California and 24 other states on Monday asked the Federal Communications Commission to crack down harder on firms that switch customers’ long-distance carriers without their knowledge, arguing that new rules passed by the FCC a few weeks ago do not go far enough.
In a petition to the agency, attorneys general representing 25 states said the FCC must be much more aggressive in protecting consumers from long-distance carriers that engage in a practice known as “slamming.” The carriers use contests, con games and other high-pressure tactics to switch phone users from their chosen long-distance carriers without their direct consent--sometimes without any form of consent at all.
“We think the problem is widespread. . . . We have investigations right now in regards to a number of companies” we believe are involved in slamming, said Herschel Elkins, head of the consumer law section of the California attorney general’s office.
Kathleen M. H. Wallman, chief of the FCC bureau that oversees telephone regulation, said she shares the states’ concern about slamming. “We’re looking forward to hearing their views . . . " she said, “and we welcome any suggestions about how we can clarify our rules.”
Under rules adopted in 1992, the FCC requires companies trying to woo prospective customers by direct mail or other printed materials to obtain a customer’s written authorization before service can be legally switched.
For phone solicitations, the FCC requires long-distance companies to use one of four confirmation procedures, including obtaining the consumer’s written authorization or obtaining oral authorization verified by an independent third party.
New FCC rules scheduled to take effect next month would additionally require that long-distance carrier authorization forms be clearly identified and contain full translations if more than one language is involved. The forms must also be separate from any other offers or forms so as not to confuse consumers.
Many companies, including major national long-distance firms and small local operators, have found methods of circumventing the rules and switching tens of thousands of unsuspecting consumers.
Sonic Communications Inc. of Roswell, Ga., is being investigated in California for allegedly sending $10 checks offering rebates to consumers with Latino surnames. Signing the check constituted authorization for transfer of service.
While the word rebate was prominently displayed in Spanish, the other terms and conditions of the offer were written only in English, said Robert Cagen, a staff attorney for the California Public Utilities Commission.
Sonic executives did not respond to calls to their office late Monday.
While most of the companies accused of slamming are small and medium-sized operators such as Sonic, the call for tougher rules coincides with a huge advertising war between the three industry giants, AT&T;, MCI and Sprint. Critics say the advertisements frequently do little more than confuse consumers.
“Fierce competition and fierce advertising are making it increasingly difficult to choose a long-distance service,” Consumers Union said in a study of long-distance carriers released Monday. The marketing blitz, the group said, has inundated consumers with “plan after new calling plan and charge after aggressive counter-charge.”
Officially, everyone in the long-distance industry deplores slamming. But the companies are fiercely opposed to the one move that would clearly solve the problem: requiring that local telephone companies receive authorization for any changes directly from customers rather than from long-distance carriers that say they’re acting on behalf of customers.
The states also stopped short of asking for a direct-authorization requirement, which the carriers say would dampen competition throughout the industry. Among the most significant rule changes sought by the states is one that would free consumers from paying any long-distance charges if they were switched to a new carrier without authorization.
Under the new FCC rules, consumers whose service had been switched would pay the unauthorized company for long-distance calls not at inflated rates, but at rates that they would have paid their preferred long-distance company. But the states say that change does not go far enough.
“To reward the wrongdoer by allowing it to receive any benefit from its wrongful actions is contrary to long-established, equitable principles and would encourage rather than deter further slamming,” the states argued in their petition.
In addition, the states want the FCC to require that authorization forms be in the same language as promotional materials and that any check or payment be physically separate from the letter authorizing a change in phone service.
Besides California, the states seeking the rule changes are Arizona, Arkansas, Connecticut, Florida, Idaho, Illinois, Indiana, Iowa, Kansas, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New Mexico, North Carolina, Pennsylvania, Rhode Island, Tennessee, Vermont, West Virginia and Wisconsin.