445 12th Street, S.W.
Washington, D.C. 20554
Fax-On-Demand 202 / 418-2830
Internet: http://www.fcc.gov
TTY: 202/418-2555
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).
| FOR IMMEDIATE RELEASE August 19, 1999 Report No. CC 99-37 |
NEWS MEDIA CONTACT: Emily Hoffnar (202) 418-0253 |
Federal Communications Commission (FCC)
Commission Action
FCC PROPOSES $1.12 MILLION FORFEITURE AGAINST COLEMAN ENTERPRISES d/b/a LOCAL LONG DISTANCE, INC., AND $1 MILLION FORFEITURE AGAINST VISTA GROUP INTERNATIONAL, INC., FOR APPARENTLY SLAMMING CONSUMERS
Slamming continues to be the FCC's largest category of telephone-related complaint. So far this year, the FCC has handled nearly 15,000 slamming complaints. Since July 1998, the FCC has issued five (5) NALs totaling $7.92 million for this unauthorized practice.
The FCC's action against LLD is based upon consumers' allegations that LLD employed deceptive telemarketing practices to effect the unauthorized changes of their preferred carriers in violation of section 258 of the Communications Act (Act). The FCC found that LLD's telemarketers intentionally misrepresented the nature of its offering as a service that would consolidate the customers' existing local and long-distance telephone charges on one bill for the customers' convenience. The FCC further found that the egregious nature of LLD's misrepresentations were compounded by LLD's telemarketers' practice of misrepresenting or implying that LLD was affiliated with, or was in fact, the customers' local or long-distance service provider. In addition, the FCC determined that LLD's misrepresentations of its identity, its withholding of material facts regarding its service offerings, and its attempt to mislead consumers constitute unjust and unreasonable practices in violation of section 201(b) of the Act. The notice relied upon the complaints of 14 consumers and a subsequent investigation by the Common Carrier Bureau's Enforcement Division. The FCC processed over approximately 300 slamming complaints against LLD since June 1998.
Based upon the staff's investigation, the FCC found LLD apparently liable for a total forfeiture in the amount of $1.12 million -- the standard $40,000 for each slamming violation was adjusted upward to $80,000 based on the egregious nature of the conduct involved.
The FCC's action against Vista today relies upon complaints from 18 consumers who alleged that Vista changed their preferred carriers without their approval. In seven of these slamming complaints, consumers alleged that Vista, in effecting the unauthorized preferred carrier changes, engaged in intentional, egregious, and repeated misconduct designed to deceive customers, including misrepresenting the nature of Vista's service during telemarketing calls, and, in at least one case, falsifying a customer's verification audiotape. With respect to the remaining 11 slamming complaints, Vista admitted that the customer accounts were not verified in accordance with the FCC's rules and orders. The FCC processed approximately 900 slamming complaints against Vista between January 1, 1998 and July 30, 1999.
Based on an investigation by the Enforcement Division, the FCC found that Vista apparently willfully or repeatedly violated section 258 of the Act and the FCC's preferred carrier change rules and orders by slamming the 18 consumers referenced in the NAL. Further, with regard to the seven section 258 violations that were heightened by Vista's apparently egregious misconduct, the FCC concluded that Vista apparently violated section 201(b) of the Act. The FCC found Vista apparently liable for a total forfeiture in the amount of $1 million. The standard $40,000 forfeiture amount for each section 258 violation was adjusted upward to $80,000 in each of the seven instances based upon Vista's intentional, egregious, and repeated misconduct, such as misrepresenting the nature of Vista's service offering. For each of the eleven remaining slamming violations involving preferred carrier changes that were admittedly not verified, the FCC determined that the standard forfeiture amount of $40,000 was appropriate.
Coleman Enterprises, d/b/a Local Long Distance, is a privately-held company headquartered at 6053 Hudson Road, Suite 110, Saint Paul, Minnesota 55125. (Phone # 651/ 293-0113).
Vista Group International, Inc. is a privately-held company headquartered at 821 Westpoint Parkway, Suite 920, Westlake, Ohio, 44145. (Phone # 440/ 808-9500).
Action by the Commission August 19, 1999, by Notice of Apparent Liability for Forfeiture (FCC 99-224 and FCC 99-225). Chairman Kennard, Commissioners Ness, Furchtgott- Roth, Powell and Tristani.
Common Carrier Bureau contacts: Colleen Heitkamp at (202) 418-0974, Darius Withers at (202) 418-7259, and Amy Glatter-Goodman at (202) 418-1549. TTY: (202) 418-2555.
Coleman Enterprises, Inc. d/b/a Local Long Distance, Inc.
File No. ENF-99-09
NAL/Acct. No. 916EF0004
Vista Communications Group, Inc.
File No. ENF-99-10
NAL Acct. No. 916EF0005