Bill Would Impose Fines for Slamming

Legislation introduced in the Senate on Wednesday would provide for fines of up to $1 million on long-distance companies that switch consumers’ phone service without their permission.

The bill comes a day after a U.S. appeals court suspended tough new federal rules aimed at cracking down on the growing problem, known as “slamming.”

MCI WorldCom Inc. and other long-distance carriers had opposed the agency’s new rules, and had come up with their own proposal for resolving such disputes. That plan, presented to the Federal Communications Commission on March 30, called for the creation of a third-party group to handle consumer complaints about slamming.

Congress and consumer groups have been urging the FCC to do more to fight slamming after lawmakers could not agree on national legislation last year. Now the Senate’s trying again, and lawmakers want the FCC to reject the industry plan.

The FCC received more than 20,000 complaints about slamming last year, making it the single largest source of consumer complaints to the agency.

Under the proposed bill by Sen. John McCain (R-Ariz.), long-distance companies would be required to work with the FCC to develop a set of anti-slamming guidelines, and the FCC could fine companies that didn’t adhere to the rules. The bill would require the FCC to keep track of the worst violators and to fine them $1 million if the agency finds they lied about sticking to the guidelines. Co-sponsors include Sens. Olympia J. Snowe (R-Maine) and Richard H. Bryan (D-Nev.).

The industry anti-slamming plan “is the latest manifestation of an ongoing effort by the long-distance companies to avoid having to face up to real penalties if they can’t make their telemarketers stop slamming people,” said McCain, who is the Senate Commerce Committee chairman.