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TeleDias Slam Order

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Released: July 31, 2014
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Federal Communications Commission

DA 14-1103

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of

)

)

TeleDias Communications

)

IC No. 13-S3716769

)

Complaint Regarding

)

Unauthorized Change of

)

Subscriber’s Telecommunications Carrier

)

ORDER

Adopted: July 30, 2014

Released: July 31, 2014

By the Deputy Chief, Consumer Policy Division, Consumer & Governmental Affairs Bureau:

1.

In this Order, we consider the complaint1 alleging that TeleDias Communications

(TeleDias) changed Complainant’s telecommunications service provider without obtaining

authorization and verification from Complainant in violation of the Commission’s rules.2

We

conclude that TeleDias’s actions violated the Commission’s carrier change rules and we grant

Complainant’s complaint.

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

1

Informal Complaint No. IC 13-S3716769, filed August 26, 2013.

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, MCI WorldCom v. FCC, No. 99-1125 (D.C. Cir. May 18, 1999); First Order on

Reconsideration, 15 FCC Rcd 8158 (2000); stay lifted, MCI 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 Carriers, 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).

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Federal Communications Commission

DA 14-1103

of 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 Complainant’s complaint on August 26, 2013, alleging that

Complainant’s telecommunications service provider had been changed to TeleDias without

Complainant’s authorization. Pursuant to Sections 1.719 and 64.1150 of the Commission’s

rules11 we notified TeleDias of the complaint and TeleDias responded on October 9, 2013.12

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).

12

TeleDias’s Response to Informal Complaint No. IC 13-S3716769, received October 9, 2013.

2

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Federal Communications Commission

DA 14-1103

TeleDias states that authorization was received and confirmed through third party verification

(TPV). The Commission’s rules require that the verification elicit, amongst other things,

confirmation that the person on the call is “authorized to make the carrier change.” 13

We have

reviewed the TPV that TeleDias submitted with it response. Instead, the verifier asks the person

on the call, “You are 18 years old, an authorized person and want to make these selections. Is

that correct?” An affirmative response does not establish whether the person was authorized to

make the carrier change and, therefore the verifier has not elicited confirmation that the person is

authorized to make a carrier change.14

As we emphasized in the Fourth Report and Order, “any

description of the carrier change transaction…shall not be misleading “and verifiers should

convey explicitly that “the consumers will have authorized a carrier change, and not, for

instance, an upgrade in existing service.”15

We find that TeleDias’s actions were in violation of

our carrier change rules, and we discuss TeleDias’s liability below.16

5.

Pursuant to Section 64.1170(b) our rules, TeleDias must forward to AT&T an

amount equal to 150% of all charges paid by the subscriber to TeleDias along with copies of any

telephone bills issued from TeleDias to the Complainant.17

Within ten days of receipt of this

amount, AT&T shall provide a refund or credit to Complainant in the amount of 50% of all

charges paid by Complainant to TeleDias. Complainant has the option of asking AT&T to re-

rate TeleDias charges based on AT&T rates and, on behalf of Complainant, seek from TeleDias,

any re-rated amount exceeding 50% of all charges paid by Complainant to TeleDias. AT&T

must also send a notice to the Commission, referencing this Order, stating that is has given a

refund or credit to Complainant.18 If AT&T has not received the reimbursement required from

TeleDias within 45 days of the release of this Order, AT&T must notify the Commission and

Complainant accordingly. AT&T also must notify the Complainant of his or her right to pursue

a claim against TeleDias for a refund of all charges paid to TeleDias.19

13

See 47 C.F. R. § 64.1120(c)(3)(iii).

14

Cf. Consumer Telcom, Inc., Order on Reconsideration, 27 FCC Rcd 5340 (CGB 2012) ("the

verifier's question, 'Do you have authority to make changes to your long distance service?' did not confirm that the

person was authorizing a change that would result in receiving service from a different carrier").

15

See Fourth Report and Order, 23 FCC Rcd 493 (2008)(emphasis added); see also 47 C.F.R. §

64.1120(c)(3)(iii).

16

If Complainant is unsatisfied with the resolution of this complaint, 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

Complainant. See 47 C.F.R. § 1.719.

17

See 47 C.F.R § 64.1170(b)(1)(2).

18

See 47 C.F.R. § 64.1170(c).

19

See 47 C.F.R. § 64.1170(e).

3

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Federal Communications Commission

DA 14-1103

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 complaint filed against

TeleDias Communications IS GRANTED.

7.

IT IS FURTHER ORDERED that, pursuant to Section 64.1170(b) of the

Commission’s rules, 47 C.F.R. § 64.1170(b), that TeleDias must forward to AT&T an amount

equal to 150% of all charges paid by the subscriber along with copies of any telephone bills

issued from the company to the Complainant within ten (10) days of the release of this order.

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

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