FCC Proposes Fine Against LDC for Slamming Violations
The FCC handed down a proposed fine of $1.1 million against LDC Telecommunications for alleged slamming violations. Commissioner Ajit Pai dissented in part to the order, saying the proposed forfeiture was too small given the offense. Twenty-seven consumers had complained that LDC had switched them over to its long distance service without authorization, the FCC said.
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LDC is based in Tampa, Fla., according to regulatory filings. Various phone numbers listed for the company were disconnected and executives could not be reached for comment Friday.
"We find that LDC has apparently changed the preferred carriers of 27 consumers without proper authorization, a practice commonly known as ’slamming,’ and has apparently failed to respond to seven slamming complaints,” the order said (http://xrl.us/bnnvxq). In response to an inquiry from the Enforcement Bureau, LDC provided the bureau with three third-party verification recordings “purportedly showing that those three complainants had authorized service with LDC,” but offered nothing on 24 others. “We have reviewed the three TPVs and find that LDC’s verifier did not confirm that the consumer wanted to switch carriers and did not confirm the telephone number that the consumers wanted to switch as required by our rules,” the order said. “With respect to the other 24 consumers whose complaints form the basis of this NAL, LDC provided no verification tapes or other evidence of authorization to change their preferred carriers. Thus, we presume these 24 complaints to be unauthorized changes in consumers’ telecommunications service providers."
The FCC calculated the proposed fine on its “base forfeiture amount” of $40,000 per offense “for violations of our rules and orders regarding unauthorized changes of preferred interexchange carriers.” The base for the fine, $1,080,000, is 27 times $40,000, the order said. The FCC tacked on an additional $28,000 for failing to respond to seven slamming complaints the FCC had forwarded to LDC.
"There is one aspect of today’s order where I diverge from my colleagues,” Pai said. “In my view, the forfeiture amount proposed by the Commission is simply too low given the egregious nature of LDC’s conduct. LDC failed to provide a single verification tape showing it had authorization to switch a consumer’s long-distance service provider (as required under our rules) and provided no defense whatsoever with respect to 24 of the complaints at issue. Moreover, LDC’s business appears to have been immensely profitable: Consumers who were the victims of LDC’s slamming reported receiving monthly bills of $128.67, $189.13, $259.51, and $371.14 even though those same consumers’ previous long-distance bills had been about $20."
"Slamming is a dishonest and exploitative practice, and PK is glad to see the commission take it seriously,” said Public Knowledge Staff Attorney John Bergmayer. “Also, this is a case where I'm happy to agree with a dissent from Commissioner Pai: given the facts of this case, the fine should be higher."
"It’s good to see the FCC enforcing its rules in this case and punishing blatantly harmful practices like slamming,” said Free Press Policy Director Matt Wood. “We're especially pleased by Commissioner Pai’s stirring call for more meaningful deterrents to punish rule violations and protect consumer interests."
"It’s good that the commission is looking into the complaints that consumers are sending them,” said Parul Desai, policy counsel at Consumers Union. “I think it’s important for the FCC to always be vigilant and to be ahead on some on some of these issues.” Her group is concerned about cramming violations as well, she said.