On August 13, 2019, the FCC’s Enforcement Bureau announced that it settled a nearly three-year long investigation into whether CenturyLink included unauthorized charges from third-party service providers on customer bills. Also known as “cramming,” the assessment of unauthorized charges is a major source of consumer complaints and frequent focus of FCC enforcement actions. The CenturyLink Consent Decree follows in the wake of a handful of enforcement actions for cramming when accompanied by unlawful carrier switches (“slamming”) and the FCC’s adoption of new rules codifying its longstanding ban on cramming in 2018. The settlement underscores the responsibility borne by carriers for the chargers they place on customer bills – even for services they do not provide – and the need to maintain safeguards to ensure such charges are authorized.

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At its July 2017 Open Meeting, the Federal Communications Commission (“FCC”) adopted a Notice of Proposed Rulemaking (“NPRM”) designed to strengthen and expand consumer protections against “slamming” and “cramming.” Slamming is the unauthorized change of a consumer’s preferred service provider, while cramming is the placement of unauthorized charges on a consumer’s telephone bill.  As we reported in our Open Meeting preview, slamming and cramming represent a major source of consumer frustration and a common focus of recent FCC enforcement actions. The NPRM is the agency’s first attempt in five years to strengthen the rules around slamming and cramming – and is the first attempt to specifically define cramming in its rules.  Moreover, the agency asks whether these rules should apply to wireless carriers (especially prepaid wireless) and to VoIP providers, potentially expanding the reach of the rules significantly.  Wireless carriers and interconnected VoIP providers should therefore pay close attention to the potential compliance obligations and marketing restrictions proposed in the NPRM.

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It’s no secret that one of the majostock_12192012_0878r stories in the last two years has been the increased activism of the Federal Communications Commission’s (“FCC”) Enforcement Bureau (“Bureau”).  February 2016 was no exception in terms of the nature and level of activity.  In this blog entry, we highlight a few orders that stand out

For the second consecutive year, the FCC has increased the fines it proposes for slamming and related violations.  On January 24, 2014, the FCC proposed to fine U.S. Telecom Long Distance, Inc. (USTLD) over $5 million for deceptive marketing and billing practices.  The USTLD Notice of Apparent Liability alleges that the company engaged in (1) misleading marketing practices, (2) slamming (unlawful switching of presubscribed carriers without authorization), (3) cramming (unlawful billing of services without authorization) and (4) Truth-in-Billing rule violations.  Although the NAL addresses practices that are not new, the NAL is noteworthy in its use of increased fines (called “upward adjustments” in FCC enforcement practice).  As discussed below, the FCC proposes substantial upward adjustments for “extensive violations” and for violations that cause “substantial harm” to consumers and the elderly.  These upward adjustments for slamming violations appear to be part of a trend to increase the overall size of FCC enforcement actions in recent years.
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 Four months after Commissioner Pai dissented from a slamming order because the Commission was being too lenient, his fellow Commissioners apparently now agree.  In two slamming orders released shortly before the holidays, the FCC upped the stakes in slamming violations.  In both orders, the FCC found egregious violations, and used that finding to triple the proposed forfeiture to $120,000 per violation.

Although slamming has declined as the stand-alone long distance market has dissipated, the Commission has referred to slamming by analogy for other types of violations, including cramming and improper prepaid card marketing.   This new approach to slamming may signal future changes in these enforcement areas as well.  


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Usually without much fanfare, the FCC goes about the business of adjudicating slamming complaints under its TPV rules.  This latest case underscores that the Consumer & Governmental Affairs Bureau continues to strictly enforce the content requirements for confirmation of carrier change orders.  This time, it emphasized that the rules require confirmation of a carrier change, not just a change to the customer’s service.  Carriers should periodically review their verification scripts to ensure that they satisfy this increasingly literal standard applied by the FCC.


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Slamming cases are a rarity these days, but this settlement is noteworthy not because it involves slamming, but because of the unusual remedies the FCC required in its consent decree.

The case involves two Notices of Apparent Liability issued to companies now under common ownership, Horizon Telecom, Inc. and Reduced Rate Long Distance, LLC.  In Horizon, the Commission proposed a fine of $5,084,000 for slamming.  In Reduced Rate, the Commission proposed a fine of $8,000 for failing to respond to two informal consumer complaints.  Both NALs were issued in 2008.  Yesterday, the Enforcement Bureau released a consent decree settling the two cases.

What is so unusual about the settlement?


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Since 1998, the FCC has adjudicated individual consumer claims that the consumer’s telecommunications services were switched without authorization (aka "slamming").  These adjudications often are released by the dozens and use a consistent format and language.  The most recent batch of such releases confirms that, when it comes to orders confirmed by third party verification ("TPV"), the Bureau employs a literal interpretation of the content requirements for verification.

Continue reading to see examples of the Bureau’s literal interpretations.


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