTC,” Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, said in the statement.

The U.S. Department of Justice’s Civil Division Principal Deputy Assistant Attorney General Brian Boynton said Tuesday’s order highlighted the department’s “efforts to protect American consumers from illegal robocalls and to stop telecommunications providers from enabling those calls.”

As part of the proposed settlement filed with the U.S. District Court for Central District of California, XCast must start using a screening process and halt its ties with firms that do not comply with U.S. telemarketing laws, the FTC said.

Representatives for XCast could not be immediately reached for comment on the proposed order.