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Preferred LD, Inc. Slamming Order

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Released: August 2, 2012

Federal Communications Commission

DA 12-1242

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Preferred Long Distance
)
IC No. 11-S3106034
)
11-S3218877
Complaints Regarding
)
11-S3247492
Unauthorized Change of
)
11-S3259759
Subscriber’s Telecommunications Carrier
)

ORDER

Adopted: August 1, 2012

Released: August 2, 2012

By the Deputy Chief, Consumer Policy Division, Consumer & Governmental Affairs Bureau:
1.
In this Order, we consider the complaints filed by Complainants’1 alleging that
Preferred Long Distance (PLD) changed Complainants’ telecommunications service providers
without obtaining authorization and verification from Complainant in violation of the
Commission’s rules.2 We conclude that PLD’s actions did result in unauthorized changes in
Complainants’ telecommunications service provider and we grant Complainants’ complaints.
2.
In December 1998, the Commission released the Section 258 Order in which it
adopted rules to implement Section 258 of the Communications Act of 1934 (Act), as amended
by the Telecommunications Act of 1996 (1996 Act).3 Section 258 prohibits the practice of
“slamming,” the submission or execution of an unauthorized change in a subscriber’s selection of


1
See Appendix.
2
See 47 C.F.R. §§ 64.1100 – 64.1190.
3
47 U.S.C. § 258(a); Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996);
Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications Act of 1996;
Policies and Rules Concerning Unauthorized Changes of Consumers’ Long Distance Carriers
, CC Docket No.
94-129, Second Report and Order and Further Notice of Proposed Rule Making, 14 FCC Rcd 1508 (1998)
(Section 258 Order), stayed in part, CenturyTel WorldCom v. FCC, No. 99-1125 (D.C. Cir. May 18, 1999); First
Order on Reconsideration, 15 FCC Rcd 8158 (2000); stay lifted, CenturyTel WorldCom v. FCC, No. 99-1125
(D.C. Cir. June 27, 2000); Third Report and Order and Second Order on Reconsideration, 15 FCC Rcd 15996
(2000), Errata, DA No. 00-2163 (rel. Sept. 25, 2000), Erratum, DA No. 00-2192 (rel. Oct. 4, 2000), Order, FCC
01-67 (rel. Feb. 22, 2001); Third Order on Reconsideration and Second Further Notice of Proposed Rule Making,
18 FCC Rcd 5099 (2003); Order, 18 FCC Rcd 10997 (2003); Fourth Report and Order, 23 FCC Rcd 493 (2008).
Prior to the adoption of Section 258, the Commission had taken various steps to address the slamming problem.
See, e.g., Policies and Rules Concerning Unauthorized Changes of Consumers' Long Distance Carriers, CC
Docket No. 94-129, Report and Order, 10 FCC Rcd 9560 (1995), stayed in part, 11 FCC Rcd 856 (1995); Policies
and Rules Concerning Changing Long Distance Carrier
s, CC Docket No. 91-64, 7 FCC Rcd 1038 (1992),
reconsideration denied, 8 FCC Rcd 3215 (1993); Investigation of Access and Divestiture Related Tariffs, CC
Docket No. 83-1145, Phase I, 101 F.C.C.2d 911, 101 F.C.C.2d 935, reconsideration denied, 102 F.C.C.2d 503
(1985).

Federal Communications Commission

DA 12-1242

a provider of telephone exchange service or telephone toll service.4 In the Section 258 Order, the
Commission adopted aggressive new rules designed to take the profit out of slamming,
broadened the scope of the slamming rules to encompass all carriers, and modified its existing
requirements for the authorization and verification of preferred carrier changes. The rules
require, among other things, that a carrier receive individual subscriber consent before a carrier
change may occur.5 Pursuant to Section 258, carriers are absolutely barred from changing a
customer's preferred local or long distance carrier without first complying with one of the
Commission's verification procedures.6 Specifically, a carrier must: (1) obtain the subscriber's
written or electronically signed authorization in a format that meets the requirements of
Section 64.1130; (2) obtain confirmation from the subscriber via a toll-free number provided
exclusively for the purpose of confirming orders electronically; or (3) utilize an independent third
party to verify the subscriber's order.7
3.
The Commission also has adopted liability rules. These rules require the carrier
to absolve the subscriber where the subscriber has not paid his or her bill. In that context, if the
subscriber has not already paid charges to the unauthorized carrier, the subscriber is absolved of
liability for charges imposed by the unauthorized carrier for service provided during the first 30
days after the unauthorized change.8 Where the subscriber has paid charges to the unauthorized
carrier, the Commission’s rules require that the unauthorized carrier pay 150% of those charges
to the authorized carrier, and the authorized carrier shall refund or credit to the subscriber 50% of
all charges paid by the subscriber to the unauthorized carrier.9 Carriers should note that our
actions in this order do not preclude the Commission from taking additional action, if warranted,
pursuant to Section 503 of the Act.10
4.
We received Complainants’ complaints alleging that Complainants’
telecommunications service providers had been changed to PLD without Complainants’
authorization. Pursuant to Sections 1.719 and 64.1150 of our rules,11 we notified PLD of the


4
47 U.S.C. § 258(a).
5
See 47 C.F.R. § 64.1120.
6
47 U.S.C. § 258(a).
7
See 47 C.F.R. § 64.1120(c). Section 64.1130 details the requirements for letter of agency form
and content for written or electronically signed authorizations. 47 C.F.R. § 64.1130.
8
See 47 C.F.R. §§ 64.1140, 64.1160. Any charges imposed by the unauthorized carrier on the
subscriber for service provided after this 30-day period shall be paid by the subscriber to the authorized carrier at
the rates the subscriber was paying to the authorized carrier at the time of the unauthorized change. Id.
9
See 47 C.F.R. §§ 64.1140, 64.1170.
10
See 47 U.S.C. § 503.
11
47 C.F.R. § 1.719 (Commission procedure for informal complaints filed pursuant to Section 258
of the Act); 47 C.F.R. § 64.1150 (procedures for resolution of unauthorized changes in preferred carrier).
2

Federal Communications Commission

DA 12-1242

complaint and PLD responded.12 PLD has not submitted third party verifications or letters of
agency, as required by our rules.13 We find that PLD has failed to produce clear and convincing
evidence that Complainants authorized a carrier change.14 Therefore, we find that PLD’s actions
resulted in an unauthorized change in Complainant’s telecommunications service provider and
we discuss PLD’s liability below.15
5.
PLD must remove all charges incurred for service provided to Complainants for
the first thirty days after the alleged unauthorized change in accordance with the Commission’s
liability rules.16 We have determined that Complainants are entitled to absolution for the charges
incurred during the first thirty days after the unauthorized change occurred and that neither
Complainants’ authorized carrier nor PLD may pursue any collection against Complainants for
those charges.17 Any charges imposed by PLD on the subscriber for service provided after this
30-day period shall be paid by the subscribers to their authorized carriers at the rates the
subscribers was paying to their authorized carriers at the time of the unauthorized change.18
6.
Accordingly, IT IS ORDERED that, pursuant to Section 258 of the
Communications Act of 1934, as amended, 47 U.S.C. § 258, and Sections 0.141, 0.361 and
1.719 of the Commission’s rules, 47 C.F.R. §§ 0.141, 0.361, 1.719, the complaints filed against
PLD Communications, LLC IS GRANTED.
7.
IT IS FURTHER ORDERED that, pursuant to Section 64.1170(d) of the
Commission’s rules, 47 C.F.R. § 64.1170(d), Complainants are entitled to absolution for the
charges incurred during the first thirty days after the unauthorized change occurred and neither
Complainants’ authorized carriers nor PLD may pursue any collection against Complainants for
those charges.


12
See Appendix.
13
See 47 C.F.R § 64.1120-64.1130.
14
See 47 C.F.R. § 64.1150(d).
15
If any Complainant is unsatisfied with the resolution of this complaint, such Complainant may
file a formal complaint with the Commission pursuant to Section 1.721 of the Commission’s rules, 47 C.F.R. §
1.721. Such filing will be deemed to relate back to the filing date of Complainant’s informal complaint so long as
the formal complaint is filed within 45 days from the date this order is mailed or delivered electronically to such
Complainant. See 47 C.F.R. § 1.719.
16
See 47 C.F.R. § 64.1160(b).
17
See 47 C.F.R. § 64.1160(d).
18
See 47 C.F.R. §§ 64.1140, 64.1160.
3

Federal Communications Commission

DA 12-1242

8.
IT IS FURTHER ORDERED that this Order is effective upon release.
FEDERAL COMMUNICATIONS COMMISSION
Nancy A. Stevenson, Deputy Chief
Consumer Policy Division
Consumer & Governmental Affairs Bureau
4

Federal Communications Commission

DA 12-1242

APPENDIX
INFORMAL
DATE OF
DATE OF
COMPLAINT
COMPLAINT
RESPONSE
11-S3106034
April 28, 2011
April 22, 2011
11-S3218877
July 28, 2011
September 9, 2011
11-S3247492
September 22, 2011 November 4, 2011
11-S3259759
October 21, 2011
November 23, 2011
5

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