Click here for Adobe Acrobat version
Click here for Microsoft Word version
********************************************************
NOTICE
********************************************************
This document was converted from Microsoft Word.
Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.
All text attributes such as bold, italic, underlining, etc. from the
original document will not show up in this text version.
Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.
If you need the complete document, download the
Microsoft Word or Adobe Acrobat version.
*****************************************************************
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
Talk America, Inc. ) File No. EB-00-TC-007
) NAL/Acct. No. 20033217004
Consent Decree ) FRN No. 0004319430
)
)
ORDER
Adopted: March 31, 2003 Released: April 1, 2003
By the Chief, Enforcement Bureau:
1. In this Order, we adopt a Consent Decree terminating an
informal investigation by the Enforcement Bureau (``Bureau'')
into possible violations by Talk America, Inc. (``Talk America'')
of Section 258 of the Communications Act of 1934, as amended (the
``Act''), the Commission's rules related to unauthorized
preferred carrier changes (``slamming''), Section 64.1120 of the
Commission's rules, and Section 201(b) of the Communications Act,
regarding business practices of Talk America, including billing
errors.1
2. We have reviewed the terms of the Consent Decree and
evaluated the facts before us. We believe that the public
interest would be served by approving the Consent Decree and
terminating the investigation.
3. Based on the record before us, and in the absence of
material new evidence relating to this matter, we conclude that
there are no substantial and material questions of fact as to
whether Talk America possesses the basic qualifications,
including its character qualifications, to hold or obtain any FCC
licenses or authorizations.
4. Accordingly, IT IS ORDERED, pursuant to Sections 4(i),
4(j), and 503(b) of the Communications Act, 47 U.S.C. §§ 154(i),
154(j), and 503(b) and the authority delegated by sections 0.111
and 0.311 of the Commission's rules, 47 C.F.R. §§ 0.111, 0.311,
that the Consent Decree attached hereto IS ADOPTED.
5. IT IS FURTHER ORDERED that the above-captioned
investigation IS TERMINATED.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554
)
In the Matter of ) File No. EB-00-TC-
007
Talk America, Inc. ) NAL/ Acct. No.
20033217004
) FRN No. 0004319430
CONSENT DECREE
1. The Enforcement Bureau ("Bureau") of the Federal
Communications Commission (``Commission'') and Talk America Inc.
(``Talk America'' or the ``Company''), previously known as
Talk.com Holding Corp., by their counsel or authorized
representatives, hereby enter into this Consent Decree
terminating an Investigation by the Bureau staff. The
Investigation involved possible violations of Section 258 of the
Communications Act of 1934, as amended, 47 U.S.C. § 258, the
Commission's rules related to unauthorized preferred carrier
changes, 47 C.F.R. § 64.1120, and Section 201(b) of the
Communications Act, 47 U.S.C. § 201(b), regarding business
practices of Talk America, including billing errors.
2. Talk America is a common carrier that offers local,
long distance, intraLATA toll, and international voice services
to residential and small business customers nationwide.
3. On November 3, 2000, the Bureau issued a letter of
inquiry (``LOI'') initiating an Investigation of Talk America's
compliance with Sections 201(b) and 258 of the Communications
Act and Section 64.1120 of the Commission's rules. In its
filings and discussions with the Bureau in response to the
Investigation, Talk America identified several problems that it
had experienced. The Company switched consumers from their
preferred carriers to Talk America without proper authorization.
The Company incorrectly sent promotional checks with billing
telephone numbers (``BTNs'') belonging to one consumer to other
consumers, causing additional unauthorized preferred carrier
changes. Talk America dial-around customers received bills that
contained charges for presubscribed customers. Consumers were
double-billed by Talk America for monthly charges. Consumers
complained that they tried to cancel their Talk America service,
but were unable to do so. Consumers also complained that they
tried to disconnect their Talk America service and reconnect to
a new preferred carrier, but that they had considerable
difficulty doing so.
4. For the purposes of this Consent Decree, the following
definitions shall apply:
(a) "Adopting Order" shall mean an Order of the Bureau
adopting the terms and conditions of this Consent
Decree.
(b) ``Bureau'' shall mean the Enforcement Bureau of
the Federal Communications Commission.
(c) ``Commission" shall mean the Federal
Communications Commission.
(d) "Effective Date" shall mean the date on which the
Enforcement Bureau adopts the Adopting Order.
(e) ``Informal complaint'' shall mean a complaint
filed under 47 C.F.R. §§ 1.711-1.717.
(f) ``LEC'' shall mean a Local Exchange Carrier.
(g) "Parties" shall mean the Bureau or the Commission
and Talk America.
(h) ``preferred carrier change'' shall mean an order
or request submitted by a carrier to a LEC to
effect a change in the customer's preferred
carrier.
(i) ``Talk America" or the "Company" shall mean Talk
America and all parents, subsidiaries, divisions,
successors or assigns, officers, directors,
employees, agents, representatives, marketing
personnel, or any other persons acting or
purporting to act on behalf of Talk America, or
its successors or assigns.
(j) ``Investigation'' means the investigation
initiated by the Bureau regarding the matters
discussed in paragraph 3 above, concerning Talk
America's conduct during the time period of
January 1, 2000 to the Effective Date of the
Consent Decree.
5. The Parties agree that the provisions of this Consent
Decree shall be subject to final approval by the Bureau through
incorporation of such provisions by reference in an Adopting
Order, which shall immediately terminate the Investigation.
6. The Parties agree that this Consent Decree shall become
effective on the date on which the Adopting Order is adopted by
the Bureau and shall expire two (2) years after its Effective
Date. Unless otherwise specified, all commitments made by Talk
America herein shall continue until the expiration of this
Consent Decree. The Consent Decree and Adopting Order may be
extended by the Bureau upon a finding that Talk America has
materially failed to comply with the terms of the Consent Decree.
Upon the effective date of the Consent Decree, the Adopting Order
and this Consent Decree shall have the same force and effect as
any other order of the Commission, and any violation of the terms
of this Consent Decree shall constitute a violation of a
Commission Order entitling the Commission to exercise any and all
rights and to seek any and all remedies authorized by law for the
enforcement of a Commission Order.
7. The Parties agree that any provisions of this Consent
Decree that would cause Talk America to act in violation of any
subsequent rule or order adopted by the Commission will be
superseded by any such subsequent rule or order.
8. Talk America admits the jurisdiction of the Bureau over
it and the subject matter of this action for purposes of this
Consent Decree and the Adopting Order.
9. Talk America waives any further procedural steps and
any rights it may have to seek judicial review or otherwise
challenge or contest the validity of this Consent Decree or the
Adopting Order.
10. If the Commission brings an action in the United States
District Court to enforce the terms of the Consent Decree, Talk
America agrees that it will not contest the validity of the
Consent Decree or Adopting Order, will consent to a judgement
incorporating the terms of this Consent Decree, and will waive
its statutory right to a trial de novo.
11. Talk America waives any rights it may have under any
provision of the Equal Access to Justice Act, 5 U.S.C. § 504.
12. In express reliance on the covenants and
representations contained in this Consent Decree, the Bureau
agrees to terminate the Investigation, without any finding of
liability on the part of Talk America. This Consent Decree shall
constitute a final settlement between Talk America and the Bureau
of the above-captioned Investigation and, except as otherwise set
forth in this paragraph, any additional proceeding based on
allegations of unauthorized preferred carrier changes and/or
billing errors occurring on or before the Effective Date of this
Consent Decree. This Consent Decree is not dispositive of any
matter(s) within the jurisdiction of any other federal or state
agency, regulatory body, or state attorney general. Nothing in
this Consent shall prevent the Commission from adjudicating
formal or informal complaints filed against the Company pursuant
to Section 208 of the Communications Act, as amended, 47 U.S.C. §
208. Similarly, nothing in this Consent Decree is dispositive
with respect to the rights of any third party or complainant who
has filed or should file a formal or informal complaint against
the Company pursuant to Section 208 of the Communications Act, as
amended, 47 U.S.C. § 208. Nothing in this Consent Decree shall
prevent the Commission from instituting new investigations or
enforcement proceedings against Talk America in the event of any
alleged future misconduct.
13. The Bureau agrees that, based on the facts developed in
this Investigation and in the absence of material new evidence
related to this matter, it will not use the facts developed in
this Investigation through the Effective Date of the Consent
Decree or the existence of this Consent Decree to institute, on
its own motion, any new proceeding, formal or informal, or to
take any action on its own motion against Talk America concerning
the matters discussed in paragraph 3 above. The Bureau also
agrees that, based on the facts developed in the Investigation,
and in the absence of material new evidence related to this
matter, it will not use the facts developed in this Investigation
through the Effective Date of this Consent Decree or the
existence of this Consent Decree to institute on its own motion
any proceeding, formal or informal, or take any action on its own
motion against Talk America with respect to its basic
qualifications, including its character qualifications, to be a
Commission licensee or with respect to compliance with the
Commission's rules and policies.
14. The Bureau and Talk America agree that this Consent
Decree does not constitute either an adjudication on the merits
or a factual or legal finding or determination regarding any
compliance or noncompliance with the requirements of the
Commission's rules. The parties agree that this Consent Decree
is for settlement purposes only and that by agreeing to this
Consent Decree, Talk America does not admit or deny liability for
violating Commission rules in connection with the matters that
are the subject of this Consent Decree.
15. Talk America shall make a voluntary contribution to the
United States Treasury in the total amount of four hundred and
seventy-five thousand dollars ($ 475,000.00) The payment shall
be made within thirty (30) days of the Effective Date of this
Consent Decree. The payment shall be made, without further
protest or recourse, by check, wire transfer, or money order
drawn to the order of the Federal Communications Commission, and
the check, wire transfer or money order shall refer to: "FCC File
No. EB-00-TC-007''; ``NAL/ Acct. No. 20033217004''; ``FRN No.
0004319430.'' If Talk America makes this payment by check or
money order, it must mail the check or money order to the
Forfeiture Collection Section, Finance Branch, Federal
Communications Commission, P.O. Box 73482, Chicago, Illinois
60673-7482. If Talk America makes this payment by wire transfer,
it must wire such payment in accordance with Commission
procedures for wire transfers.
16. Talk America shall not knowingly submit to any LEC any
preferred carrier change request unless Talk America has complied
with all Commission rules and orders concerning preferred local
exchange, interexchange, and/or intraLATA carrier changes in
effect, or as they may be hereafter modified or amended.
17. With respect to outbound telemarketing, the Company
represents that it has terminated its relationship with its
former telemarketing agent, Traffix (formerly known as Quintel
Corporation) because of the Company's belief that its agent
engaged in unauthorized marketing promotions and practices and
agrees not to rehire Traffix. The Company will not permit the use
of marketing materials, promotions and practices by its
telemarketing agents without the Company's prior approval and the
Company will require prior approval of all marketing materials
used by third parties hired to conduct marketing on the Company's
behalf. The Company represents that it will intensify its
scrutiny of its internal and external telemarketing forces. The
Company represents that will create a permanent centralized
regulatory department in New Hope, Pennsylvania to ensure uniform
and expeditious Company responses to customer complaints and a
heightened awareness of potential problems. Talk America will
enforce a zero tolerance policy with respect to unauthorized
preferred carrier changes by telemarketers or third party
verification entities such that any employee or independent
contractor who violates the foregoing policy will be terminated
immediately. The Company will conduct remote and random
monitoring of telemarketing calls and to review its telemarketing
and verification scripts to ensure full compliance with federal
and state rules regarding the solicitation of customers and the
unauthorized preferred carrier changes. Talk America will review
and approve its direct mail and on-line promotional campaigns in
accordance with its zero-tolerance policy. Talk America will
distribute, within 60 days of the Effective Date of this Consent
Decree, a comprehensive sales training manual, which it will
distribute to all of its telemarketing agents and employees to
provide them with centralized information, including the
Company's zero tolerance policy against unauthorized preferred
carrier changes and the Company policies with which all
telemarketing agencies and employees must comply, including
compliance with Section 258 of the Communications Act and
implementing rules.
18. To address the issue of whether Talk America has sent
promotional checks to prospective customers with incorrect BTNs,
Talk America will implement procedures to improve the accuracy in
its issuance of promotional checks. For local customers, Talk
America will manually compare the customer service record
(``CSR'') that it receives from the LEC to the name and address
of the customer who approves the sale. For long distance
customers, the Company will put in place an automated system that
matches up the billing name and address (``BNA'') provided by the
LEC with the telephone numbers the company has on file for the
customer. Talk America will fully implement this system within
60 days of the Effective Date of this Consent Decree. In
instances where the customer name/BTN matches are incorrect, the
Company will not proceed further with the processing of the
order, but instead will assign its provisioning staff to manually
check the BNA with the telephone number(s). Talk America
represents that it has no plans, at this time, to resume issuing
promotional checks. To the extent that it determines to do so in
the future, however, Talk America will use all commercially
reasonable efforts to ensure that a consumer's preferred carrier
is not switched based on the use of promotional checks until and
unless the customer's information first has been verified.
19. As of the Effective Date of this Consent Decree, Talk
America has corrected an internal billing programming error that
causes some consumers to receive incorrect bills for dial-around
service that contain the monthly fees commonly applied to
presubscribed customers. The Company has made significant changes
in its billing programs and will endeavor to make any future
changes necessary to ensure against any future recurrence of this
type of error. Additionally, Talk America will segregate the
casual or dial-around customers at issue from the rest of its
customer pool so that these customers cannot again be billed en
masse for monthly fees applicable to presubscribed customers. To
the extent that any billing errors occur in the future, Talk
America, as it has in the past, expeditiously will inform all
affected customers, state regulators and the Bureau, and take the
necessary steps to issue appropriate refunds or credits to
affected customers.
20. With respect to issues involving customer difficulty in
regard to cancellation, disconnection, or reconnection, Talk
America commits to resolving all operational problems within its
control that have occurred as a result of its entry into the
provision of local exchange service. Talk America has hired and
will maintain a sufficient number of customer service and
provisioning staff to handle the volume of cancellation orders
received, and has and will continue to ensure that these
employees are thoroughly trained to accurately and expeditiously
process the cancellation orders that the Company receives. To
this end, the Company has trained and will maintain sufficient
customer service representatives to process cancellation orders
in order to prevent, as much as possible, such orders from being
sent to the LEC in error. Second, in instances in which
customers have placed disconnection or cancellation orders
directly with the LECs resulting in inaccurate or missing
cancellation orders for Talk America, the Company will work with
the LECs to achieve fair and expeditious problem resolution. In
addition, Talk America will expeditiously process cancellation
orders. If a customer is billed for a time period for which the
customer should not have been served by Talk America, the Company
will immediately issue a customer credit to cover charges
collected during such time period.
21. Talk America will provide prompt redress to any
consumer affected by actions of the Company that do not conform
to the Commission's rules and orders, as they may be hereafter
modified or amended, or that do not conform to the agreements
reached in this Consent Decree.
22. Within six (6) months of the Effective Date of
this Consent Decree and every one-hundred and eighty (180)
calendar days thereafter for the duration of this Consent Decree,
Talk America agrees to submit a report to the Bureau detailing
Talk America's compliance with all terms and conditions of this
Consent Decree, and Talk America's record with respect to
unauthorized preferred carrier changes. The report shall
describe the methods and materials used in verifying customer
preferred carrier change authorizations. The report shall
include the percentage of preferred carrier changes submitted to
LECs or other entities that were disputed by consumers, the
nature of each dispute, and a description of action or actions
taken by Talk America to resolve such disputes. The report shall
also include a list, sorted by state, of every complainant
alleging the unauthorized conversion of his/her telephone service
through any marketing program.
23. Beginning with the Effective Date of this Consent
Decree, and for two (2) years following the filing of any
consumer complaint, as described below, against the Company
during the duration of the Consent Decree, Talk America will
maintain business records reflecting its record of compliance
with the terms and provisions of this Consent Decree. Such
business records shall include, but are not limited to,
advertisements, sales scripts, presentations or manuals, third
party verification tapes, written advisories to sales
distributors or agents and required responses to those
advisories, Letters of Agency, preferred carrier change records,
billing records, and all written consumer complaints filed
directly with Talk America and those complaints filed against, or
otherwise submitted to, the Company in any local, state or
federal jurisdiction served. The record of consumer complaints
shall include the name, address and telephone number of each
complainant, Talk America's response, and the final disposition,
if any, of each such complaint. For the purposes of this
provision, consumer complaint records shall include all writings,
computer records, electronic or e-mail communications, and all
written notes regarding such writings, verbal discussions, and
electronic mail communications. Talk America will maintain such
records in an accurate and easy-to-review format. Within fifteen
(15) business days of the receipt of a written request from the
Commission, Talk America shall make all such business records
available to the requesting entity. In addition, Talk America
agrees that, upon request, the Commission shall have reasonable
access to Talk America's operational, marketing, and verification
facilities, including the facilities of independent third party
verifiers.
24. Talk America agrees that it shall notify the Chief,
Telecommunications Consumers Division, Enforcement Bureau,
Federal Communications Commission, Washington, D.C. 20554, at
least thirty (30) days prior to the date of any material change
in Talk America's legal status or corporate structure that may
materially affect its obligations hereunder, including but not
limited to, merger, incorporation, dissolution, assignment, or
any other change that may materially affect Talk America's
obligations under this Consent Decree. 25. This consent decree may be signed in counterparts.
For the Enforcement Bureau, For Talk America,
Inc.
Federal Communications Commission
By: ___________________________ By:
___________________________
David H. Solomon Aloysius T. Lawn
Chief, Enforcement Bureau Executive Vice President,
General Federal Communications Commission Counsel and
Secretary
___________________________ ___________________________
Date Date
_________________________
1 47 U.S.C. § 258; 47 C.F.R. § 64.1120; 47 U.S.C. § 201(b).