FCC Moves to Address Offshore Call Centers and Foreign Robocalls

On March 5, the Federal Communications Commission (FCC) released a Notice of Proposed Rulemaking (NPRM) that the commission plans to vote on during its March 26 Open Commission Meeting. The proposal seeks to address offshore call centers, with a particular focus on improving customer service and combating robocall scams originating from abroad. Notably, the proposed rules would apply to providers of telecommunications services, commercial mobile radio services (CMRS), interconnected VoIP services, cable television services and direct broadcast satellite (DBS) services, as well as their affiliates. It also hints at either direct coverage or indirect coverage of other industries such as the financial services industry by asking questions such as how it should address, “requests to change or reset passwords or multi factor authentication, or transactions that involve taking a consumer’s bank account, credit card, or Social Security number.” And as outlined below contemplates whether coverage is needed under existing statutes such as the Telephone Consumer Protection Act (TCPA).

The FCC states that the offshoring of call centers has contributed to ongoing customer service challenges, domestic job losses, privacy risks and scams targeting U.S. customers. Specifically, the FCC points to declining customer satisfaction, widespread use of foreign call centers, communication barriers, data security concerns and foreign-based robocall operations as drivers of the rulemaking. The FCC suggests these issues may warrant regulatory action to facilitate onshoring, improve customer service quality, protect consumer data and national security and deter illegal robocalls originating abroad.

Protecting American Consumers

The FCC proposes rules that would require certain communications providers to:  

• Ensure staff at offshore call centers are proficient in written and spoken American Standard English. The commission seeks comment on whether this requirement should extend beyond basic technical proficiency to include tone, idioms and cultural understanding.
• Limit the percentage of calls handled by offshore call centers to a specified threshold (e.g., 30%).
• Disclose when a call is being handled outside the United States.
• Allow consumers to request a transfer to a U.S.-based call center, with providers required to complete such transfers promptly and without disproportionate wait times.
• Require certain sensitive transactions to be handled within the United States, including those involving passwords, bank account or credit card information and multi-factor authentication.

The FCC also seeks comment on whether these requirements should be expanded and applied to non-voice communications.

Increasing the Cost of Unlawful Calls

To deter illegal robocalls originating abroad, the FCC seeks comment on mechanisms that would increase the cost of placing unlawful calls to the United States. Potential approaches include tariffs or bond requirements.

Legal Authority

The FCC requests comment on its authority to regulate offshore call center practices under existing statutes, including the TCPA. Specifically, the FCC sees input on:

• Whether it has the authority to regulate foreign customer-service operations used by U.S. communications providers.
• Whether it may impose tariffs or bond requirements on international calls entering the United States.

Costs and Benefits

The FCC also seeks comment on the economic impacts of the proposed rules, including:

• Compliance costs for affected providers.
• Potential benefits from improved customer service and reduced fraud.
• Possible impacts on employment and operations at call centers.

Brownstein’s Outlook

The FCC is expected to vote on the proposal at its March 26 Open Commission Meeting. The NPRM signals a potential shift toward greater oversight of call centers used by U.S. communications providers, with an emphasis on consumer protection, data security and scam mitigation. While the proposal covers specific providers, it also asks a broad set of questions that could sweep a wide variety of American businesses into any new requirements.

If adopted, the rules could impose significant operational and compliance obligations on covered providers and businesses that they work with. As the FCC moves forward with the rulemaking process, stakeholders will have the opportunity to shape the FCC’s approach by submitting comments on the proposed provisions.

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