NEWSReport No. CC 97-30 COMMON CARRIER ACTION June 13, 1997 Commission Orders Hearing for Fletcher Companies; Companies Subject of Numerous Slamming Complaints (CC Docket No. 97-144) The Commission has ordered a hearing to determine whether the operating authority of the Fletcher Companies, a group of long distance telephone companies owned and/or operated by Daniel Fletcher, should be revoked, and whether the Fletcher Companies and the Companies' principals should be barred from providing interstate common carrier services without the prior consent of the Commission. The Fletcher Companies are the subject of numerous consumer complaints involving a practice known as "slamming," or changing a consumer's long distance carrier without his or her consent. Over the past two years the Commission has taken enforcement action against 15 companies for slamming violations, assessing more than $1 million in forfeitures, with approximately $500,000 in additional penalties pending. Since 1993, the Commission has received more than 1,000 complaints filed against the Fletcher Companies that reflect a pervasive pattern of questionable business and marketing practices under the FCC's rules. Most of these complaints contain allegations that the Fletcher Companies used misleading and, in some cases, fraudulent, marketing practices in order to change consumers from their selected long distance carrier to one of the Fletcher Companies without their knowledge or consent. Many of these complaints allege the egregious practice of slamming through forged or falsified Letters of Agency, the forms that authorize a long distance carrier change. Some consumers claim they were charged for long distance calls they did not make, including calls to non- working numbers, or monthly fees for a service they did not enroll in or authorize. In addition, the Commission's investigation revealed that the Fletcher Companies apparently failed to file tariffs to establish rates and charges. In accordance with FCC rules, the Common Carrier Bureau's Enforcement Division served each consumer complaint on the Fletcher Companies with an Official Notice of Informal Complaint directing the Companies to satisfy or answer each complaint and respond with a written report. The Fletcher Companies, however, failed to accept or respond to the vast majority of Notices. Further, the Fletcher Companies failed to provide legitimate business addresses and telephone numbers where Daniel Fletcher or other principals of the companies may be reached. The Commission said that the totality of the information found as a result of the staff's investigation persuaded it to convene a hearing to determine whether the continued operation of the Fletcher Companies as common carriers would be in the public interest. The principal or principals of the Fletcher Companies are therefore directed to show cause why the operating authority of the Fletcher Companies should not be revoked. In addition, the Fletcher Companies, their principal or principals, and any successors or assigns of the Fletcher Companies are ordered to show cause why they should not cease and desist from the provision of any interstate common carrier services without the prior consent of the Commission. If such a cease and desist order is issued, Daniel Fletcher and any other principals of the Fletcher Companies could, for example, be precluded from holding an ownership interest in or exercising operational control over any common carrier -- either directly or indirectly -- without the Commission's prior consent. In addition, if it is determined that the Fletcher Companies have willfully or repeatedly violated any provisions of the Communications Act or the FCC's rules, they may also be subject to monetary forfeitures. Action by the Commission June 12, 1997, by Order to Show Cause and Notice of Opportunity for Hearing (FCC 97-210). Chairman Hundt, Commissioners Quello, Ness, and Chong. -FCC- News media contact: Rochelle Cohen at (202) 418-0253. Common Carrier Bureau contact: Amy Glatter Goodman at (202) 418-0960.