By David Shepardson
WASHINGTON (Reuters) - The Federal Communications Commission on Tuesday voted unanimously to propose a record-setting $225 million fine against Texas-based health insurance telemarketers for allegedly making approximately 1 billion illegal robocalls.
The order named John C. Spiller II, and Jakob Mears, using businesses, including Rising Eagle and JSquared Telecom. The FCC said robocalls falsely claimed to offer health insurance plans from major health insurance companies such as Aetna (NYSE:AET), Blue Cross Blue Shield, Cigna (NYSE:CI), and UnitedHealth Group (NYSE:UNH).
The pair could not immediately be reached for comment.
FCC Chairman Ajit Pai said Rising Eagle "primarily used spoofed Caller ID numbers to flood consumers with prerecorded calls that... misled consumers into thinking that the calls were from well-known and reputable health insurance providers."
Instead, consumers were offered "short-term, limited-duration health insurance plans offered by lesser known entities— a far cry from expectations."
Separately, Texas Attorney General Ken Paxton, joined by the states of Arkansas, Indiana, Michigan, Missouri, North Carolina and Ohio, on Tuesday sued the pair, along with their Texas-based companies Rising Eagle Capital Group LLC and JSquared Telecom LLC, in U.S. District Court in Texas for violations of the Telephone Consumer Protection Act.
Paxton said over the past two years, Spiller and Mears initiated billions of abusive robocalls through the two companies. The calls, made both to residential and cellular phone, "confront consumers with pre-recorded messages pitching healthcare products or automobile extended warranties."
FCC Commissioner Jessica Rosenworcel backed the effort but said the FCC had not been able to collect a significant portion of the hundreds of millions of dollars in total robocall fines levied previously.
"So far collections on these eye-popping fines have netted next to nothing," she said, saying the FCC needs assistance from the Justice Department to collect.