Caller ID spoofing is a service that allows a caller to masquerade as someone else by falsifying the number that appears on the recipient's caller ID display. Just as e-mail spoofing can make it appear that a message came from any e-mail address the sender chooses, caller ID spoofing can make a call appear to come from any phone number the caller wishes.
http://www.oreillynet.com/pub/a/etel/2006/10/18/solving-the-caller-id-problem.html
There is growing concern over the interaction of VoIP systems with the legacy PSTN, and the transmission of caller identity data--most notably, Caller ID on the PSTN. It is not always possible, or obvious how, to handle Caller ID data when moving to or from VoIP and the PSTN networks. There are even business models predicated on the ability of Caller ID to be transmitted to the PSTN with a value that is not "expected"; call centers are an obvious example, where customer-support staff make outbound calls with a Caller ID that may be from one of many possible clients. More troubling is the possibility that Caller ID may be used to trick unsuspecting call recipients into certain actions or beliefs, and it is this concern that's currently creating a legislative threat I believe must be averted.
I have a proposal at the end of this article that attempts to address these issues, but first some background.