WASHINGTON -- Federal regulators this week will beef up rules against unauthorized long-distance phone-service switching, called slamming, after Congress failed to finish work on new anti-slamming laws earlier this year.
The biggest change expected in the new rules from the Federal Communications Commission will let consumers off the hook for charges incurred for a month or more after being slammed, people familiar with the agency's plans said.
Slamming has become the top consumer problem for state and federal phone regulators as competition has grown in the long-distance arena. Some slamming results from simple data-entry errors, but many incidents occur when unscrupulous firms order changes without permission.
The FCC received 20,000 slamming complaints last year and is on track to exceed that number for 1998.
Congress considered legislation to increase fines and criminal penalties, but lawmakers could not agree on a compromise approach before the 1998 legislative session ended in October. So the FCC, which has already boosted enforcement efforts against firms that engage in slamming, on Thursday will strengthen its existing rules in an attempt to close loopholes and reduce economic incentives for slammers.
Under current FCC rules, a slammed consumer must pay for long-distance calls made after the unauthorized switch, but only at the rate its previous long-distance provider charged. The previous long-distance carrier then has the right to reclaim the money from the slammer.
Under the new rules, a consumer will not have to pay any company for calls made after the slam for a set period of time, expected to be 30 days. That prevents the slammer from ever receiving any money and gives the consumer time to return to their preferred provider.
New verification procedures should prevent consumers from falsely claiming they were slammed to get free service, government and industry officials said.
The FCC will also close a loophole by ending a controversial technique currently allowed to serve as verification of a switch. Some carriers sent consumers a letter saying a service change would take effect unless the company received a response back, but the warning was often hidden or confusing.
Major local and long-distance companies said they would support the expected FCC rule changes. AT&T (T), the largest long-distance carrier, backed the expected changes but wanted the agency to go even farther.
Looking ahead to a time when local phone companies are allowed to compete in the long-distance market, AT&T favors stripping local carriers of the ability to set a customer's long-distance service provider.
"The most important thing they could do would be to have a neutral third-party charged with switching long-distance carriers," said AT&T director of government affairs Jim Spurlock.
On Wednesday, the FCC announced another enforcement against a firm for repeated slamming incidents. Minimum Rate Pricing of Bloomfield, New Jersey, agreed in a consent decree to pay US$1.2 million to settle charges of unauthorized long-distance switches. The company did not admit or deny wrong doing in the agreement.
Copyright© 1998 Reuters Limited.
