[House Report 110-37]
[From the U.S. Government Publishing Office]
110th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 110-37
======================================================================
PREVENTING HARASSMENT THROUGH OUTBOUND NUMBER ENFORCEMENT (PHONE) ACT
OF 2007
_______
March 8, 2007.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Conyers, from the Committee on the Judiciary, submitted the
following
R E P O R T
[To accompany H.R. 740]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the bill
(H.R. 740) to amend title 18, United States Code, to prevent
caller ID spoofing, and for other purposes, having considered
the same, reports favorably thereon without amendment and
recommends that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 1
Background and Need for the Legislation.......................... 2
Hearings......................................................... 2
Committee Consideration.......................................... 3
Committee Votes.................................................. 3
Committee Oversight Findings..................................... 3
New Budget Authority and Tax Expenditures........................ 3
Congressional Budget Office Cost Estimate........................ 3
Performance Goals and Objectives................................. 4
Constitutional Authority Statement............................... 4
Advisory on Earmarks............................................. 4
Section-by-Section Analysis...................................... 5
Changes in Existing Law Made by the Bill, as Reported............ 6
Purpose and Summary
The purpose of H.R. 740, the ``Preventing Harassment
through Outbound Number Enforcement (PHONE) Act of 2007,'' is
to prevent and mitigate identity theft and to ensure privacy by
establishing criminal penalties for caller ID ``spoofing.'' The
bill targets spoofing by prohibiting the use of caller ID
information to commit fraud or other abusive acts. The bill
provides for felony penalties of up to five years in prison for
violations committed for commercial gain. Abusive use of
another person's caller ID information without commercial
motives is classified as a misdemeanor under the bill.
Background and Need for the Legislation
In recent years, spoofing has become more commonplace,
leading to increased security vulnerabilities and identity
theft. Spoofing involves using a false caller ID to hide the
caller's true identity in order to commit fraud or some other
abusive act. Recently, spoofing technology has become readily
available, either through the purchase of Internet telephone
equipment or through Web sites specifically set up to spoof.
For example, Voice-Over-Internet-Protocol (VOIP) equipment can
easily be configured to populate the caller ID field with
information of the user's choosing.
Since caller ID spoofing can make a call appear to come
from any phone number, it has the ability to cause damaged
credit and financial ruin. Call recipients sometimes divulge
personal and private information to the spoofer, under the
mistaken belief that it is a legitimate call. For example, the
AARP (formerly the American Association of Retired Persons) has
reported cases in which spoofers called individuals claiming
that they had missed jury duty.\1\ These individuals were told
that they would be subject to prosecution if they did not
provide their Social Security number and other personal
information. The phone number that appeared on their caller ID
was from the local courthouse, so the victims assumed that the
call was legitimate. Such incidences have been reported in at
least 15 states, including the District of Columbia.\2\
---------------------------------------------------------------------------
\1\ Sid Kirchheimer, Scam Alert: Courthouse Con, AARP Bulletin, May
2006, available at http://www.aarp.org/bulletin/consumer/courthouse--
con.html
\2\ Id.
---------------------------------------------------------------------------
In addition to identity theft, spoofing invades the privacy
of those individuals whose caller ID is used to mask fraudulent
calls, and therefore it can be used as a form of aggressive
harassment. Additionally, many business functions, from credit
card verification to automatic call routing, opt to use caller
ID for security purposes, which spoofing can render useless.
However, there are instances where caller ID information is
altered for legitimate reasons. For example, a domestic
violence shelter may alter caller ID information to ensure the
safety of domestic violence victims. In addition, in many
instances where telemarketers are hired by companies, the
caller ID information transmitted is that of the actual
company, allowing those receiving the call to have a reliable
way to call back.
Hearings
The Committee's Subcommittee on Crime, Terrorism, and
Homeland Security held one day of hearings on H.R. 740 on
February 6, 2007. Testimony was received from two witnesses:
Congressman Tim Murphy of Pennsylvania, and Barry M. Sabin,
Deputy Assistant Attorney General, Criminal Division, United
States Department of Justice.
Committee Consideration
On February 6, 2007, the Subcommittee on Crime, Terrorism,
and Homeland Security met in open session and ordered favorably
reported the bill H.R. 740, by a voice vote, a quorum being
present. On February 7, 2007, the Committee met in open session
and ordered favorably reported the bill H.R. 740, without an
amendment, by a voice vote, a quorum being present.
Committee Votes
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the Committee advises that there
were no recorded votes during Committee consideration of H.R.
740.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee reports that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives is inapplicable because this legislation does
not provide new budgetary authority or increased tax
expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 545, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, February 15, 2007.
Hon. John Conyers, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 740, the
Preventing Harassment through Outbound Number Enforcement
(PHONE) Act of 2007.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Mark
Grabowicz, who can be reached at 226-2860.
Sincerely,
Peter R. Orszag,
Director.
Enclosure
cc:
Honorable Lamar S. Smith.
Ranking Member
H.R. 740--Preventing Harassment through Outbound Number Enforcement
(PHONE) Act of 2007.
CBO estimates that implementing H.R. 740 would have no
significant cost to the federal government. Enacting the bill
could affect direct spending and revenues, but CBO estimates
that any such effects would not be significant. H.R. 740
contains no intergovernmental or private-sector mandates as
defined in the Unfunded Mandates Reform Act and would not
affect the budgets of state, local, or tribal governments.
H.R. 740 would establish a new federal crime for the
fraudulent use of caller ID information. Because the bill would
establish a new offense, the government would be able to pursue
cases that it otherwise would not be able to prosecute. CBO
expects that H.R. 740 would apply to a relatively small number
of offenders, however, so any increase in costs for law
enforcement, court proceedings, or prison operations would not
be significant. Any such costs would be subject to the
availability of appropriated funds.
Because those prosecuted and convicted under H.R. 740 could
be subject to criminal fines, the federal government might
collect additional fines if the legislation is enacted.
Criminal fines are recorded as revenues, then deposited in the
Crime Victims Fund and later spent. CBO expects that any
additional revenues and direct spending would not be
significant because of the small number of cases likely to be
affected.
Persons prosecuted and convicted under the bill also could
be subject to the seizure of certain assets by the federal
government. Proceeds from the sale of such assets would be
deposited into the Assets Forfeiture Fund and spent from that
fund, mostly in the same year. Thus, enacting H.R. 740 could
increase both revenues deposited into the fund and direct
spending from the fund. However, CBO estimates that any
increased revenues or spending would be negligible.
The CBO staff contact for this estimate is Mark Grabowicz,
who can be reached at 226-2860. This estimate was approved by
Peter H. Fontaine, Deputy Assistant Director for Budget
Analysis.
Performance Goals and Objectives
The Committee states that pursuant to clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, H.R.
740 will assist in combating caller ID spoofing, particularly
spoofing perpetrated for commercial gain.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in article I, section 8, clause 3 of the
Constitution.
Advisory on Earmarks
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 740 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(d), 9(e), or 9(f) of Rule XXI.
Section-by-Section Analysis
The following discussion describes the bill as reported by
the Committee.
Section 1. Short Title.
This section cites the short title of the bill as the
``Preventing Harassment through Outbound Number Enforcement
(PHONE) Act of 2007.''
Section 2. Caller ID Spoofing.
This section amends the Federal criminal code (Chapter 47
of title 18, Fraud and False Statements) to prohibit using or
providing, in interstate or foreign commerce, false caller ID
information with an intent to defraud. The section also
prohibits using or providing the caller ID information of an
actual person, without the person's consent, and with an intent
to deceive the recipient about the caller's identity. The
section punishes attempts or conspiracies on equal footing with
completed acts. It is important to note that it would not be an
offense under this subsection to cause caller ID information to
be blocked or withheld.
The punishment provided in this section is graduated,
reserving felony penalties for violations committed for
commercial gain, for which the prescribed punishment is a fine
and/or imprisonment for not more than 5 years. For violations
not involving commercial gain, the section provides for
misdemeanor penalties, for which the prescribed punishment is a
fine and/or imprisonment for not more than 1 year). For
example, those playing practical jokes without any commercial
motive could be subject to the misdemeanor penalties, but not
the felony penalties.
Subparagraph (c) of the section exempts from the purview of
the statute any lawful investigative, protective, or
intelligence activity of a federal, state, or local law
enforcement agency or of a U.S. intelligence agency, or any
activity authorized for the protection of witnesses in criminal
proceedings.
Subparagraph (d) provides for forfeiture by a convicted
party of the proceeds derived from the offense, along with
equipment used to facilitate the offense. The forfeiture
provision is modeled on the provision in the CAN-SPAM Act of
2003. See 18 U.S.C.A. Sec. Sec. 1037(c).
Subparagraph (e) sets forth definitions for the various
terms. The definition of ``telephone call'' includes both
conventional telephone calling and many types of Voice-Over-
Internet Protocol (``VOIP'') services.
Section 3. Other Specified Unlawful Activities for Money Laundering.
Section 3 adds the bill (section 1040 of Title 18) as well
as section 1037 of title 18 (fraud and fraud related activity
in connection with email) to the list of ``specified unlawful
activities'' in section 1956(c)(7)(D) of title 18 (the money
laundering statute). This makes certain financial transactions
involving the proceeds of these violations money laundering
offenses under 18 U.S.C. Sec. Sec. 1956 and 1957, and provides
for the civil forfeiture of such proceeds. See 18 U.S.C.
Sec. Sec. 981(a)(l)(C) (providing for the civil forfeiture of
proceeds of crimes designated as ``specified unlawful
activity''). Existing law provides that comparable crimes,
e.g., violations of 18 U.S.C. Sec. Sec. 1030 (computer fraud
and abuse) constitute specified unlawful activities.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italics and existing law in which no change is
proposed is shown in roman):
TITLE 18, UNITED STATES CODE
* * * * * * *
PART I--CRIMES
* * * * * * *
CHAPTER 47--FRAUD AND FALSE STATEMENTS
Sec.
1001. Statements or entries generally.
* * * * * * *
1040. Caller ID spoofing.
* * * * * * *
Sec. 1040. Caller ID spoofing
(a) Offense.--Whoever, in or affecting interstate or
foreign commerce, knowingly uses or provides to another--
(1) false caller ID information with intent to
defraud; or
(2) caller ID information pertaining to an actual
person without that person's consent and with intent to
deceive the recipient of a call about the identity of
the caller;
or attempts or conspires to do so, shall be punished as
provided in subsection (b).
(b) Punishment.--Whoever violates subsection (a) shall--
(1) if the offense is committed for commercial
gain, be fined under this title or imprisoned not more
than 5 years, or both; and
(2) be fined under this title or imprisoned not
more than one year, or both, in any other case.
(c) Law Enforcement Exception.--It is a defense to a
prosecution for an offense under this section that the conduct
involved was lawfully authorized investigative, protective, or
intelligence activity of a law enforcement agency of the United
States, a State, or a political subdivision of a State, or of
an intelligence agency of the United States, or any activity
authorized under chapter 224 of this title.
(d) Forfeiture.--
(1) In general.--The court, in imposing sentence on
a person who is convicted of an offense under this
section, shall order that the defendant forfeit to the
United States--
(A) any property, real or personal,
constituting or traceable to gross proceeds
obtained from such offense; and
(B) any equipment, software or other
technology used or intended to be used to
commit or to facilitate the commission of such
offense.
(2) Procedures.--The procedures set forth in
section 413 of the Controlled Substances Act (21 U.S.C.
853), other than subsection (d) of that section, and in
Rule 32.2 of the Federal Rules of Criminal Procedure,
shall apply to all stages of a criminal forfeiture
proceeding under this section.
(e) Definitions.--In this section--
(1) the term ``caller ID information'' means
information regarding the origination of the telephone
call, such as the name or the telephone number of the
caller;
(2) the term ``telephone call'' means a call made
using or received on a telecommunications service or
VOIP service;
(3) the term ``VOIP service'' means a service
that--
(A) provides real-time 2-way voice
communications transmitted using Internet
Protocol, or a successor protocol;
(B) is offered to the public, or such
classes of users as to be effectively available
to the public (whether part of a bundle of
services or separately); and
(C) has the capability to originate traffic
to, or terminate traffic from, the public
switched telephone network or a successor
network;
(4) the term ``State'' includes a State of the
United States, the District of Columbia, and any
commonwealth, territory, or possession of the United
States; and
(5) a term used in a definition in this subsection
has the meaning given that term in section 3 of the
Communications Act of 1934 (47 U.S.C. 153).
* * * * * * *
CHAPTER 95--RACKETEERING
* * * * * * *
Sec. 1956. Laundering of monetary instruments
(a) * * *
* * * * * * *
(c) As used in this section--
(1) * * *
* * * * * * *
(7) the term ``specified unlawful activity''
means--
(A) * * *
* * * * * * *
(D) an offense under section 32 (relating
to the destruction of aircraft), section 37
(relating to violence at international
airports), section 115 (relating to
influencing, impeding, or retaliating against a
Federal official by threatening or injuring a
family member), section 152 (relating to
concealment of assets; false oaths and claims;
bribery), section 175c (relating to the variola
virus), section 215 (relating to commissions or
gifts for procuring loans), section 351
(relating to congressional or Cabinet officer
assassination), any of sections 500 through 503
(relating to certain counterfeiting offenses),
section 513 (relating to securities of States
and private entities), section 541 (relating to
goods falsely classified), section 542 relating
to entry of goods by means of false
statements), section 545 (relating to smuggling
goods into the United States), section 549
(relating to removing goods from Customs
custody), section 554 (relating to smuggling
goods from the United States), section 641
(relating to public money, property, or
records), section 656 (relating to theft,
embezzlement, or misapplication by bank officer
or employee), section 657 (relating to lending,
credit, and insurance institutions), section
658 (relating to property mortgaged or pledged
to farm credit agencies), section 666 (relating
to theft or bribery concerning programs
receiving Federal funds), section 793, 794, or
798 (relating to espionage), section 831
(relating to prohibited transactions involving
nuclear materials), section 844 (f) or (i)
(relating to destruction by explosives or fire
of Government property or property affecting
interstate or foreign commerce), section 875
(relating to interstate communications),
section 922(1) (relating to the unlawful
importation of firearms), section 924(n)
(relating to firearms trafficking), section 956
(relating to conspiracy to kill, kidnap, maim,
or injure certain property in a foreign
country), section 1005 (relating to fraudulent
bank entries), 1006 (relating to fraudulent
Federal credit institution entries), 1007
(relating to Federal Deposit Insurance
transactions), 1014 (relating to fraudulent
loan or credit applications), section 1030
(relating to computer fraud and abuse), 1032
section 1037 (Fraud and related activity in
connection with electronic mail), (relating to
concealment of assets from conservator,
receiver, or liquidating agent of financial
institution), section 1040 (Caller ID
spoofing), section 1111 (relating to murder),
section 1114 (relating to murder of United
States law enforcement officials), section 1116
(relating to murder of foreign officials,
official guests, or internationally protected
persons), section 1201 (relating to kidnaping),
section 1203 (relating to hostage taking),
section 1361 (relating to willful injury of
Government property), section 1363 (relating to
destruction of property within the special
maritime and territorial jurisdiction), section
1708 (theft from the mail), section 1751
(relating to Presidential assassination),
section 2113 or 2114 (relating to bank and
postal robbery and theft), section 2280
(relating to violence against maritime
navigation), section 2281 (relating to violence
against maritime fixed platforms), section 2319
(relating to copyright infringement), section
2320 (relating to trafficking in counterfeit
goods and services), section 2332 (relating to
terrorist acts abroad against United States
nationals), section 2332a (relating to use of
weapons of mass destruction), section 2332b
(relating to international terrorist acts
transcending national boundaries), section
2332g (relating to missile systems designed to
destroy aircraft), section 2332h (relating to
radiological dispersal devices), section 2339A
or 2339B (relating to providing material
support to terrorists), section 2339C (relating
to financing of terrorism), or section 2339D
(relating to receiving military-type training
from a foreign terrorist organization) of this
title, section 46502 of title 49, United States
Code, a felony violation of the Chemical
Diversion and Trafficking Act of 1988 (relating
to precursor and essential chemicals), section
590 of the Tariff Act of 1930 (19 U.S.C. 1590)
(relating to aviation smuggling), section 422
of the Controlled Substances Act (relating to
transportation of drug paraphernalia), section
38(c) (relating to criminal violations) of the
Arms Export Control Act, section 11 (relating
to violations) of the Export Administration Act
of 1979, section 206 (relating to penalties) of
the International Emergency Economic Powers
Act, section 16 (relating to offenses and
punishment) of the Trading with the Enemy Act,
any felony violation of section 15 of the Food
Stamp Act of 1977 (relating to food stamp
fraud) involving a quantity of coupons having a
value of not less than $5,000, any violation of
section 543(a)(1) of the Housing Act of 1949
(relating to equity skimming), any felony
violation of the Foreign Agents Registration
Act of 1938, any felony violation of the
Foreign Corrupt Practices Act, or section 92 of
the Atomic Energy Act of 1954 (42 U.S.C. 2122)
(relating to prohibitions governing atomic
weapons)
* * * * * * *