Currently, the FCC’s truth-in-billing rules, applicable to LECs, IXCs, and wireless providers address the form and content of consumer bills but do not explicitly address the imposition of unauthorized charges on consumers’ telephone bills. The FCC’s slamming rules forbid a local or long distance carrier from switching a consumer’s preferred carrier without proper authorization. The new rules proposed by the FCC address the usual sources of slamming and cramming and the gaps in the current rules.
Executing carriers are currently prohibited from verifying carrier change requests before executing them. The FCC asks if it should now allow executing carriers to “double-check” that the consumer wants to switch providers before approving the change. Comments on potential implementation and surrounding questions are welcomed:
Blocking Third Party Billing
The FCC asks if wireline carriers should be required to block third-party charges for local and long-distance service by default, and only bill such charges if a consumer opts-in. Comments on relevant questions such as how long opting-in should last, should consumers be able to opt-in only for a single service change, and how customers should be notified of the opt-in option are requested. The FCC also questions how it could structure the rule to minimize the impact on legitimate third-party local or long-distance services (e.g., collect calls) and how it could mitigate the costs of an opt-in process, including costs to change billing systems, especially for small providers.
An FCC investigation found that sales agents for three carriers, apparently targeting non-English speakers, told consumers they were calling about a package delivery in an effort to record the consumers’ voices, and edited the recordings of consumer statements to produce fake TPVs. A complainant reported that her elderly mother answered questions on the phone about an undelivered postal service package and that her responses were subsequently used in an agreement to switch carriers.
Would the elimination of TPVs as a verification mechanism be effective in preventing slamming and provide substantial benefits to consumers? What potential effects would doing so have on legitimate providers’ sales effort? If eliminated, what other mechanisms should the FCC establish to verify authorization of a carrier change? Should the option of signing up for service online after the end of the sales call, or to call a designated service number to confirm their desire to switch be presented to consumers? The FCC seeks comment on these questions as it contemplates eliminating the use of TPVs as a verification method. The FCC also asks how it could make TPVs more difficult to falsify in the event that it retains TPV as a verification option.
Recent FCC enforcement actions revealed that a major source of slamming is deceitful sales practices by carriers. To address the lack of an explicit rule banning such methods, the FCC is proposing a new rule stating that any misrepresentation or deception during a sales call will invalidate the carrier change authorization, even if the change was verified. The FCC seeks comment on the potential downsides to this proposal, the burden on legitimate telemarketing it may pose, its interaction with state slamming rules, and its applicability to wireless, pre-paid wireless, and interconnected VoIP sales calls.
Unauthorized Charges
The FCC is proposing to codify a rule against cramming that would prohibit carriers from placing any charges that have not been authorized by the customer on any telephone bill. Comment on potential downsides and applicability to wireless, pre-paid wireless, and interconnected VoIP providers is requested. Additionally, given the wide use of electronic telephone bills providing real-time updates, the FCC is asking if the definition of “telephone bill” should include the various ways consumers can keep track of their account activity.
Currently, customers must specifically request that their preferred local, IntraLATA and/or InterLATA carrier be frozen and must provide a separate authorization for each of the services they want to freeze. The FCC is considering making freezes for all three services the default option and seeks comment on the adoption of such a rule and other surrounding issues such as: applicability to all LECs, costs associated with implementation, potential impact on carrier billing systems, customer notification, procedures to lift a default freeze, and possible effect on number exhaust.
The FCC questions whether submitting carriers that rely on TPVs should be required to record the entire sales call preceding a carrier change. The FCC seeks comment on pertinent questions such as: the definition of a sales call, the retention period of those recordings, if required, specific guidelines against false and misleading statements by sales representatives, the information should sales representatives be required to provide to the consumers to help them understand the call’s purpose, and the costs associated with such a requirement and their possible mitigation for smaller carriers.
Comments will be due 30 days after publication of the Notice in the Federal Register. Reply comments will be due 60 days after publication. Publication has not yet occurred. Need a more details and alerts regarding this regulatory development? See information about TMI's Regulatory Briefing dated 7/20/17.