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This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).
| Report No. CC 98-44 | COMMON CARRIER ACTION | December 16, 1998 |
MINIMUM RATE PRICING TO PAY $1.2 MILLION TO U.S. TREASURY AND CHANGE ITS BUSINESS PRACTICES;
MRP Enters Into Consent Decree To Resolve Slamming Complaints
In a Consent Decree released today, Minimum Rate Pricing, Inc. (MRP) adopted changes to its business practices and agreed to make voluntary payments to the U.S. Treasury that total $1.2 million. Today's Consent Decree, which contains the largest voluntary payment in any FCC slamming-related consent settlement to date, details measures MRP will take to protect consumers against having their long distance carrier changed without their authorization, a practice known as "slamming."
Today's Consent Decree is the product of an investigation conducted this year by FCC
staff concerning numerous recent slamming allegations against MRP. In October 1997, the
Common Carrier Bureau proposed an $80,000 forfeiture against MRP for apparently substituting
itself as the long distance company for two consumers without their authorization. After the
affected customers returned to their preferred carriers, MRP then apparently took action to switch
the customers back to MRP based upon automatic switch-back provisions in its tariff.
MRP subsequently eliminated its switch-back provisions, but the Bureau continued its investigation into other slamming-related issues concerning MRP's business and marketing practices. Today's Consent Decree culminates the FCC's investigation. MRP, whose principal place of business is Bloomfield, New Jersey, did not admit any wrongdoing in this proceeding.
In addition to MRP's $1.2 million payment to the U.S. Treasury, highlights of the Consent Decree include the following:
- MRP will not conduct outbound telemarketing of its services prior to January 1, 1999. After that date, if MRP elects to use outbound telemarketing it will only do so under the strict terms of the Consent Decree, which delineates the information that MRP must clearly and conspicuously disclose to customers prior to signing them up. MRP will also comply with employee training requirements to carry out these provisions, which are intended to ensure that customers solicited by MRP understand fully what they are being offered.
- MRP may not put into effect any automatic switch-back provision.
- MRP may only compare its rates to other carriers' rates in compliance with strict requirements designed to ensure that consumers are not misled.
- In all outbound telemarketing, MRP must use an independent third party verifier to verify each and every switch to MRP. MRP must also discontinue any incentive payments to third-party verifiers, including commissions, based upon the number of customers switched.
- In accordance with a timetable, MRP must submit to the FCC reports detailing its compliance with the Consent Decree.
Beginning today, the Consent Decree will be in effect for three years. If MRP violates the terms of the Consent Decree or any other FCC rules, the Commission may initiate an immediate hearing to revoke MRP's operating authority.
Action by the Common Carrier Bureau, December 16, 1998
News media contact: Rochelle Cohen at (202) 418-0253.
Common Carrier Bureau contacts: Lisa Choi at (202) 418-1384 or Colleen Heitkamp
at 418-0974. TTY: (202) 418-2555.