Two federal courts in California have ordered Voice-over-Internet Protocol (VoIP) service providers to turn over information that the Federal Trade Commission is seeking as part of the agency’s investigations into illegal robocalls. The FTC yesterday issued a press release warning companies that fail to comply with such court orders may be held in contempt of court.
In 2021, the FTC issued Civil Investigative Demands to XCast Labs and Deltracon, both based in California, and one company “produced only a small fraction of the required information” and the other failed to respond to the CID altogether.
After going to court to obtain orders for both companies to comply with the CIDs, Deltracon “finally” turned over the information that the FTC had requested, while XCast Labs has been ordered to comply but has yet to do so.
Ignoring CIDs is not something that traditionally goes well for companies that receive such invitations from regulators like the FTC and the Consumer Financial Protection Bureau.
“Companies that receive FTC Civil Investigative Demands must promptly produce all required information,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, in a statement. “These demands are not voluntary. Companies that don’t respond fully, or don’t respond at all, will have to answer to a federal district court judge, as these cases demonstrate.”
CIDs are no joke and nobody, including companies in the accounts receivable management industry, should ignore them. It will be interesting to see if the CIDs in these cases lead to enforcement actions like the ones that the FTC has previously taken against companies accused of facilitating the transmission of robocalls, like its lawsuit against Alcazar Networks.
