On the Money

Robocalling soars despite 'Do Not Call' registry, as scammers 'couldn't care less' about bothering consumers

Key Points
  • The 'Do Not Call' registry has done little to curb robocalls, which are soaring.
  • Many calls come from overseas, which are cheap and helps scammers escape the reach of U.S. authorities.
  • Most scammers 'couldn't care less' about laws meant to deter the activity.
Wrong Number
Wrong Number

The phone rings, pauses, and then a recording on the line says: "Hello! This is Rachel at cardholder services," or "This is an important notice about your automobile."

If you're like many Americans, you have probably received a robocall just like these, which have become a scourge for consumers despite increasing efforts to stop them. In May, there were 2.6 billion robocalls, or automatically dialed calls, in the U.S. That amounts to over eight calls a person, according to YouMail, an app designed to stop the pesky calls.

"Anytime you get a robocall in which somebody is trying to sell you a good or service, if you didn't give the caller prior expressed written consent for that call, that call is illegal," Janice Kopec, a staff attorney with the Federal Trade Commission, told CNBC's "On the Money" recently.

The FTC's Do Not Call List was designed to stop telemarketing calls, yet robocalls are on the rise. They were up nearly 5 percent last month, according to YouMail's numbers, despite 226 active numbers registered with the Do Not Call List.

All those unwanted calls have led to a massive surge in complaints. The FTC received nearly 3.5 million robocall complaints in fiscal year 2016, up 60 percent from the year before.

"The 'Do Not Call' registry actually works for legitimate businesses," said Alex Quilici, CEO of YouMail. "The problem is all the people who don't respect it, who are the scammers who [couldn't] care less."

Calling for less than a cent

Those scammers use new technology to call you in the hopes you will fall for their scam and hand over money.

"It's super easy to do, it's super cheap, and unfortunately, it works. People fall for the scams enough to make it worthwhile," Quilici said.

The calls are often coming from overseas, where scammers try to stay out of the reach of regulatory authorities, according to the FTC.

"You can make millions of calls from anywhere in the world for a tiny amount of money, literally less than a cent a call," Kopec said.

The Federal Communications Commission, which also regulates calls, received around 200,000 complaints annually. "Unwanted calls — including illegal robocalls and telemarketing calls — are the top consumer complaint the FCC receives each year," the agency said in a statement sent via e-mail.

Government crackdown

The government is trying its best to crack down on robocallers, which has proved stubborn to defeat. The FCC is also testing letting phone companies block calls that are likely scams.

"We've brought over 130 law enforcement actions targeting those who send out unlawful calls and illegal calls," Kopec said.

The FTC was awarded a $280 million judgment against Dish Network, a satellite television provider, for Do Not Call List violations, including some robocalls, earlier this month.

"DISH respectfully disagrees with the decision by the Court and will appeal the ruling. … DISH has long taken its compliance with telemarketing laws seriously, has and will continue to maintain rigorous telemarketing compliance policies and procedures," the company said in a statement sent to CNBC via email.

Vladislav Ociacia | Getty Images

The telecommunications industry is also working to stop robocalls, but challenges abound — such as the fact that some automated calls are actually legal.

"One of the things that consumers need to be aware of is that often times some of these robocalls ... we may not like them and they may not like to get them, but in most every state in the country, they're perfectly legal," said Kevin Rupy, vice president of law and policy for USTelecom, a trade group that represents landline providers.

Aside from political calls, other robocalls such as school closures and push 911 messages are well withing the law, Rupy added.

Another challenge is what is known as spoofing, when scammers change the number on caller identification. These sorts of calls look like a local call or that it is coming from someone you trust, like your bank.

"A lot of the criminal actors that are operating in this space are very sophisticated in how they're pushing these calls out to consumers," Rupy said. "One example where you see is where the illegal robocallers will spoof the area code in the first three digits of the consumer's phone number, so that consumer believes that it could be the school calling, it could be my neighbor down the street calling, and they're going to be more inclined to pick up the phone," he added.

To combat this, the industry is working on standards to add trustworthiness to caller ID.

"The wireless community — including wireless providers, handset vendors, and system providers — is united in its efforts to defeat robocalls," said Krista Witanowski, an assistant vice president of regulatory affairs at CTIA, a trade group that represents the wireless industry, in an e-mailed statement.

"These efforts, which collectively stop more than a million robocalls every day across the country, are ongoing and the wireless industry remains fully committed to stopping such nuisance calls," she added.

What you can do to stop the calls

Consumers also play a role in stopping robocalls. Here is what you can do.

  • Don't answer calls from unfamiliar numbers. "Everybody has to get out of the habit of picking up the phone and answering if it's not a number you don't know," Quilici said
  • Look into services and apps that can block robocalls. Quilici's app, YouMail is one of many available ways to prevent the annoying calls, many of which are free.
  • Register your number on the Do Not Call List, donotcall.gov. "After that if you get a call that is trying to sell you a good or service, you have a pretty good idea that that call is illegal and the person behind that call is a law violator, and so you have a good sense of knowing that that's a call that you don't want to engage in," Kopec said.
  • Report illegal robo-sales calls to the FTC at complaints.donotcall.gov. The government passed on these numbers to services that block calls.

"On the Money" airs on CNBC Saturdays at 5:30 am ET, or check listings for air times in local markets.

Correction: This story was revised to correct that robocall complaints to the FTC in fiscal 2016 increased by 60 percent from 2015.