On August 30th, the Illinois Attorney General filed a lawsuit against a telecommunications company for allegedly switching several consumers’ long distance providers without the proper authorization, a practice commonly known as “slamming.”
It’s likely you or someone you know has been slammed at some point. In the Illinois case, the company allegedly targeted Hispanic consumers and made fraudulent audio recordings that appeared to record the consumer’s consent for the switch. The lawsuit alleges the voice on the recording was not always the consumer’s and the name on the recording did not always match the consumer’s name. As consumers, we must watch out for crooked carriers, but even legitimate carriers can get in trouble if they are not informed of the federal and state laws regarding slamming.
The FCC rules were initially adopted in 1992 to address preferred interexchange carrier (PIC) changes generated through telemarketing. The rules became more aggressive over the years to take the profit out of slamming, broaden the scope to encompass all carriers, and modify requirements for the authorization and verification of preferred carrier changes. The FCC grants slamming complaints nearly every week. Many times, complaints are granted due to insufficient third party verification. The FCC’s rules require that the verification elicit, amongst other things, confirmation that the person on the call is “authorized to make the carrier change.” It is not enough to ask if the person on the call is “authorized to make changes” or “make this selection.” Verifiers must convey explicitly that the consumer is authorizing a carrier change, and not, for instance, an upgrade in existing service.
Many state carrier selection rules either adopt the FCC rules or use the FCC rules as the starting point for stricter state requirements. For instance, several states have expanded the verification requirements to include specific scripts or disclosures which must be included in the solicitation process. States have the option of administering both state and federal slamming complaints. Carriers receiving customer inquiries are required to refer the consumer to the appropriate agency – state or FCC. The bottom line on this issue is that all carriers are required to keep informed about which states have opted to administer federal slamming rules. Many of our clients have found our popular reference tool, the Preferred Carrier Change Requirements publication, has assisted them in managing these requirements and helped avoid complaints and penalties.
TMI’s Fall 2013 Regulatory Seminar for Telecom Providers and State Agency Staff is scheduled for October 24 & 25, 2013 – in Maitland, FL. Click on the button below for details.