Robocalls Crowd Out Real Business Calls. This Startup Has an Answer.

Xconomy Seattle — 

The ways in which robocallers try to dupe us are becoming almost as plentiful as the frequency of the calls.

An unknown phone number was once all scammers needed to trick the average person into picking up the call. Now, new hoaxes are making it increasingly difficult to avoid fraud, such as the “one ring” ploy (they hang up quickly to entice you to call back) or a riff on a years-old ruse of pretending to be the Internal Revenue Service, in which fraudsters “spoof” an actual phone number of an independent organization within the IRS, getting the agency’s number to appear on the recipient’s phone.

The number of fake calls just keeps growing, too: There were 25.3 billion in in the US through the end of June of this year, up from 26.3 billion for all of 2018 and 10.2 billion in 2016, according to Hiya, a three-year-old Seattle-based spinout of Whitepages. There’s more software than ever to try to block it, from makers like Hiya, New Jersey-based RoboKiller, and Little Rock, AR-based First Orion.

“Someone told me they had done a count of the anti-spam apps and there are 500 to 600 that provide some level of functionality,” said Hiya CEO and founder Alex Algard in a phone interview.

With apps effectively warning consumers of potential spam, Americans are now avoiding picking up calls from any number they don’t recognize, only answering unknown calls 26 percent of the time, according to a twice-yearly report Hiya publishes. There’s a consequence to those unanswered calls: Businesses, which say they are trying to contact customers for legitimate purposes, are getting blocked or their calls go unanswered. That might include a pharmacy calling about a prescription or a bank wanting to warn a customer about potential credit card fraud.

Notably, that has led Hiya to develop a new business line that it launched this week. Called Hiya Connect, it lets businesses submit information to Hiya like the business name, logo, and a potential reason for calling, which will then show up if the business calls a person that has either downloaded Hiya’s app or is a customer of one of Hiya’s partners, which is currently about 90 million people, Algard said.

“It’s a nuisance to receive bad calls, but it’s also a nuisance to not pick up the good ones,” Algard said.

Otherwise, Hiya makes money through partnerships with companies like AT&T (NYSE: T) and Samsung, which pay for Hiya’s spam and call blocking services, as well as consumers who pay for caller ID through the company’s app. Hiya is able to track calls made to people who download its app, as well as to people who are customers of its partners.The company’s data science team uses that information to improve its services, develop things like a “bad caller” database, and monitor trends in robocalling. (Hiya doesn’t have any other businesses related to selling data about the call tracking, Algard said.)

The Hiya Connect service isn’t intended to filter spammers, Algard said, but instead just to help legitimate businesses avoid having their calls missed. Hiya charges these companies on a sliding scale, in part related to effectively helping those businesses get their calls answered. Users get access to a portal that includes data Hiya keeps about businesses, including a “reputation” score that rates whether they engage in spam and that Hiya’s call-blocking software uses to help decide whether to block them. A company that does spam can sign up for Hiya Connect, but its calls might be blocked if it has a bad reputation, Algard said.

Regulators are still making efforts to better regulate robocalling. Both the House and the Senate passed legislation that would do things like make it easier to penalize and go after illegal callers, while attorneys general from all 50 states announced last week they made an agreement with 12 large telecom companies to also fight it. The FTC manages the National Do Not Call Registry, and that agency and the FCC have also been active in their efforts to curtail robocalling—though many are still calling for them to do more.

Hiya has been working on limiting phone spam since it spun out of Whitepages in 2016. (Whitepages actually had a separate app also called Hiya focused on contact information and address books.) Algard founded Whitepages, which became known for its reverse phone lookup service, as a college student in the late 1990s. As the business shifted from earning its revenue from advertising to making money by charging users for premium features, Seattle-based Whitepages launched an Android app for its reverse lookup service in the late 2000s, which became popular, Algard said. Big businesses liked it, and especially liked the spam filters Whitepages offered. They wanted more, and Algard realized there might be a new company there. He decided to leave to run Hiya shortly after his 20th anniversary at Whitepages. Hiya announced an $18 million funding round in 2017 led by London-based Balderton Capital.

“We think it’s actually kind of crazy that the world’s largest network of any type, with 5 billion users, is completely open and completely unprotected against spam activity,” Algard said.