Blast from the Past: Long Distance Carrier Faces $1.4 Million Fine for Slamming
In a story with a decidedly 1990’s feel, long distance reseller Silv Communication faces a Notice of Apparent Liability proposing a $1.48 million fine for switching customers’ long distance services without authorization (a/k/a “slamming”). After an investigation, the FCC alleges that Silv Communication submitted 25 switches without obtaining the customers’ authorization pursuant to the FCC’s rules. The FCC alleges that Silv’s third-party verification (TPV) of the calls failed to satisfy the rule’s requirements. Specifically, the Commission found that the TPV provider incorrectly stated that the purpose of the verification was for “quality control and … data entry purposes,” rather than to confirm the decision to switch carriers.
The FCC classified 12 of the switches as “egregious” because Silv’s telemarketer allegedly told customers that they were changing from one plan offered by their current carrier to another plan from the same carrier or that the call was simply to verify information regarding their current account. The Commission classified these misleading marketing statements as “unjust and unreasonable” practices under Section 201.
Per the forfeiture guidelines, the FCC proposes a fine of $40,000 per customer switched without authorization, plus a fine of $80,000 for each “egregious” violation.
Slamming, of course, was a significant problem in the mid- and late-1990s. Since 2000, however, the FCC’s slamming enforcement orders have declined sharply. This forfeiture is the FCC’s first proposed slamming fine since 2008. Its last slamming enforcement action – a proposed forfeiture of $5 million against Horizon Telecom, Inc. – remains unresolved. Two years after proposing that fine, the Commission has not issued a forfeiture order adjudicating the case.