Joint Trades' Letter to FCC on the Second Notice of Proposed Rulemaking on Illegal Text Messages

INTRODUCTION AND SUMMARY

The American Bankers Association (ABA), ACA International, American Financial Services Association, America's Credit Unions, Bank Policy Institute, Mortgage Bankers Association, and Student Loan Servicing Alliance (the Associations) appreciate the opportunity to comment on the Second Further Notice of Proposed Rulemaking (Second Further Notice) in the above-captioned proceeding.

Texts that impersonate legitimate businesses cause tremendous harm to consumers and undermine those businesses' ability to communicate with their customers. The Associations have been strong proponents of regulatory proposals intended to curb these abusive and dangerous practices. In comments submitted during this rulemaking process, our primary objective has been to ensure that actions to curb illegal automated calls and texts also seek to minimize the blocking of lawful, consented-to communications and to provide effective redress mechanisms when erroneous blocking occurs.

In comments that the Associations submitted last June, our members reported that bad actors are increasingly using text messages to impersonate banks, credit unions, and other financial services providers with intent to defraud. Those problems persist today, causing harm to these institutions and their customers. The primary method used by bad actors is to deliver Short Message Service (SMS) "phishing" text messages (or "smishing") – i.e., text messages sent from the bad actor's own phone number that purport to be from a legitimate business to induce the recipient to reveal account information or click on links that install malware on the recipient's phone. Association members continue to report that bad actors are distributing large volumes of SMS phishing messages from e-mail addresses (which convert the e-mail message toan SMS text message) and from 10-digit telephone numbers that are not associated with the businesses being impersonated. Bad actors often send these "e-mail to SMS" messages from telephone numbers that cannot accept incoming calls. These numbers are not uniquely assigned to different e-mail addresses, and therefore, they cannot easily be reported and shut down.

Illegal text messages used to commit fraud or scams cost consumers nearly $10.1 billion in 2021.5 Currently, more fraudulent texts are sent—87.8 billion in 2021, up 58 percent from 2020—than fraudulent calls placed (72.2 billion in 2021). Imposter scams—where the bad actor impersonates a bank or other legitimate business—resulted in victims losing $800 on average per scam in 2023, according to consumers' reports to the Federal Trade Commission. Illegal textsalso lead customers to question the legitimacy of the important messages that legitimate companies send, degrading our members' ability to communicate with their customers and eroding their customers' trust. The volume of text messages sent that impersonate legitimate companies—and the high financial cost to consumers who fall victim to these illegal schemes— underscore the urgency of the Commission's work to stifle the ability of bad actors to send these messages.

Our members continue to invest significant resources to protect their customers from fraudulent text messages, as well as from fraudulent e-mails and voice calls. For example, more than 2,000 banks from across the country participate in ABA's #BanksNeverAskThat antiphishing campaign to educate customers about phishing scams and how to avoid being victimized by them.

In response to the Second Further Notice, the Associations respectfully urge the Commission to take the following actions:

• Require originating providers – in addition to terminating providers – to block texts from a sender after they receive notice from the Commission that the sender is transmitting suspected illegal texts;
• Ensure that agency-mandated or voluntary text blocking identifies only texts that have a clear indicia of illegality and that this blocking is undertaken on a content-neutral,non-discriminatory basis;
• Require opt-in for text messages that originate as e-mails ("email-to-text" messages);
• Propose a rule that requires originating providers to provide access to reported "spam" texts (i.e., those texts that are forwarded to a provider via #7726 (SPAM)) to those companies who wish to use the data to find impersonation texts relevant to their company and act on that information to protect their customers;
• Require prompt and effective redress for erroneous blocking of legal texts; and
• Require text message providers to finalize standards for, and implement, text message authentication technology and protocols.

Download the joint comment letter to read the full text.