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Federal Communications Commission
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Washington, D.C. 20554
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Internet: http://www.fcc.gov

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 98-46 COMMON CARRIER ACTION December 17, 1998

FCC Proposes $2.4 Million Forfeiture Against Business Discount Plan, Inc. for Apparently Engaging in Unfair and Unreasonable Telemarketing Practices and Slamming

The Commission has proposed a $2.4 million forfeiture against Business Discount Plan, Inc. (BDP) for apparently engaging in unfair and unreasonable telemarketing practices and for slamming, the practice of changing a consumer's telephone company without that consumer's express approval. This is the second largest slamming-related forfeiture ever issued by the FCC, and it is the FCC's first forfeiture issued in connection with unfair and unreasonable telemarketing practices. BDP has 30 days to either pay the forfeiture or show why it should be reduced or not imposed.

In a Notice of Apparent Liability (NAL) released today, the Commission determined that BDP apparently violated the Communications Act and FCC rules by substituting itself as the long distance carrier for 30 small business consumers without their authorization. It appears that BDP, which solicited small business customers through telemarketing, misrepresented or implied that it was affiliated with the customers' preferred long distance carrier (in most cases, AT&T) or local telephone company. BDP then misrepresented its service as a generic "business discount plan" that would consolidate the consumers' local and long distance telephone charges in one bill for the consumers' convenience. When consumers agreed to the bill consolidation, however, they did not have their telephone charges combined. Rather, BDP apparently substituted itself as the consumers' long distance company without the consumers' authorization. Moreover, despite the name "Business Discount Plan," BDP did not charge discounted rates for its long distance service. Indeed, BDP's rates are approximately 20 percent above AT&T's rates for basic business service.

Based upon the staff's investigation, the Commission found BDP apparently liable for a total forfeiture in the amount of $2.4 million -- $40,000 for each instance in which BDP employed unfair and unreasonable telemarketing practices and $40,000 for each instance of slamming. In addition, the Commission gave BDP 30 days to file with the FCC a plan detailing the company's compliance with the provisions of the FCC rules and the Act that BDP apparently violated. The plan must also set forth procedures to be used by BDP to promptly address consumers' slamming complaints.

BDP, formerly known as Trans National Telephone, Inc., is a privately-held company headquartered in Long Beach, California. The small business customers apparently slammed by BDP are located in Colorado, Illinois, Pennsylvania, Virginia, Nevada, New Hampshire, Texas, Ohio, Indiana, Massachusetts, Maine, Florida, and Arizona.

Slamming is the FCC's largest area of telephone-related complaint. So far this year, the Commission has handled nearly 20,000 slamming complaints and proposed nearly $13 million in forfeitures in connection with this fraudulent practice.

Action by the Commission December 16, 1998, by Notice of Apparent Liability for Forfeiture (FCC 98-332). Chairman Kennard, Commissioners Ness, Furchtgott-Roth, Powell and Tristani.


News media contact: Rochelle Cohen at (202) 418-0253.
Common Carrier Bureau contacts: Colleen Heitkamp at (202) 418-0974 and Darius Withers at (202) 418-7259.
TTY: (202) 418-2555.