NEWSNEWSReport No. CC 96-2 COMMON CARRIER ACTION January 23, 1996 COMMON CARRIER BUREAU FINDS FIVE COMPANIES APPARENTLY LIABLE FOR FORFEITURE FOR SLAMMING The Common Carrier Bureau has issued five Notices of Apparent Liability ("NALs") for alleged violations of the Commission's slamming rules. The Bureau today announced actions finding AT&T, Home Owners Long Distance, Inc., MCI, Nationwide Long Distance, Inc., and Target Telecom, Inc. each apparently liable for forfeiture penalties for willfully or repeatedly violating Commission rules and orders concerning changes to consumers' long distance carriers. The Commission today also announced the renaming of the Enforcement Division's Informal Complaints and Public Inquiries Branch as the Consumer Protection Branch (see separate release). The practice of changing a consumer's primary interexchange carrier ("PIC") without authorization is commonly known as "slamming." In 1995, the Commission implemented new rules to better protect consumers from this practice, and the Common Carrier Bureau's Enforcement Division investigations of alleged egregious consumer complaints has led to a series of NALs against the responsible carriers. In each action announced today, the Common Carrier Bureau found that the carrier in question apparently violated the Commission's rules by allegedly substituting itself as the PIC for a consumer without that consumer's authorization. The specific actions announced today include: AT&T The complainant alleged that she did not authorize a change in her service to AT&T and the Letter of Agency ("LOA") authorizing the change does not bear her signature. The Bureau notes that there is no similarity between the signature submitted by the complainant and that on the LOA. The Bureau has assessed a NAL of $40,000. (more) -2- Home Owners Long Distance Two complainants alleged that they did not authorize a change in service to Home Owners Long Distance (HOLD) and that contest entry forms containing LOAs that purport to authorize these changes do not bear their signatures. The Bureau notes that there is no similarity between the signatures submitted by the complainants and those on the LOAs. In both cases, HOLD has failed to respond to the Bureau's requests for specific information regarding these conversions. The Bureau has assessed a NAL of $80,000 for the two violations. MCI Telecommunications Corporation Two complainants alleged that they did not authorize a change in service to MCI. The complainants also allege that the LOAs obtained by MCI's marketing agent and allegedly authorizing these changes do not bear their signatures and spell their names incorrectly. In addition, one of the LOAs is written entirely in Spanish and both include a checked box indicating a preference for Spanish, a language the consumers do not read. The Bureau noted that the actions of MCI's marketing agent do not relieve MCI of its independent obligation to ensure compliance with the Commission's rules nor otherwise mitigate MCI's role in the apparent violations. The Bureau has assessed a NAL of $80,000 for the two violations. Nationwide Two complainants alleged that they did not authorize a change in service to Nationwide. The first complainant notes that, although Nationwide asserts that her signature is on a contest form containing an LOA, she did not in fact provide the company with a sample of her handwriting and therefore it was impossible for Nationwide to reach such a conclusion. The second complainant alleges that the contest form containing an LOA that allegedly authorizes the change does not bear her signature. In the second case, Nationwide has failed to respond to the Bureau's requests for specific information regarding this conversion. The Bureau has assessed a NAL of $80,000 for the two violations. Target Telecom, Inc. (TTI) The complainant alleged that he did not authorize a change in his service to TTI and in fact, the LOA obtained by TTI's marketing agent and allegedly authorizing the change does not bear his signature and spelled his name incorrectly. The Bureau noted that the actions of TTI's marketing agent do not relieve TTI of its independent obligation to ensure compliance with the Commission's rules nor otherwise mitigate TTI's role in the apparent violations. The Bureau has assessed an NAL of $40,000. (more) -3- Under Commission rules, PIC change requests submitted by long distance carriers can be confirmed by a document known as a Letter of Agency (LOA), which is signed by the customer to authorize the change. The Bureau notes in issuing these NALs that, if carriers intend to rely on a LOA as authorizing a PIC change, they have the responsibility to make sure the LOA is valid. There appears, however, to be a common practice by some long distance carriers of relying on unverified LOAs that turn out to be falsified or forged. The Bureau notes that, in order to draw industry's attention to the seriousness of the problem and provide incentives to comply with the Commission's rules, the Bureau plans to scrutinize consumer complaints and take prompt enforcement action when the facts indicate that a carrier has failed to take the necessary steps to ensure that LOAs are valid and duly authorized. Actions by the Chief, Common Carrier Bureau, January 19, 1996, by Notices of Apparent Liability (DA 96-44, DA 96-45, DA 96-46, DA 96-47, DA 96-48). -FCC- News Media contact: Susan Lewis Sallet at (202) 418-1500. Common Carrier Bureau contact: Colleen Heitkamp at (202) 418-0960.