FCC Reaches Historic $40.5 Million Settlement with TRS Provider over Alleged Violations of the IP CTS Rule

On December 3, 2021, the Federal Communications Commission (“FCC” or “Commission”) entered into a Consent Decree with CaptionCall, LLC — an Internet Protocol Captioned Telephone Service (“IP CTS”) provider — and its parent company, Sorenson Communications, LLC, to resolve investigations into CaptionCall’s alleged non-compliance with the Commission’s Telecommunications Relay Services (“TRS”) rules. The Commission’s Enforcement Bureau found that CaptionCall violated applicable FCC TRS rules by providing incentives to hearing health professionals to refer users for service, reporting costs associated with these unlawful practices to the TRS Fund Administrator for reimbursement, and failing to collect, from each user, documentation required to validate identity and attest to the user’s eligibility to use IP CTS. Under the Consent Decree, CaptionCall must implement a comprehensive compliance plan, repay $28 million to the Interstate TRS Fund (the “TRS Fund”), and pay a $12.5 million civil penalty.

The CaptionCall settlement constitutes the largest fine and recovery of improper TRS disbursements that the TRS Fund has ever secured. More importantly, however, it demonstrates that the FCC is deeply committed to protecting the TRS Fund from waste, fraud, and abuse.


TRS provide persons who are deaf, hard of hearing, deaf-blind, or have speech disabilities access to the telephone system at no cost, enabling communications with telephone users in a manner similar to other telephone users. TRS is funded through mandatory contributions to the TRS Fund by telecommunications and VoIP service providers, which typically pass these costs on to their customers. IP CTS allows a person with hearing loss to read the other party’s words during a telephone call via real-time captions using an internet-enabled device. IP CTS providers are reimbursed from the TRS Fund only for minutes handled in compliance with the Commission’s rules and that are associated with consumers who have met certain registration requirements.

The FCC has adopted numerous rules to reduce waste, fraud, and abuse associated with the TRS Fund, including prohibiting IP CTS providers from offering or providing a Hearing Health Professional any direct or indirect incentive tied to a consumer’s decision to register for or use IP CTS. IP CTS providers must also provide true and adequate data to the TRS Fund Administrator, and retain documentation supporting this data, to allow the TRS Fund Administrator and the Commission to assess the accuracy of reimbursement filings and payments.

CaptionCall Violations

The FCC’s Enforcement Bureau found that CaptionCall offered and provided incentives, including monetary contest awards, free meals, gift baskets, and gift cards, to Hearing Health Professionals for referring users to CaptionCall IP CTS and improperly reported costs associated with these wasteful practices. At times, the company’s representatives, including account managers to the Vice President of Marketing, impermissibly encouraged hearing health professionals to refer all patients to CaptionCall. The record further shows that CaptionCall had an unwritten agreement pursuant to which it paid the third-party marketer for referrals submitted to CaptionCall, up to certain limits. In some instances, senior CaptionCall managers were aware of and approved these payment arrangements. Evidence shows that the monies the third-party marketer received from CaptionCall were shared with Hearing Health Professionals through a revenue sharing arrangement.

CaptionCall’s Annual Cost Submissions filed in 2018 and 2019 show that the Company included the costs of the gift items and meals provided to encourage and reward Hearing Health Professionals for referrals, and all costs associated with the third-party marketer, in its requests for compensation from the TRS Fund. CaptionCall also included all costs associated with marketing its IP CTS phones as a part of the reasonable costs of providing IP CTS in its Annual Cost Submissions. Under Commission orders, such phone costs are not incurred in the direct provision of IP CTS and therefore should not be included as service costs in Annual Cost Submissions to the TRS Fund Administrator.

The FCC investigation revealed that CaptionCall also failed to collect and retain required documentation evidencing its users’ eligibility to use IP CTS. In November 2019, CaptionCall voluntarily disclosed to the Enforcement Bureau a self-certification issue the company identified in July 2018. Specifically, CaptionCall determined that a “loophole” existed in its registration process with respect to obtaining written self-certifications from some users. As a result, CaptionCall could not verify that it collected valid self-certifications from a subset of users. Since February 2015, some of these users generated IP CTS minutes that were subsequently submitted to the TRS Fund Administrator for compensation in CaptionCall’s Requests for Reimbursement.

Then, only a year later, the company notified the Enforcement Bureau that during its registration process, the Company failed to collect from some users, the last four-digits of their Social Security number or for those who did not have a Social Security number, approved identity validation documentation. CaptionCall also admitted that it failed to notify its personnel of the requirement to collect alternative identity documentation only when a user lacked a Social Security number.

IP CTS and other TRS providers are strongly encouraged to learn from CaptionCall’s mistakes and to revisit their own compliance with applicable TRS rules. If your company has any questions about its TRS obligations, please contact Michal J. Nowicki at (703) 714-1311 or mjn@commlawgroup.com.

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