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Why aren't phone companies doing more to block robocalls?

Software developer Aaron Foss, who won the FTC'S RoboCall Challenge in April, plans to offer a free blocking service soon.
Source: Aaron Foss
Software developer Aaron Foss, who won the FTC'S RoboCall Challenge in April, plans to offer a free blocking service soon.

If you have a phone, you probably get robocalls. These unwanted telemarketing calls—often used by scammers—are annoying, distracting and a real invasion of your privacy. And yet, there's no way for you to stop them.

Law enforcement tries to go after the people who thumb their nose at the law, but they're often based in foreign countries and very good at using computer technology to hide their tracks.

"We're using every tool we have," said Lois Greisman, associate director of marketing practices at the Federal Trade Commission. "We tightened the rules about robocalls and aggressively brought cases to shut down robocallers. But, unlike the Lone Ranger, we don't have a silver bullet to end invasive robocalls."

So, the calls go out and the complaints pour in.

(Read more: Robocall swindlers use 'Life Alert' name to swindle seniors)

Robocalls make up the largest number of complaints to both the Federal Communications Commission and the Federal Trade Commission. The FTC alone receives more than 200,000 robocall complaints per month.

"We've got to up our game to protect people from this," Sen. Claire McCaskill, D-Mo., chairwoman of the Senate Subcommittee on Consumer Protection, told CNBC. "The technology is available. It's very practical and realistic that we put more pressure on the phone carriers to participate in solving this problem."

To that end, McCaskill held a hearing last week to ask U.S. phone companies why they aren't doing more to stop the deluge of robocalls. And she chastised them for not using filtering technology similar to what's already working in Canada and soon to become available in this country.

So what's the holdup?

Telecom companies told the committee they are concerned about the growth of robocalls and understand customer frustration, but they questioned whether filtering technology would really work.

Kevin Rupy, senior director of law and policy for the United States Telecom Association, testified that phone companies "work in many ways to monitor, mitigate and respond to the problem." He reminded the senators that carriers are legally required to complete all calls and they may not be allowed to use call-screening software.

Michael Altschul, senior vice president of CTIA - The Wireless Association, testified that wireless carriers "have concerns about overreaching and blocking legitimate calls."

The Canadian solution

Canadians who get their phone service from Primus Telecommunications, can take advantage of a free service called Telemarketing Guard. It's been available since 2007. The system recognizes likely telemarketing calls, including robocalls, and stops them before they're completed.

These suspect callers receive a message that says the number they called does not want telemarketing calls, but you can press 1 to record your name and be announced. If there is no response to the prompt, the call does not go through.

If the caller does press 1, the phone rings and the words "Telemarketing Guard" appear on the Caller ID. You can answer the call or ignore it and let it go to voicemail. If it is a telemarketing call, the customer can dial a code that alerts the Telemarketing Guard system.

Yes, Primus is using crowdsourcing to stop robocalls.

"The decision of who is and who is not a telemarketer is really made by our customers," said Matthew Stein, chief technology officer at Primus. "The system doesn't start out thinking anyone is a telemarketer, but as more people report them, the system itself recognizes that this number is owned by a telemarketer and we'll start to impede those calls."

Primus say customer feedback on Telemarketing Guard has been overwhelmingly positive: Two-thirds of its customers say they have noticed a "dramatic reduction" in unsolicited telemarketing and robocalls; 87 percent say this is the key reason why they stay with the company.

Adam Senour, a web designer who works from his home in Toronto, told me he used to get five or six telemarketing calls a day. Now, with Telemarketing Guard, that's down to one every three months. Senour said he is not worried about missing legitimate calls.

Nomorobo about to launch in the U.S.

Relief may soon be available in this country thanks to Aaron Foss, a software designer from Long Island, who figured out another way to block robocalls. Just three months ago, Foss won the FTC's Robocall Challenge with his Nomorobo

At that Senate subcommittee hearing, Foss announced that he plans to have his prize-winning solution available before the end of the summer. (You can sign up on the Nomorobo website to be notified when the service is available.)

"The technology that has allowed these robocallers to send out millions of phone calls for pennies, also allows programmers like myself to block their calls for pennies," he told me.

(Read more: FTC awards $50,000 in 'Robocall Challenge')

The basic Nomorobo service will be free to individual phone customers. Foss hopes to make money by offering premium services—such as a block on political robocalls, which are legal on landline phones—and selling to business customers.

Foss readily admits his service won't be 100 percent effective, but he said it's time to do something to fight back.

"We have to start making robocallers work harder because there's nothing out there stopping them," he said.

At the hearing, McCaskill said she couldn't wait to try Nomorobo and she called on the nation's phone carriers to step up and deal with the problem. She believes technology developed by the private market would be better than something mandated by the government.

"Hopefully, these companies can be convinced that if they would stop making excuses and try to solve the problem, their customers would be a lot happier," the senator said.

Know the law

The FTC's Telemarketing Sales Rule bans most commercial robocalls unless the recipient has given the caller advance written permission to call them. The rule does not prohibit noncommercial robocalls, such as surveys or messages for charities and political organizations.

The Federal Communications Commission also has robocall rules that ban most recorded calls to wireless phones and other mobile devices. They're only allowed for emergency purposes or if the person receiving the call has given prior permission.

If you've received what you believe to be an illegal robocall, file a complaint with the FTC. If the robocall came to a mobile device, you should also report it to the FCC.

—By CNBC contributor Herb Weisbaum. Follow him on Facebook and Twitter @TheConsumerman or visit The ConsumerMan website.

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