Why U.S. Robocall Hell Seemingly Never Ends

from the your-car-warranty-has-expired dept

According to the YouMail Robocall Index, there were 3.6 billion U.S. robocalls placed last December, or 115 million robocalls placed every single day. That's 4.8 million calls placed every hour. Despite the periodic grumble, it's wholly bizarre that we've just come to accept the fact that essential communications platforms have been hijacked by conmen, salesmen, and debt collectors, and we're somehow incapable of doing anything about it.

Every 6-12 months or so the federal government comes out with a "new plan to finally tackle robocalls," yet the efforts only frequently make a small dent in the problem. One reason why is that each time the federal government unveils a new plan, it focuses exclusively on scammers. Said plan (and therefore the entire press coverage of said plan) discusses robocalls as if it's only something velour track suit clad dudes in Florida strip malls are engaging in.

Folks like Margot Saunders of the National Consumer Law Center (NCLC) has testified before Congress for years about how the biggest robocallers are often legitimate companies, usually selling you services you don't want, or harassing people they know can't pay overdue bills with sometimes hundreds of calls per day. The group notes that as of last month, scammers continued to make up the minority of overall robocalls:

The issue has long been that the marketing and financial industries doesn't want any of this to change, and their influence on Congress, regulators, and policymakers generally means that solutions carve out large loopholes in rules that weaken their effectiveness. And their influence on the courts has consistently eroded what agencies like the FCC can do about much of it. Last April, a Supreme Court ruling (Facebook, Inc. v. Duguid) effectively nullified the Telephone Consumer Protection Act's ban on autodialed calls and texts to cell phones without your consent.

So folks like Saunders keep pointing out while we have a patchwork array of rules that sometimes limit pre-recorded robocalls, the rules governing annoying spam texts or live robocalls are negligible at best:

"A lot of the live calls that are survey calls and debt collection calls to cell phones that are so annoying to people are made with automated dialers,” Saunders said. “There is at the moment no way of controlling those calls unless the called party individually blocks the caller."

The onus is, as it often is in the case of patchy and flimsy U.S. consumer protection, shifted entirely to the consumer to tackle the problem themselves. Especially in a country where Congress struggles to pass any law that might dent the revenues of the nation's biggest and most politically powerful companies (see: net neutrality, privacy, climate, etc.). The lobbying of these companies does more than just weaken court and regulatory oversight. It has resulted in a discourse where robocalls are framed as only a problem involving scammers, not everyday companies (note the heavy presence of telecoms and banks on the list above) that utilize many of the same dodgy tactics as the scammers.

While that broader problem isn't changing anytime soon, one immediate area that could be cracked down on are so-called "gateway providers," who act as a proxy here in the U.S. for robocalls originating overseas:

"Gateway providers, and other originating providers, use Voice over Internet Protocol (VoIP) to transmit voice and text messages over the internet to American landlines and cell phones. As an entry point into the American telephone network for foreign callers, gateway providers and the service providers that accept calls from the gateway providers are in a unique position to arrest the flow of harmful scam calls and illegal robocalls. Many illegal robocalls, especially the worst scam calls, originate overseas and are passed through U.S. gateway providers to complicit intermediary providers and then transmitted to American telephones."

That's not to say there hasn't been progress. Pressure to force wireless carriers to speed up deployment of technology that can help block robocallers who spoof their phone numbers (like SHAKEN/STIR) have netted some results. But we're still drowning in robocalls thanks to loophole-filled rules, inconsistent oversight, a corrupted court system, and a generalized fear of holding large, legitimate robocallers accountable for doing too little to protect their customers. Truly fixing the problem will require doing something U.S. policymakers don't like doing: holding larger companies accountable for failure, and crafting laws that aren't utterly polluted and defanged by lobbyist influence.

Filed Under: fcc, robocalls, scams, spam, tcpa, telemarketers

The VPN Is On Everybody's Shitlist After Years Of Scammy Providers And Empty Promises

from the it's-not-magic dept

The high number of scammy providers and overall rise in encryption appears to have turned the public sentiment against virtual private network (VPN) VPNs, and whether most consumers actually even need one. As privacy scandals and hacks grew over the last decade, VPNs quickly emerged as a sort of mystical panacea, that could protect you from all harm on the internet. Of course, this resulted in a flood of VPN competitors who were outright scams, made misleading statements about what data is collected, or failed to protect consumer data.

The end result is a new trend in the press where about once a month we get a new story informing you that you probably don't actually need a VPN. NBC News was the latest last week, pointing out that VPNs aren't the panacea many people seem to assume:

"Most commercial VPNs are snake oil from a security standpoint,” said Nicholas Weaver, a cybersecurity lecturer at the University of California, Berkeley. “They don’t improve your security at all."

Scammy VPN providers are a major reason for the shift. A Consumer Reports study last month took a look at 16 top VPN providers, and found that the majority of them misrepresented their products or their data retention practices, and many of the companies actually put consumer privacy at greater risk. Only a quarter of the VPNs looked at clearly indicated how long they retain user browsing and other data. The gold rush and regulatory apathy created an environment where the industry's floorboards rotted out below it, creating products that actually put consumer privacy and security at greater risk.

Granted simple technical innovation is another reason why the VPN is no longer deemed essential. Most browsers implemented HTTPS, making the dreaded (and frankly often unlikely) scenario whereby a nearby coffee shop hacker hijacks the entirety of your finances no longer as much of a threat. There's also (much to the chagrin of total surveillance fans in intelligence and law enforcement) greater encryption overall, and a parade of browser extensions and plugins that can help provide additional security. Now, you're far more likely to be subject to a basic human engineering phishing attack, which a VPN won't help with:

"Users now need to worry far less about being hacked by a fellow coffee shop patron than by a hacker simply sending an email from anywhere around the world to trick them into giving up their passwords and other sensitive information, she said.

Hackers “would likely do a phishing attack on you before they would walk into a cafe with free Wi-Fi,” Hancock said. “Sending people nefarious emails, it’s much easier to do that kind of campaign. Those have been tried and true, unfortunately,” she said."

That's not to say VPNs don't still have their function. The technology is still an essential security layer for governments, corporations, or others dealing with extremely sensitive information. But for many ordinary consumers, they're more trouble than they're worth, in no small part thanks to an industry that completely lost its soul at the data collection and monetization trough.

Filed Under: encryption, overhype, scams, security, vpn

Another Example Of How The Playing Field Is Tilted In Favor Of Copyright Owners

from the copyright-abuse dept

It's widely known that artists of all kinds often get a raw deal from the contracts they sign. But this kind of legal unfairness is not the only danger they face: copyright can also be turned against creators in other, illegal ways. For example, according to a report on MarketWatch:

Two men have been charged with allegedly running a years-long music royalty scam, in which they collected more than $20 million in payments from YouTube, by falsely claiming to hold the rights to 50,000 Spanish-language songs. 

Things began back in 2017, when the two men allegedly:

approached a third-party royalty management firm identified in court papers only by the initials A.R., falsely claiming to control the royalty rights to the songs. In some cases, Teran and Batista used forged notes from artists claiming they had the rights to manage the music, prosecutors said.

The men allegedly signed a contract with the management firm. Working with an established player seems to have given the accused credibility with YouTube, which then paid them royalties – an astonishing $20 million over the next few years according to the prosecutors. According to court documents, it seems that none of this was passed on to the artists concerned. In addition, YouTubers are alleged to have lost out when their uploads were falsely marked as infringing, and then used to generate income for the accused.

Assuming the details of this case are confirmed during the trial, they show how the digital copyright system takes on trust claims to ownership, if made in the right way – in this case, through an established royalty management firm. That trust contrasts strongly with a widespread reluctance by companies to recognize that people may be able to draw on copyright exceptions when they make copies, and a readiness to assume that it must be an infringement. It's another example of how the playing field is tilted strongly in favor of copyright owners, and against ordinary citizens.

Originally published to the Walled Culture blog.

Filed Under: copyright, royalties, scams
Companies: youtube

Copyright Scammers Getting More Sophisticated, Just As The US Is About To Make It Easier For Them

from the giving-more-power-to-the-scammers dept

Back in May, we wrote about the growing number of pure copyright scammers, using completely made up claims of copyright infringement as a form of a phishing technique. As I mentioned in a comment, we get multiple such messages every week here at Techdirt -- with almost identical comments being placed (or attempted at least -- since our spam filter seems to have caught all or most of them) on various Techdirt articles claiming infringement. They always came with a link to "the evidence," (which we never clicked of course).

These scams are different than standard copyright trolling, in which there may even be a kernel of truth in the initial copyright claim. Here, the scammers are just phishing for logins or other private data, and using the ridiculously overbroad power of copyright statutory damages to frighten people into coughing up the information. And, not surprisingly, the scam is evolving. Sophos recently reported that it's now seeing scammers sending the copyright threats with phone numbers to call, rather than phishing links.

In this case, the crooks are deliberately avoiding using a “call to action” link that leads to a fake login page or an unlikely domain name, which could easily be blocked by cybersecurity products or even by your browser.

They’ve copied a trick that tech support scammers have been using for years, and that some ransomware scammers have recently adopted, namely giving you a toll-free phone number to call for “help”.

Given that the call is free, and given that phoning up doesn’t directly expose your computer or your browser to fake websites or booby-trapped downloads…

…it feels as though dialling the number ought to be a low-risk option by means of which you can quickly find out whether this is a scam or not.

All we can say is, “Don’t do it!”

Never feel bullied, pressurised, lured, seduced or cajoled into contacting someone you don’t know on their say-so.

Remember that the crooks at the other end of the phone line in this case are almost certainly not in the US, even though the contact number is directed via a US tollfree service.

And these scammers take calls like this for a living, so they know every trick in the social engineering book.

The best that can happen if you do call back is that you will reveal nothing about yourself that you didn’t mean to; the worst is that you might just blurt out something you later wish you hadn’t.

Of course, what's really concerning about all this is that, very soon, these scammers will have another tool to use to intimidate people. At the end of this year, the Copyright Office is supposed to be launching the Copyright Claims Board, the key part of the CASE Act that Congress slipped into a "must pass" government funding bill at the end of last year.

Defenders of the CASE Act insisted that the system can't be abused, because it includes an "opt-out." We've already detailed why that's not going to work -- but it also ignores that not all abuse actually involves using the system in the first place. Instead, merely threatening people with taking them to the Copyright Claims Board will almost certainly be added to the playbook of these scammers. Since there will be news articles and coverage about the CCB and what it means for people, it will feel that much more "legitimate" to potential victims of these scammers.

Filed Under: copyright, dmca, links, phishing, phone calls, scammers, scams

US Telecoms Keep Getting Wrist Slaps For Repeatedly Ripping Off The US Government

from the we're-not-actually-fixing-the-problem dept

You may have to squint to see it, but tell me if you can detect the faint outline of a pattern here.

Last year, AT&T and Verizon paid $116 million to settle allegations they'd been ripping off state government agencies for more than a decade. Last March, an AT&T whistleblower stated that AT&T had been ripping off US schools for just as long, and that he was summarily fired when he brought that to the attention of his superiors (there's been no meaningful government inquiry into his claims). And this week, AT&T was required to strike a $1.5 million penalty to settle a lawsuit (pdf) accusing the company of, you guessed it, ripping off the local DC government for years. From the DC AG announcement:

"Today’s settlement resolves a lawsuit by the Office of the Attorney General (OAG) against AT&T for allegedly submitting false invoices that did not comply with contract requirements to provide cost optimization and the most cost-effective telecommunications plans available. Instead, AT&T knowingly invoiced the District for features, add-ons, and other services that failed to comport with this mandate, causing millions in improper charges that were paid with taxpayer funds."

You know, basically the same way AT&T treats its residential broadband and TV customers.

In many of these deals, the settlement itself barely comes close to actually covering the amount of money AT&T made ripping off governments and taxpayers. And the companies don't have to actually admit to any wrongdoing. Other times, nothing happens at all. In 2016, the Obama FCC attempted to fine AT&T $106,425 for repeatedly overcharging two school districts in Florida, only to have that inquiry gutted when Trump and Ajit Pai came to town. The FCC would have much of its consumer protection authority gutted by the Trump administration, at direct lobbyist behest, one year later.

While we like to insist the US isn't a corrupt mess, we've built a system where accountability, when it actually happens, is usually just viewed as a minor pest and the cost of doing business. To hold AT&T properly accountable you'd need government policies that encourage competition in consumer and government service broadband, better antitrust enforcement and tougher merger review, properly funded and empowered regulators, and lawmakers genuinely interested in consumer protection and fraud prevention, all things we're very much not doing consistently. In part because AT&T is politically powerful and doles out plenty of campaign contributions, but also because it's tethered to our intelligence and law enforcement systems.

That's not to say some regulators and governments haven't tried all the same. In just the last five years or so AT&T has been fined $18.6 million for helping rip off programs for the hearing impaired; fined $10.4 million for ripping off a program for low-income families; fined $105 million for helping "crammers" by intentionally making such bogus charges more difficult to see on customer bills; and fined $60 million for lying to customers about the definition of "unlimited" data. Again it's subtle, but maybe you see a pattern here?

In nearly every instance regulators will pat themselves on the backs for issuing "record" fines. But once these efforts wind their way through litigation, most of these fines are usually reduced, if not eliminated altogether. And they're collectively still a pittance compared to the money AT&T makes from being a natural monopoly across vast swaths of the country. But instead of directly targeting telecom monopolization and the rampant state and federal corruption that protects it from change, competition, and accountability, we dole out a parade of wrist slaps and then pat ourselves on the back for a job well done.

Filed Under: false invoices, fcc, ftc, governments, overcharging, rip offs, scams, subsidies
Companies: at&t, verizon

Content Moderation Case Study: Craigslist Implements Phone Verification To Fight Spam; Spammers Fight Back (2008)

from the spam-takes-many-forms dept

Summary: Craigslist -- the online marketplace that pretty much still looks the way it looked when it went live all the way back in 1995 -- has the same problems every online marketplace has: spammers and scammers.

The battle against people seeking to abuse the system has been ongoing since the site's inception, but in 2008, Craigslist implemented a new control measure that temporarily stymied spammers who had found several ways to beat the systems previously employed by the online market.

To mitigate spam and limit the effectiveness of scam operations, Craigslist began requiring a phone number for verification on certain postings. This posed a problem for spammers hoping to engage in mass distribution of their "offerings" since it was unlikely any spammer or scammer would want to have their personal phone tied to their illegitimate (if not actually illegal) operations. When an ad was submitted to Craigslist, the site's automated verification process would call the ad poster to relay a one-time code that would permit the listing to be posted.

That wasn't the end of this new weapon against spammers deployed by Craigslist. If successfully-posted ads were subsequently flagged by other users as spam/scams, the phone number associated with the ad placement would be blocked.

This led to a pitched battle between Craigslist and scammers/spammers who were interested in exploiting the market's reach. A long discussion on a message board frequented by spammers suggested several workarounds to avoid the countermeasures implemented by Craigslist. (To give you some idea how far back this discussion goes, there are recommendations for utilizing pay phones.)

Some suggested using a method favored by drug dealers and other criminal conspirators: burner phones. This was an admittedly-expensive workaround for a business model that requires hundreds of views to attract a few paying victims.

Others suggest buying subscriptions to online spam enablers -- ones that provided users with tons of disposable numbers without the expense of buying new phones every time a phone number was rendered unusable.

Many of these suggestions were rejected by forum members, which suggests spam is only profitable when costs hover near $0. Some members speculated Craigslist was eliminating even more options by rejecting any numbers linked to VoIP services -- the cheapest option for aspiring scammers. No solution appeared to work for everyone, strongly suggesting the phone verification move by Craiglist at least temporarily put a dent in scammers' efforts.

Decisions to be made by Craigslist:

• Should reputation damage control (i.e., preventing being known as a host for scams/spam) be prioritized over customer growth (limiting entry barriers like phone verification requirements)?
• Does Craigslist have the funding and/or personnel to add human moderators to the verification process?
• Should users who are willing to verify their identities be given more credence when reporting ads that may lead to blacklisting of other users?

• Does requiring a phone eliminate users create a new barrier for entry that may push legitimate users to competing services?
• Does blacklisting numbers linked to reported ads limit the spread of spam? Or can it help spammers willing to report other spam artists to solidify their control of the market? 

Craigslist still uses phone verification for certain posts, limiting users to three verification calls a day to each account, which cannot be triggered more than once every five minutes. VoIP numbers are still forbidden to be used for verification calls, which unfortunately impacts some legitimate users with no other phone options.

Originally published to the Trust & Safety Foundation website.

Filed Under: content moderation, scams, spam
Companies: craigslist

Senator Mark Warner Doesn't Seem To Understand Even The Very Basic Fundamentals Of Section 230 As He Seeks To Destroy It

from the this-is-astounding dept

On Monday morning, Protocol hosted an interesting discussion on Reimagining Section 230 with two of its reporters, Emily Birnbaum and Issie Lapowsky. It started with those two reporters interviewing Senator Mark Warner about his SAFE TECH Act, which I've explained is one of the worst 230 bills I've seen and would effectively end the open internet. For what it's worth, since posting that I've heard from a few people that Senator Warner's staffers are now completely making up lies about me to discredit my analysis, while refusing to engage on the substance, so that's nice. Either way I was curious to see what Warner had to say.

The Warner section begins at 12 minutes into the video if you want to just watch that part and it's... weird. It's hard to watch this and not come to the conclusion that Senator Warner doesn't understand what he's talking about. At all. It's clear that some people have told him about two cases in which he disagrees with the outcome (Grindr and Armslist), but that no one has bothered to explain to him any of the specifics of either those cases, or what his law would actually do. He also doesn't seem to understand how 230 works now, or how various internet websites actually handle content moderation. It starts out with him (clearly reading off a talking point list put in front of him) claiming that Section 230 has "turned into a get out of jail free card for large online providers to do nothing for foreseeable, obvious and repeated misuse of their platform."

Um. Who is he talking about? There are, certainly, a few smaller platforms -- notably Gab and Parler -- that have chosen to do little. But the "large online platforms" -- namely Facebook, Twitter, and YouTube -- all have huge trust & safety efforts to deal with very difficult questions. Not a single one of them is doing "nothing." Each of them has struggled, obviously, in figuring out what to do, but it's not because of Section 230 giving them a "get out of jail free card." It's because they -- unlike Senator Warner, apparently -- recognize that every decision has tradeoffs and consequences and error bars. And if you're too aggressive in one area, it comes back to bite you somewhere else.

One of the key points that many of us have tried to raise over the years is that any regulation in this area should be humble in recognizing that we're asking private companies to solve big societal problems that governments have spent centuries trying, and failing, to solve. Yet, Warner just goes on the attack -- as if Facebook is magically why bad stuff happens online.

Warner claims -- falsely -- that his bill would not restrict anyone's free speech rights. Warner argues that Section 230 protects scammers, but that's... not true? Scammers still remain liable for any scam. Also, I'm not even sure what he's talking about because he says he wants to stop scamming by advertisers. Again, scamming by advertisers is already illegal. He says he doesn't want the violation of civil rights laws -- but, again, that's already illegal for those doing the discriminating. The whole point of 230 is to put the liability on the actual responsible party. Then he says that we need Section 230 to correct the flaws of the Grindr ruling -- but it sounds like Warner doesn't even understand what happened in that case.

His entire explanation is a mess, which also explains why his bill is a mess. Birnbaum asks Warner who from the internet companies he consulted with in crafting the bill. This is actually a really important question -- because when Warner released the bill, he said that it was developed with the help of civil rights groups, but never mentioned anyone with any actual expertise or knowledge about content moderation, and that shows in the clueless way the bill is crafted. Warner's answer is... not encouraging. He says he talked with Facebook and Google's policy people. And that's a problem, because as we recently described, the internet is way more than Facebook and Google. Indeed, this bill would help Facebook and Google by basically making it close to impossible for new competitors to exist, while leaving the market to those two. Perhaps the worst way to get an idea of what any 230 proposal would do is to only talk to Facebook and Google.

Thankfully, Birnbaum immediately pushed back on that point, saying g that many critics have noted that smaller platforms would inevitably be harmed by Warner's bill, and asking if Warner had spoken to any of these smaller platforms. His answer is revealing. And not in a good way. First, he ignores Birnbaum's question, and then claims that when Section 230 was written it was designed to protect startups, and that now it's being "abused" by big companies. This is false. And Section 230's authors have said this is false (and one of them is a colleague of Warner's in the Senate, so it's ridiculous that he's flat out misrepresenting things here). Section 230 was passed to protect Prodigy -- which was a service owned by IBM and Sears. Neither of those were startups.

Birnbaum: Critics have said that small platforms and publishers will be disproportionately harmed by some of these sweeping Section 230 reforms, including those contained within your bill. So did you have an ongoing conversation with some of those smaller platforms before the bill was introduced? Are you open to any changes that would ensure that they are not disproportionately harmed while Facebook just pays more, which they can afford?

Warner:Section 230 in the late '90s was then about protecting those entrepreneurial startups. What it has transformed into is a "get-out-of-jail-free" card for the largest companies in the world, to not moderate their content, but frankly, to ignore repeated misuse abuse in a way that we've tried to address.

What an odd way to respond to a question about smaller websites -- to immediately focus on the largest companies, and not ever address the question being raised.

Lapowsky jumps in to point out that Warner is not answering the question, and that to just focus on the (false) claim that the "big tech" platforms use 230 as a "get out of jail free card" ignores all the many smaller sites who use it to help deal with frivolous and vexatious litigation. Lapowsky follows that up by noting, correctly, that it's really the 1st Amendment that protects many of the things that Warner is complaining about, and that Section 230 has the procedural benefits that help get such cases kicked out of court earlier. Her question on this is exactly right and really important: Facebook and Google can spend the money to hire the lawyers to succeed on 1st Amendment grounds on those cases. Smaller platforms (like, say, ours) cannot.

Warner, looking perturbed, completely misses the point, and stumbles around with a bunch of half sentences before finally trying to pick a direction to go in. But one thing Warner does not do is actually answer Lapowsky's question. He just repeats what he claims his law will do (ignoring the damage it will actually do). He also claims that the law is being used against the wishes of the authors (the authors have explicitly denied this). He also claims -- based on nothing -- that the courts have "dramatically expanded" what 230 covers, and that other lawmakers don't understand the difference between the 1st Amendment and 230.

And then things go completely off the rails. Lapowsky pushes back, gently, on Warner's misunderstanding of the point and intent of 230, and Warner cuts her off angrily, again demonstrating his near total ignorance of the issue at hand and refusing to address her actual point, but just slamming the table insisting that the big companies are somehow ignoring all bad stuff on their websites. This is (1) simply not true and (2) completely unrelated to the point Lapowsky is making about every other website. What's incredible is how petulant Warner gets when asked to defend just the very basics of his terrible law.

Lapowsky: There's also another part of your bill, though, that deals with affirmative defense requirements. And the idea is basically so defendants couldn't just immediately fast track to the 230 defense to get cases quickly dismissed. And this is something a lot of critics say, effectively, guts the main purpose of Section 230 protections. So tell me a little bit about why you introduced this requirement.

Warner: Are you saying that the original intent of Section 230 was to in a sense, wipe away folks' legal rights?

Lapowsky: Not the intent, but certainly—

Warner: But if we're gonna go back to the intent of the legislation, versus the way the courts have so dramatically expanded what was potentially the original intent, I think it's one of the reasons why we're having this debate. And candidly, some policymakers may not be as familiar with the nuance and the differential between First Amendment rights, which we want to stand by and protect, and what we think has been the misuse of this section and the over-expansion of the court's rulings. We want to draw it back in and to make sure that things that are already illegal — like for example, illegal paid scams that take place on a lot of these platforms, I actually think there should be an ability to bring a suit against those kinds of illegal scams. The idea that you can flash your "get-out-of-jail" Section 230 card up front, before you even get to the merits of any of those discussions, I just respectfully think ought to not be the policy of the United States.

Lapowsky: My understanding of the intent was that this was a bill that was meant to encourage good faith efforts to moderate content, but also protect companies when they get things wrong, when they don't catch all the content or when they take something down that they shouldn't have. And obviously, this was written at a time when the internet—

Warner: Can I just ask, are you saying that Section 230 has reinforced good faith intent on moderation? Again, if that's your view of how it's been used by the large platforms, we just have a fundamental disagreement. I think Section 230 has been used and abused by the most powerful companies in the world.

Lapowsky: I wouldn't—

Warner: [They've been allowed] to not act responsibly, and instead it has allowed whether it's abuse of civil rights, abuse of individuals' personal behaviors as in the Grindr case, whether it's for large platforms to say, "Well, I know this scam artist is paying me to put up content that probably is ripping people off, but I'm going to use Section 230 as a way to prevent me from acting responsibly and actually taking down that content." So if you don't believe those things are happening, then that's a position to have, again, respectfully, I would just fundamentally disagree with you.

Lapowsky: It's not my position—

Warner: Emily, are there other questions? I thought we were gonna hear from a variety of questions. I'm happy to do this debate but I thought that—

There's so much to comment on here. First, Lapowsky is asking a specific question that Warner either does not understand or does not want to answer. She's pointing out, accurately, what 230 actually does and how it protects lots and lots of internet users and sites, beyond the "big" guys. And Warner is obsessing over some perceived problem that he fundamentally does not seem to understand. First of all, no large online platform wants scammers on their website. They don't need to hide behind Section 230, because public pressure in the form of angry users, journalists exposing the bad behavior, and just common sense has every major online site seeking to take down scams.

Warner's bill doesn't do anything to help in that situation other than make sure that if a smaller platform fucks up and misses a scammer, then suddenly they'll face crippling liability. The big platforms -- that Warner is so sure are doing nothing at all -- have massive trust and safety operations on the scale that no other site could possibly match. And they're going to miss stuff. You know why? Because that's the nature of large numbers. You're going to get stuff wrong.

As for the Grindr case, that actually proves the opposite point. The reason the Grindr case was a problem was not that Grindr fucked up, but that law enforcement ignored Matthew Herrick's complaint against his vengeful ex for too long. And eventually they got it right and arrested his ex who had abused Grindr to harass Herrick. Making Grindr liable doesn't fix law enforcement's failures. It doesn't fix anything. All it does is make sure that many sites will be much more aggressive in stifling all sorts of good uses of their platform to make sure they don't miss the rare abusive uses. This is fundamentally why 230 is so important. It creates the framework that enables nearly every platform to work to minimize the mistakes without fearing what happens if they get it wrong (exactly as Lapowsky pointed out, and which Warner refuses to address).

At this point, Lapowsky again tries to explain in more detail what she's asking, and a clearly pissed off Warner cuts her off, ignores her and turns to the other reporter, Birnbaum, to ask if she has any other questions for him, snottily noting that he expected questions from listeners. Lapowsky tries again, pointing out that she thinks it's important to hear Warner respond to the actual criticisms of his bill (rather than just repeating his fantasy vision of what is happening and what his bill does).

Finally, Lapowsky is able to raise one of the key problems we raised in our article: that the SAFE TECH Act, by wiping out 230 protections for any content for which money exchanges hands, is way too broad and would remove 230 for things like web hosting or any kind of advertising. Warner goes on a long rambling rant about how he thinks this should be debated around conference tables as they "iterate," but then also says that the companies should be forced to come to hearings to defend their content moderation practices. Then, rather than actually responding to the point that the language is incredibly broad, he immediately focuses in on one extreme case, the Armslist case, and demands to know Lapowsky's view on what should happen with that site.

But... notice that he never actually answers her question about the incredibly broad language in the bill. It's incredibly ridiculous to focus on an extreme outlier to defend language that would basically impact every website out there by removing any 230 protections for web hosts. This is the worst kind of political grandstanding. Take one extreme example, and push for a law that will impact everyone, and if anyone calls you on the broad reach, just keep pointing at that extreme example. It's disgusting.

At the end, Warner states that he's open to talking to smaller platforms, which is kind of laughable, considering that his staffers have been going around trashing and lying about people like myself that have pointed out the problems with his bill.

Either way, the interview makes clear that Warner does not understand how content moderation works, or what his bill actually does. Clearly, he's upset about a few extreme cases, but he doesn't seem to recognize that in targeting what he believes are two bad court rulings, he would completely upend how every other website works. And when pushed on that, he seems to get angry about it. That's not a good way for legislation to be made.

Filed Under: 1st amendment, big tech, civil rights, content moderation, emily birnbaum, free speech, intermediary liability, issie lapowsky, mark warner, safe tech act, scams, section 230

Appeals Court Affirms $1.5 Million Restitution Judgment Against Paul Hansmeier

from the kent,-i'd-be-lying-if-i-said-my-law-firm-wasn't-committing-crimes... dept

The long saga of Paul Hansmeier -- one of the Prenda Law Firm partners who turned the already-shady business of copyright infringement lawsuits into a rolling debacle composed of fraud, extortion, and catastrophic failures -- has produced another coda.

Hansmeier got into the copyright enforcement business thinking it would produce a steady stream of easy cash. He and his associates went after people who allegedly downloaded porn, thinking that people would pay anything asked to avoid having their sexual predilections exposed to friends, family, and the public at large.

When that didn't work as well as Hansmeier had hoped, he went further. He and his associates produced their own porn (but didn't star in it, thankfully) and served it up to piracy services in order to produce a steady stream of defendants. (These home productions were never made available for legal viewing. They only existed as lawsuit bait.) It all ended in a criminal indictment and a guilty plea by Hansmeier, who had recently branched out into ADA trolling in his home state of Minnesota.

That brings us to the Eighth Circuit Court of Appeals, which has affirmed everything Hansmeier wishes wasn't happening to him, like his 168-month prison sentence for fraud and money laundering and a $1.5 million restitution order.

The court recounts the sordid details of the long-running scam, including the numerous shell companies created to hide the origin of copyrighted films, as well as the profits (and losses) of the law firm supposedly representing a handful of porn-producing clients. It details the use of "ruse defendants" to avoid courts' limitation of discovery requests after judges started figuring out just how shady Hansmeier and Prenda Law were. What began as sanctions and subpoena denials slowly and steadily turned into disciplinary action from state bars and, finally, a criminal investigation that resulted in guilty pleas by both Hansmeier and his partner, John Steele.

Hansmeier doesn't want to be on the hook for $1.5 million in restitution. But the Appeals Court [PDF] doesn't see anything that warrants a reversal of the lower court's order. As it points out, Hansmeier still comes out ahead, even after being ordered to pay back $1.5 million of his illegal takings.

Based on his review of Hansmeier and Steele’s financial documents, Agent Kary estimated that, between 2010 and 2013, the alleged infringers Hansmeier and Steele targeted paid over $6 million total in settlements. Agent Kary then summarized a spreadsheet the FBI created to estimate the proper restitution amount. The spreadsheet did not include all of the settlement money that came in over this time period. Rather, it was limited to payments made after April 2011, which is when there was evidence that Hansmeier and Steele posted to file-sharing websites a movie to which they held the copyright—in other words, when, under the government’s theory, their fraud scheme began—and to payments that he could link to specific victims. Based on these parameters, he calculated a restitution figure of $1,541,527.37.

The Appeals Court notes Hansmeier's actions didn't just screw over internet users and defraud Prenda's clients and partners. The fraud also affected the courts handling Prenda's copyright cases. Had judges known what Hansmeier was engaged in, they would have rejected discovery requests and handed down sanctions even sooner than they already did.

It does, however, reject the government's argument that Hansmeier waived his right to appeal the judgment. The court says he can appeal. But it ultimately doesn't matter. The figure derived from the government's inspection of Hansmeier's criminal activity is as close to accurate as it gets without straying from the "actual loss" guidelines. As noted above, the government was able to find documentation for $6 million in possibly fraudulently obtained settlements. The court only ordered the return of a quarter of this amount. That's good enough for the Eighth Circuit, which says Hansmeier gets to keep serving his time and watch whatever assets he has left start getting liquidated to pay off this order.

Here, the government met its burden of showing by a preponderance of the evidence that the $1,541,527.37 loss total was attributable solely to settlement payments from the fraud scheme. [...] In coming to his final loss amount, Agent Kary included only settlement payments from April 2011 on, when Hansmeier and Steele directed an associate to upload a movie called Sexual Obsession, which they held the copyright to and which they used in their fraudulent lawsuits, to file sharing websites. Agent Kary explained that Sexual Obsession became the “go-to movie as far as gaining settlements from individuals.” He said that other movies were not a “significant” source of profit from that point on, constituting just “a few [payments] trickling in here and there.” Considering this information, the district court characterized potential payments from “legitimate” lawsuits over this period as making up no “more than potentially a negligible amount” of the money Hansmeier and Steele received.

Even more narrowing of the amount followed. But the smoking gun here is Hansmeier's own testimony, which is perhaps more damning than the results of the government's investigation. Even with this in play, Hansmeier is still only "out" half of what he took from others illegally.

Finally, Hansmeier himself acknowledged in his plea agreement that, between 2011 and 2014, he and Steele “received more than $3,000,000 in fraudulent proceeds” from their lawsuits.

The $1.5 million judgment stands. The man who helped ruin the lives of dozens of people will have to continue to deal with his multiple self-inflicted wounds. Hopefully, he'll be a cautionary tale that will dissuade future IP enforcement opportunists from engaging in litigation-adjacent get-rich-quick schemes that defraud the public and the court systems their tax dollars pay for.

Filed Under: ada trolling, copyright trolling, extortion, john steele, paul hansmeier, scams
Companies: prenda, prenda law

SafeSpeed Executive Charged With Bribing Cook County Officials For Red Light Camera Contracts

from the safe-bet dept

In January of this year, we discussed how the Illinois Comptroller had decided to opt out of collecting red light camera fees for motorists ticketed by these automated revenue generators. Susan Mendoza said in a statement that while her office was taking this action due to the feds investigating the contractor for the cameras, a company called SafeSpeed, it was also her position that red light cameras were revenue generators with little efficacy at impacting public safety.

All very true... but about that federal investigation.

Omar Maani, a former co-owner of politically-connected red light camera company SafeSpeed, has been charged with scheming with a former high-ranking Cook County official to bribe the relative of an Oak Lawn village trustee in order to install new red light cameras in the southwest suburb.

Maani is charged with one count of bribery conspiracy in a two-page document known as a “criminal information,” which is typically used in cases [w]here the defendant intends to plead guilty.

If true, such a guilty plea and quick conviction would lay bare the truth that red light cameras for years have been used to bilk money from taxpaying citizens to fill the coffers of both state governments and the contractors those governments work with. In this specific instance, the accusations against Maani suggest fairly brazen behavior. Maani is accused of attempting to pay a close family member of trustee from a Chicago suburb in exchange for installing SafeSpeed cameras in the city. While that is good old fashioned Chicago area politics, it's also textbook bribery.

And if you might think this was some one-off scheme, it came about in coordination with the chief of staff for Cook County's Commissioner, Patrick Doherty, among others.

In February, Doherty was indicted on two counts of bribery and one count of conspiracy to defraud, accused of conspiring with a fellow SafeSpeed sales agent and one of the company’s owners to pay $4,000 in bribes to the relative of an Oak Lawn village trustee, in exchange for influencing that trustee to help approve the installation of additional cameras.

The charges against Doherty came about two weeks after former Illinois State Sen. Martin Sandoval pleaded guilty to taking $70,000 in bribes to act as a “protector” for red light camera company SafeSpeed. Sandoval said he agreed to take bribes in exchange for blocking proposed legislation to ban red light cameras.

This again should lay to rest what the purpose of red light cameras is: revenue generation. They aren't about safety. They aren't about the law. They aren't about influencing driving habits. They are about money, full stop.

Which is why they should not exist.

Filed Under: bribery, cook county, omar maani, patrick doherty, red light cameras, scams
Companies: safespeed