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5 min read

Numeracle’s Know Your Customer Initiatives Earn Praise at Senate Hearing

Why KYC Matters: Recommendations from the 'Protecting Americans from Robocalls' Hearing
Written by
Molly Weis, VP of Marketing & Communications
Sarah Blantz, Marketing Coordinator
Mary Gonzalez, Brand & Content Manager
Published on
October 27, 2023

Illegal robocallers and their continued victimization of American consumers led to the convening of the “Protecting Americans from Robocallers” hearing on Tuesday, Oct. 24, 2023. Called by U.S. Senator Ben Ray Luján (D-N.M.), Chair of the Subcommittee on Communications, Media and Broadband, the hearing discussed how illicit robocallers continue to evade enforcement, despite numerous rulemaking efforts, through targeted attacks, robotexts, and generative AI (Artificial Intelligence). Focus was placed on expanding the adoption and deployment of tools and policies available to combat and prevent illegal robocalls, including Numeracle’s KYC Policy Guide, which received noted support from multiple hearing testimonies.

Read more on the legislation that has been passed and development of the fight against illegal robocalls

The Call for KYC

Know Your Customer (KYC) is a critical process used in various industries, including banking and finance, to verify the identity of clients. However, its potential use within the telecom sector remains largely untapped. When addressing the robocall issue, there seems to be a missing element that could protect consumers from fraud by improving the identification of suspicious callers by using KYC.  

In an influential move on April 27, 2023, Numeracle submitted its Model Standards for KYC to the Federal Communications Commission (FCC). The detailed questionnaire, designed to gather crucial entity information, aids in the establishment of a rigorous identity verification process. This policy, written by Numeracle’s VP of Trust Solutions, Sarah Delphey, provides a plug-and-play list-style framework for communications service providers to consider when adopting internal standards for reasonable KYC review.  

Referenced by Mike Rudolph, Chief Technology Officer at YouMail, in his Senate hearing testimony, “Numeracle’s list is comprehensive, including asking the prospective customer to share marketing materials, reveal prior actions or judgements, provide descriptions of the calls along with consent collection and legal compliance practices.”

Click to Download Numeracle's Model KYC Policy Guide

In reference to Numeracle’s KYC Model Standards, Numeracle’s Sarah Delphey explains, “We should view KYC not just as a punitive or law enforcement-style investigation for finding customers harming our networks. Instead, we should view KYC as the actions you can take to understand your customers, reduce your levels of risk, and provide a better customer experience.”  

Senate Hearing Testimony Overview

Consisting of a unified, bipartisan panel who all expressed a strong stance against the abusive practices of illegal robocalling, the hearing offered valuable insights into the pressing issue of illegal robocalls.

Megan Brown, partner in the Telecom, Media, and Technology practice at Wiley Rein LLP, emphasized that legitimate businesses support efforts to crack down on illegal robocalls to maintain consumer trust. She suggested that Congress prioritize these efforts and consider changes to the Telephone Consumer Protection Act (TCPA) to prevent abusive litigation against businesses.

Josh Bercu, Executive Director of the Industry Traceback Group (ITG) and Vice President of Policy & Advocacy at USTelecom, stressed the need for stronger criminal enforcement against illegal robocallers, especially those operating overseas or repeat offenders who continue their operations under new identities. He urged Congress to empower the Department of Justice with the necessary resources for these prosecutions. Bercu also called for clear consent guidelines for telemarketing and supported the FCC and FTC’s efforts in this direction. He recommended expanding the traceback consortium’s role to investigate how illegal callers access phone numbers and suggested legislation to protect it from unnecessary lawsuits while combating illegal robocalls.  

Mike Rudolph, CTO at YouMail, urged Congress as well as state and federal agencies, to recognize that the digitalization of society, along with automation of and ease of accessibility to communication platforms, could very well mean that US citizens are now at greater risk of harm sourced digitally than by physical threat. In his testimony, he noted, “agencies should strongly consider expanding their budgeted resources to increase investigative and enforcement capabilities, while simultaneously considering new policies to address bad early adoption threat actors, capitalizing on next-generation robo-communication tools.”    

Margot Saunders, Senior Attorney at the National Consumer Law Center and consumer advocate, encouraged the FCC to provide guidance on how to use the available tools to prevent illegal calling activity, advocating legal callers be educated in best practices to “enable these callers to use their power in the telephone marketplace to ensure that their calls are placed only with providers that do not originate calls or transmit from illegal callers.”

Impact to Legal Callers

Since the early days of illegal robocall mitigation, much of the focus on how to address the issue has been on identifying and blocking the bad actors from accessing the network. This theme emerged as well during the October 24 Senate Hearing. However, due to many of the very mechanisms aimed at protecting consumers from illegal calls, it’s now commonly recognized that the wide net cast via call blocking and labeling algorithms caught more than scam callers. Margot Saunders testified, stating, “Legal callers have repeatedly complained that their legal—and often wanted—calls are erroneously blocked or labeled.”  

"Legal callers place over two billion robocalls every month," Saunders stated. While not all the calls are necessarily wanted by consumers, a significant amount are needed, wanted, critical communications that the recipients may need to answer. Calls about a prescription pickup, appointment reminders, government or disaster alerts, and school closures represent some of the calls being mislabeled and misrepresented to consumers.

Saunders’ testimony referenced Numeracle’s Reply Comments filed in response to the FCC’s latest Further Notice of Proposed Rulemaking, “Advanced Methods to Target and Eliminate Unlawful Robocalls.” Saunders continued by highlighting, “As a result, subscribers are likely missing some calls that they want or need from callers, and legal callers are experiencing escalating costs and frustrations with consistently and reliably completing their calls to subscribers. These problems are caused by the mislabeling and incorrect blocking of their legal calls.”  

Rudolph, in his testimony added, “Numeracle filed further comments with the FCC on August 9, 2023, through which they addressed the current state of analytics, labeling, and blocking. Some of Numeracle’s commentary was furthered by an FCC filing made that same day by United Office, who included screenshots demonstrating how their customers’ calls were displayed on Android and iOS devices across major carriers.”

Read Numeracle’s reply comments

In alignment with Numeracle’s FCC reply comments, Saunders, in her testimony, reiterated that the issue of improper call blocking and labeling of legal calls is still an ongoing industry problem. “Legal calls are mixed with a torrent of illegal calls at shared originating and intermediating providers, causing legal calls to be tainted by illegal calls in the same call path. The result is that legal calls end up mislabeled or blocked by downstream providers seeking to protect subscribers from illegal calls."

So far, the FCC's focus has been on targeting carriers who act as gateways for illegal robocall traffic. Still, there's an urgent need for a system incorporating stricter KYC, Entity Identity Management™ (EIM), and guardrails to assist and protect companies that don't flood the phone network with illegal robocalls from improper call blocking or mislabeling, to properly go after those who knowingly allow fraudulent calls on their networks.

Tools to Protect Americans from Fraud: KYC Managed via EIM

Harnessing the power of Know Your Customer principles is a transformative step toward tackling the issue of illegal robocalls. By integrating KYC, providers can utilize a problem-solution approach that directly addresses the heart of the matter—identity verification. Implementing KYC via an Entity Identity Management (EIM) platform enables service providers to mitigate risk, support robocall mitigation requirements, identify and block fraudulent actors from the network, and simultaneously protect legal callers from suffering unintended consequences of network shutdowns and calls blocked.  

The benefits of KYC and a strong framework to manage the identity of communicating entities extend beyond phone numbers. Implementation not only empowers consumer trust, but also serves as a protective shield for legitimate business, safeguarding their reputation and ability to communicate uninterrupted. By promoting a more transparent and reliable ecosystem, KYC and a platform (such as EIM) to manage it is an indispensable tool for service and communications platform providers alike. Notably, Numeracle has made significant strides in advancing these policies and platforms, setting a new standard in telecom and beyond. Our contribution underscores the necessity of adopting robust KYC procedures for businesses aiming to increase security, build customer trust, and reduce fraudulent activity.  

"It is fantastic to see the clear ongoing focus from the industry on developing better standards for KYC and validation of user identity,” Numeracle’s Delphey said. “Industry, Congress, and the FCC should continue to encourage the development of common standards for verifying the identity of the call originator and displaying that verified information to call recipients."  

At Numeracle, we understand that the intricacies of implementing a Know Your Customer policy can be daunting. Take the first step toward transforming your customer verification process by downloading our Model Standards for KYC and contacting our team of experts today. For service providers ready to deploy a flexible, out-of-the-box solution to manage KYC and Entity Identity Management, contact us today for a discovery call to tell us more about your network configuration and EIM needs.

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