August 15, 1995 in Nation/World

Curbs Sought On Phone ‘Slamming’ States Ask Fcc For Tougher Rules On Long-Distance Company Switching

From Staff And Wire Reports
 

Sebastian Dunn received a call at his Middletown, Conn., business, asking for his address. Two weeks later he got a notice that his long-distance company was being switched. After an angry Dunn fired off letters to the company and state regulators, the change never went through.

But thousands of others were not so lucky.

That’s why Idaho and 24 other states want federal regulators to give Americans greater protections from a growing problem: switching customers’ long-distance companies without their knowledge.

“It can take half a day to switch back your service,” said Wayne Hart, utilities investigator for the Idaho Public Utilities Commission. “We’ve seen phenomenal increases in complaints about this.”

Complaints in Idaho about the practice, known as “slamming,” have risen from 46 in 1992 to 138 thus far this year, Hart said. Callers indicate that nearly every long-distance carrier, including AT&T;, MCI and Sprint, participate in some form of slamming, he said.

“This is not just fly-by-night companies that are slamming,” Hart said.

“As the carriers have become more competitive, they begin to rely on telephone boiler rooms.”

Slamming is less acute in Washington, where customers have more than 250 long-distance companies to choose from, said Steve King, spokesman for the Washington Utilities & Transportation Commission. Although the commission received 113 complaints about slamming in 1994, most long-distance carriers agreed to correct the problems once contacted by regulators.

The Federal Communications Commission in June issued stricter rules against the practice, but the states said in a petition to the agency that the rules don’t go far enough.

“Obviously I was really angry,” recalled Dunn. “If you’re a careful consumer and make sure you subscribe only to the service you’ve checked out and then can be switched without your permission, it’s pretty disheartening.”

Dunn, a Sprint customer, said he received the notice to change his service from MidWats Inc. in Reno, Nev. Messages left at MidWats were not returned.

Slamming victims usually find out their preferred long-distance company has been switched when they get their monthly phone bill.

And most of them get another unpleasant surprise: They are usually charged higher rates than their regular long-distance company charges. The state attorneys general say these unauthorized charges, which they and federal regulators attempt to recover, amount to millions of dollars a year.

The states want the FCC to change its rules so that liability for such charges lies with the company making the unauthorized switch - not the consumer. That means the local phone company would remove the unauthorized charge from the consumer’s bill and charge it to the slammer.

Under the FCC’s revised rules, a person whose service has been switched must pay the unauthorized company for long-distance calls but only at the rate that his or her preferred long-distance company would have charged.

“We left open the question of whether we should go further with regard to consumer liability and we will certainly look at whatever the attorneys general have to say,” said Kathleen Wallman, chief of the FCC’s Common Carrier Bureau.

Slamming is the largest source of complaints at the FCC, accounting for more than 700 a month. Some states receive many more complaints, with Nevada logging more than 7,000 a month.

The states also want the FCC to require that promotional materials sent to prospective customers be separate from documents that would authorize a change in long-distance service.

Under the FCC’s revised rules, the materials are supposed to be separate but companies are permitted some exceptions. They can, for example, use one long sheet where the authorization form may be separated by a perforated line.

The FCC’s revised rules also let a company using a check as an inducement to also use it as the authorization form as long as this is made clear to consumers.

The states want the check and the authorization form to be separate.

Explaining the FCC’s check policy, Wallman said: “Consumers seem to generally recognize these clearly identified checks as just that and to realize that if someone is sending you a check, they want something in return.”

In addition, the states also want the FCC to require authorization forms to be in the same language as promotional materials.

Studies have shown that people whose primary language is not English are often victims of slammers.

It is illegal for a company to switch a person’s long-distance service without permission. Under rules adopted in 1992, the FCC requires companies trying to woo customers by direct mail or other printed materials to obtain an authorization form signed by the customer before service may be legally switched.

, DataTimes

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