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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
)
In the Matter of File No. EB-09-TC-433
)
Silv Communication Inc. NAL/Acct. No. 201032170002
)
Apparent Liability for Forfeiture FRN: 0006087761
)
)
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: May 12, 2010 Released: May 12, 2010
By the Commission:
I. INTRODUCTION and background
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
that Silv Communication Inc. ("Silv") apparently willfully and
repeatedly violated sections 258 and 201(b) of the Communications Act
of 1934, as amended (the "Act"), and section 64.1120 of the
Commission's rules. As discussed in more detail herein, we have
complaints from twenty-five consumers who contend that Silv changed
their telecommunications carriers without authorization. Of the
twenty-five complainants, twelve were told by the telemarketer,
untruthfully, that they were changing to another plan offered by their
current carrier or that the caller was merely verifying information
regarding their current account. We find that Silv has apparently
changed the preferred carriers of these twenty-five consumers without
proper authorization, a practice commonly known as "slamming." Silv
apparently failed to follow our rules with respect to the third party
verifications in all of these twenty-five cases and, in twelve
instances, apparently engaged in unjust and unreasonable marketing
practices as well. Based upon our review of the facts and
circumstances surrounding these apparent violations, we propose a
monetary forfeiture of $1,480,000 against Silv for the apparent
violations described herein.
2. Silv's apparent violations are discussed individually in detail below.
Briefly, Silv is a non-facilities-based interexchange carrier, based
in Los Angeles, California. Silv has been in business since 2001 and
operates in thirty states. The Commission has received numerous
slamming complaints against Silv through our informal complaints
process. Informal complaints are processed by the Commission's
Consumer and Governmental Affairs Bureau ("CGB"). When such complaints
are filed with the Commission, the carrier, e.g., Silv, is contacted
and given a copy of the complaint. After reviewing the carrier's
response to the consumer's complaint, CGB then rules on whether the
carrier violated our rules. While CGB's informal complaints process
addresses and resolves individual consumer complaints, the volume of
slamming complaints against Silv reflects a systemic problem involving
violations of our rules that the Commission must address. Accordingly,
the Enforcement Bureau ("Bureau") sent Silv a Letter of Inquiry
("LOI") on September 25, 2009, directing the company to answer a
number of questions regarding its business practices and its
compliance with various Commission rules. Silv submitted a response to
the LOI on October 22, 2009. Following receipt of Silv's response to
the first LOI, the Bureau sent a second LOI to Silv on November 20,
2009. Silv responded, in part, on December 4, 2009. Silv updated its
response on December 11, 2009. The second LOI followed up on several
questions raised in the first LOI and also requested copies of
complaints that were not provided by Silv in response to the first
LOI.
II. discussion
3. At issue here is whether Silv changed the preferred carrier of the
complainants without the proper authorization, in violation of section
258 of the Act and our rules. In addition, we consider whether Silv
engaged in unjust and unreasonable marketing practices in violation of
section 201(b) of the Act.
4. As noted above, CGB reviews informal slamming complaints to determine
if the complaints should be granted or denied. All twenty-five
complaints listed in the Appendix have been granted by CGB on the
basis of incorrect statements made by the third party verifier, a
violation of section 64.1120 of our rules.
A. Section 201(b) violations
5. Section 201(b) prohibits "unjust and unreasonable" practices by common
carriers "in connection with" communications service. In addition to
Silv's third party verification rule violations discussed below, we
are concerned about the apparent misrepresentations made by Silv's
telemarketer. Out of the twenty-five complainants, twelve contend they
were told by Silv's telemarketer that they were changing to another
plan offered by their current carrier or that the caller was verifying
information regarding their current account. For example, Complainant
Hohe states that she was told that the telemarketer was from AT&T and
that AT&T was lowering her long distance rates. Complainant Ferguson
alleges that she was told that the caller was just verifying
information for her current AT&T account. Complainant Gralike states:
"[s]omeone called and said they were AT&T [and] my current plan was
expiring and they had a good deal for my new plan since there is
competition. I asked 3 times if they were AT&T."
6. In its response, Silv admits that its "former telemarketing company
had employed individuals who may have implied a connection to AT&T or
Qwest." According to Silv, it "first became aware ... that its former
telemarketing company had employed individuals who may have implied a
connection with AT&T or Qwest on February 16, 2009." As discussed
above, Silv received copies of all complaints filed with the
Commission and was, therefore, on notice of all the complainants'
allegations. Silv "contacted its telemarketing company and demanded
that the individuals be immediately terminated." Silv advised the
telemarketing company of this issue by telephone on February 16, 2009
and by letter on February 26, 2009, but did not terminate the contract
until September 18, 2009. Our review of the complaints reveals that
during this seven month period, and despite the fact that the contract
between the parties required the telemarketer to comply with all
"federal and state telemarketing regulations," Silv continued to
receive complaints contending that the telemarketer was claiming
affiliation with other carriers. For example, in May 2009, Complainant
Murray contends that he was told that the caller was from Qwest and
was offering a lower rate; and Complainant Stockwell alleges that he
was told, in September 2009, that the caller was a Frontier
representative and that he was due a credit for excess charges. Yet,
despite notice that this problem was ongoing, Silv permitted the
misrepresentations to continue.
7. Silv acknowledges that misrepresentations of the nature described by
the complainants did indeed occur and provides no evidence to counter
the complainants' claims. As discussed above, carriers are held
responsible for the actions of their agents. Furthermore, we are
troubled that by failing to address the misrepresentations with its
telemarketer in a timely fashion, Silv's actions contributed to seven
months of additional apparent rule violations. As noted above, section
201(b) prohibits "unjust and unreasonable" practices by common
carriers "in connection with" communications service." These marketing
practices were related directly to Silv's provision of long distance
service to the complainants and were therefore in connection with
Silv's communications service. Consistent with Commission precedent,
we find that the misrepresentations described above constitute unjust
and unreasonable practices in violation of section 201(b). We
therefore conclude that Silv apparently willfully or repeatedly
violated section 201(b) of the Act by engaging in unjust and
unreasonable telemarketing practices for twelve of the complainants
listed in the Appendix. Accordingly, a proposed forfeiture is
warranted against Silv for these apparent willful or repeated
violations.
A. Section 258 Violations
8. Section 258 of the Act prohibits the practice of "slamming," the
submission or execution of an unauthorized change in a subscriber's
selection of a provider of telephone exchange service or telephone
toll service ("preferred carrier"). Section 258 of the Act makes it
unlawful for any telecommunications carrier to "submit or execute a
change in a subscriber's selection of a provider of telephone exchange
service or telephone toll service except in accordance with such
verification procedures as the Commission shall prescribe."
9. In accordance with section 258, section 64.1120(a) of the Commission's
rules prescribes that no carrier "shall submit a change on the behalf
of a subscriber . . . prior to obtaining: (i) Authorization from the
subscriber, and (ii) Verification of that authorization in accordance
with the procedures prescribed in this section." Specifically, a
carrier must: (1) obtain the subscriber's written or electronically
signed authorization in a format that meets the requirements of
section 64.1130; (2) obtain confirmation from the subscriber via a
toll-free number provided exclusively for the purpose of confirming
orders electronically; or (3) utilize an independent third party to
verify the subscriber's order.
10. For third party verification, our rules require that the verification
method confirm the following: the identity of the subscriber; that the
person on the call is authorized to make the carrier change; that the
person on the call wants to make the change; the names of the carriers
affected by the change; the telephone numbers to be switched; and the
types of service involved. Our rules also require that carriers keep
audio records of the verification for a minimum of two years.
11. Section 64.1120(c)(3)(iii) of our rules prohibits the third party
verification from including any "misleading description of the
transaction..." This rule specifically states that the third party
verification must elicit, among other things, "confirmation that the
person on the call understands that a carrier change, not an upgrade
to existing services, bill consolidation, or any other misleading
description of the transaction is being authorized." In addition, the
rule requires any description of interLATA or long distance service to
convey that it encompasses both international and state-to-state calls
as well as some intrastate calls where applicable. This requirement
was adopted to ensure that consumers understand precisely the service
changes they are approving and to increase consumer confidence,
decrease the administrative costs for carriers, and alleviate the
enforcement burden on the Commission.
12. Each of the twenty-five consumers who filed the complaints that form
the basis of this NAL contends that Silv changed their carriers
without authorization. The consumers contend that they were
incorrectly told that the caller was from his or her own carrier, as
discussed above, or the consumers apparently had no contact with a
telemarketer; in either case, the consumer was unaware of the carrier
change until receiving a bill with charges from Silv. After the
consumers filed complaints with the Commission, Silv provided a copy
of the third party verification recording. We have reviewed the third
party verification tapes submitted by Silv and find that Silv's
verifier either failed to confirm that the consumer wanted to switch
carriers because the verifier incorrectly stated that the purpose of
the recorded conversation was for "quality control and ... data entry
purposes," or failed to confirm the types of service involved by
failing to state that long distance service encompasses international
calls. While these violations may appear to be technical in nature in
this case where the complainants contend that they did not intend to
change carriers at all, this rule is crucial to protect consumers. For
example, if the verifier states, incorrectly, that the call was for
quality control and data entry purposes, the consumer may be unaware
that he agreed to a carrier change until receiving the bill containing
the new charges. If the verifier fails to state that long distance
service includes all international calls, consumers may be unaware
that their international rates had changed until they received their
bills. Consumers who make multiple international calls may choose a
carrier and plan with low international rates and not realize that
their international rates will change when they make a change to their
interLATA long distance carrier. Consumers receiving their bills with
the Silv charges and realizing they were slammed would be further
inconvenienced by needing to contact Silv to negotiate a refund,
contact their previous carrier to have their services switched back or
rate plans changed, and potentially file complaints.
13. In its October 22, 2009 response to the LOI, Silv "concedes that it
has recently experienced an increase in the number of inquiries
regarding unauthorized account transfers." Silv states that "its
former telemarketing company had failed to follow strict guidelines
and scripts, contributing to the increased number of inquiries." Silv
also contends that "the root cause [of problems with verifications
was] the phrasing of third party verifications - as opposed to
material violations of Commission rules." Silv contends that it has
"become more rigorous in proactively monitoring and enforcing script
adherence by its telemarketer and third party verification company
particularly within the past two (2) months when the level of
inquiries began to rise." Silv also stated that it "amended its
verification script to adopt Commission recommendations for compliance
to ensure that the script was undeniably in compliance beginning in
October 2009." Silv contends that it received 49 slamming complaints
in 2008 and 44 slamming complaints as of October 22, 2009 that were
filed with the Commission.
14. Under the authority of section 217 of the Act, the Commission has held
carriers to be responsible for the failures of their telemarketers and
third party verification companies to obtain proper authorization and
verification for changes made to consumers' primary carriers. The
consumers listed in the Appendix all allege that they did not
authorize a carrier change. Silv has failed to provide any evidence
that the carrier changes to the consumers listed in the Appendix were
properly authorized and verified. Furthermore, Silv has failed to
provide any evidence that it should not be held responsible for the
actions of its former telemarketing company or its third party
verification company. We therefore conclude that in each case, Silv
apparently willfully or repeatedly violated a Commission rule by
submitting carrier change orders without proper authorization in
accordance with our rules and section 258 of the Act of every consumer
listed in the Appendix. We propose a forfeiture for these apparent
willful or repeated violations.
III. ForfEIture amount
15. Section 503(b) of the Communications Act authorizes the Commission to
assess a forfeiture of up to $150,000 for each violation of the Act or
of any rule, regulation, or order issued by the Commission under the
Act. The Commission may assess this penalty if it determines that the
carrier's noncompliance is "willful or repeated." For a violation to
be willful, it need not be intentional. In exercising our forfeiture
authority, we are required to take into account "the nature,
circumstances, extent, and gravity of the violation and, with respect
to the violator, the degree of culpability, any history of prior
offenses, ability to pay, and such other matters as justice may
require." In addition, the Commission has established guidelines for
forfeiture amounts and, where there is no specific base amount for a
violation, retained discretion to set an amount on a case-by-case
basis.
16. The Commission's forfeiture guidelines currently establish a base
forfeiture amount of $40,000 for violations of our rules and orders
regarding unauthorized changes of preferred interexchange carriers.
The Commission has warned carriers that it would take swift and
decisive enforcement action, including the imposition of substantial
monetary forfeitures, against any carrier found to have engaged in
slamming. Applying the $40,000 base forfeiture to each of the
twenty-five unauthorized carrier changes would result in a forfeiture
of $1,000,000. In this case, however, Silv's conduct was particularly
egregious, as demonstrated by our conclusion that the company also
violated section 201(b) of the Act in twelve of the cases at issue. We
therefore find that an upward adjustment is appropriate here. In light
of the misrepresentations by Silv's telemarketer and Silv's long delay
in addressing the misrepresentations, we propose an additional $40,000
forfeiture for the twelve instances in which Silv engaged in such
unjust and unreasonable telemarketing practices. This results in an
additional $480,000, for a total forfeiture amount of $1,480,000.
Carriers should be on notice that the Commission considers violations
such as the ones discussed herein to be serious and that future
violations may receive significant upward adjustments.
17. Silv will have an opportunity to submit further evidence and arguments
in response to this NAL to show that no forfeiture should be imposed
or that some lesser amount should be assessed.
IV. conclusion and ordering clauses
18. We have determined that Silv Communication Inc. has apparently
willfully or repeatedly violated sections 201(b) and 258 of the
Communications Act, as amended, 47 U.S.C. S:S: 201(b), 258, and
section 64.1120 of the Commission's rules, 47 C.F.R. S: 64.1120.
19. Accordingly, IT IS ORDERED, pursuant to section 503(b) of the
Communications Act of 1934, as amended, 47 U.S.C. S: 503(b), section
1.80 of the Commission's rules, 47 C.F.R. S: 1.80, that Silv
Communication Inc. is HEREBY NOTIFIED of its Apparent Liability for
Forfeiture in the amount of $1,480,000 for willful or repeated
violations of sections 201(b) and 258 of the Act, 47 U.S.C. S:S:
201(b), 258, and section 64.1120 of the Commission's rules and orders
as described above.
20. IT IS FURTHER ORDERED THAT, pursuant to section 1.80 of the
Commission's rules, within thirty (30) days of the release date of
this Notice of Apparent Liability for Forfeiture, Silv Communication
Inc. SHALL PAY the full amount of the proposed forfeiture or SHALL
FILE a written statement seeking reduction or cancellation of the
proposed forfeiture.
21. Payment of the forfeiture must be made by check or similar instrument,
payable to the order of the Federal Communications Commission. The
payment must include the NAL/Account Number and FRN Number referenced
above. Payment by check or money order may be mailed to Federal
Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000.
Payment by overnight mail may be sent to U.S. Bank - Government
Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO
63101. Payment by wire transfer may be made to ABA Number 021030004,
receiving bank TREAS/NYC, and account number 27000001. For payment by
credit card, an FCC Form 159 (Remittance Advice) must be submitted.
When completing the FCC Form 159, enter the NAL/Account number in
block number 23A (call sign/other ID), and enter the letters "FORF" in
block number 24A (payment type code). Silv will also send electronic
notification on the date said payment is made to johnny.drake@fcc.gov.
Requests for full payment under an installment plan should be sent
to: Chief Financial Officer -- Financial Operations, 445 12th Street,
S.W., Room 1-A625, Washington, D.C. 20554. Please contact the
Financial Operations Group Help Desk at 1-877-480-3201 or Email:
ARINQUIRIES@fcc.gov with any questions regarding payment procedures.
22. The response, if any, must be mailed both to the Office of the
Secretary, Federal Communications Commission, 445 12th Street, SW,
Washington, DC 20554, ATTN: Enforcement Bureau - Telecommunications
Consumers Division, and to Marcy Greene, Deputy Chief,
Telecommunications Consumers Division, Enforcement Bureau, Federal
Communications Commission, 445 12th Street, SW, Washington, DC 20554,
and must include the NAL/Acct. No. referenced in the caption.
23. The Commission will not consider reducing or canceling a forfeiture in
response to a claim of inability to pay unless the petitioner submits:
(1) federal tax returns for the most recent three-year period; (2)
financial statements prepared according to generally accepted
accounting practices; or (3) some other reliable and objective
documentation that accurately reflects the petitioner's current
financial status. Any claim of inability to pay must specifically
identify the basis for the claim by reference to the financial
documentation submitted.
24. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability
for Forfeiture shall be sent by Certified Mail Return Receipt
Requested and First Class Mail to the company at 3460 Wilshire Blvd.,
Suite 1103, Los Angeles, CA 90010 and to Andrew O. Isar, Regulatory
Consultant to Silv Communication Inc., 4423 Point Fosdick Drive, NW,
Suite 306, Gig Harbor, WA 98335.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch Secretary
APPENDIX
List of Complaints
Date of
carrier
Commission change
File no., if (per Silv, Consumer's
Complainant filed with phone explanation CGB Order
FCC bill, or
complaint)
or date of
TPV
Was told by Granted by CGB.
someone from See Silv
AT&T billing Communication
department Inc., Complaints
that she was Regarding
M. Eiken 09-S0296014 5/13/09 being charged Unauthorized
at a higher Change of
rate than her Subscriber's
plan stated Telecommunications
and it was Carrier, 24 FCC
being fixed. Rcd 11226 (CGB
2009).
Granted by CGB.
See Silv
Was told that Communication
they were just Inc., Complaints
verifying Regarding
C. Ferguson 09-R2141661S 5/13/09 information Unauthorized
for her Change of
current AT&T Subscriber's
account Telecommunications
Carrier, 24 FCC
Rcd 13421 (CGB
2009).
Granted by CGB.
See Silv
Communication
Caller said Inc., Complaint
she was from Regarding
E. Hohe 09-S0296736 5/19/09 AT&T, offering Unauthorized
a discount Change of
rate Subscriber's
Telecommunications
Carrier, 24 FCC
Rcd 13454 (CGB
2009).
Granted by CGB.
See Silv
Communication
Told that the Inc., Complaint
carrier was Regarding
G. Murray 09-S002478 5/20/09 Qwest and was Unauthorized
offering a Change of
lower rate Subscriber's
Telecommunications
Carrier, 24 FCC
Rcd 13359 (CGB
2009).
Granted by CGB.
See Silv
Communication
Inc., Complaints
Was told that Regarding
R. Wade 09-S0296379 5/20/09 the carrier Unauthorized
was AT&T Change of
Subscriber's
Telecommunications
Carrier, 24 FCC
Rcd 13376 (CGB
2009).
Granted by CGB.
See Silv
Communication
Inc., Complaint
Did not agree Regarding
K. Pearson 09-S0296397 5/20/09 to change Unauthorized
carriers Change of
Subscriber's
Telecommunications
Carrier, 24 FCC
Rcd 13359 (CGB
2009).
Granted by CGB.
See Silv
Communication
Inc., Complaint
Phone bill had Regarding
T. Mitchell 09-S0296808 5/27/09 charges from Unauthorized
Silv Change of
Subscriber's
Telecommunications
Carrier, 24 FCC
Rcd 14199 (CGB
2009).
Granted by CGB.
See Silv
Communication
Told that the Inc., Complaints
carrier was Regarding
J. Kendrick 09-S0296351 6/6/09 AT&T and she Unauthorized
was asked to Change of
verify her Subscriber's
phone numbers Telecommunications
Carrier, 24 FCC
Rcd 13376 (CGB
2009).
Granted by CGB.
See Silv
Told that the Communication
carrier was Inc., Complaints
AT&T and she Regarding
T. Meyers-Keeling 09-S002454 6/12/09 was not Unauthorized
switching Change of
companies, Subscriber's
just getting a Telecommunications
discount Carrier, 24 FCC
Rcd 10031 (CGB
2009).
Granted by CGB.
See Silv
Communication
Inc., Complaint
Phone bill had Regarding
A. Wright 09-S002457 6/12/09 charges from Unauthorized
Silv Change of
Subscriber's
Telecommunications
Carrier, 24 FCC
Rcd 11107 (CGB
2009).
Granted by CGB.
See Silv
Told that the Communication
carrier was Inc., Complaints
AT&T and they Regarding
K. Gralike 09-S0296703 6/19/09 had new rates Unauthorized
to offer her Change of
due to Subscriber's
competition Telecommunications
Carrier, 24 FCC
Rcd 13421 (CGB
2009).
Granted by CGB.
See Silv
Communication
Inc., Complaint
Phone bill had Regarding
P. Dean 09-S0296744 6/23/09 charges from Unauthorized
Silv Change of
Subscriber's
Telecommunications
Carrier, 24 FCC
Rcd 13359 (CGB
2009).
Granted by CGB.
See Silv
Communication
Inc., Complaint
Silv informed Regarding
Verizon that Unauthorized
C. Justice 09-S002562 6/29/09 he had Change of
switched Subscriber's
carriers Telecommunications
Carrier, DA
10-302, rel. Feb.
24, 2010 (CGB
2010).
Caller,
claiming to be
from
CenturyTel, Granted by CGB.
said she would See Silv
get a credit Communication
on her next Inc., Complaint
bill and had Regarding
to verify Unauthorized
T. Rhoads 09-S0296906 7/3/09 information Change of
and answer Subscriber's
questions Telecommunications
"yes" or "no". Carrier, DA
In her next 10-301, rel. Feb.
bill she saw 24, 2010 (CGB
that she had 2010).
changed
carriers from
CenturyTel to
Silv.
Granted by CGB .
See Silv
Was never Communication
contacted by Inc., Complaint
Silv to change Regarding
N. Spargo 09-S0296661 7/6/09 carriers, was Unauthorized
switched Change of
without Subscriber's
knowledge Telecommunications
Carrier, 24 FCC
Rcd 13450 (CGB
2009).
Granted by CGB.
See Silv
Communication
Caller said Inc., Complaint
she was from Regarding
Verizon and Unauthorized
J. Gehman 09-S0296891 7/6/09 would reduce Change of
rates due to Subscriber's
competition Telecommunications
Carrier, DA
10-302, rel. Feb.
24, 2010 (CGB
2010).
Granted by CGB.
See Silv
Communication
Inc., Complaint
Regarding
Thought the Unauthorized
B. Wexler 09-S0297092 7/20/09 call was from Change of
AT&T Subscriber's
Telecommunications
Carrier, DA
10-301, rel. Feb.
24, 2010 (CGB
2010).
Granted by CGB.
See Silv
Communication
Inc., Complaint
Verizon told Regarding
him he had Unauthorized
W. Snipes 09-S0296820 8/13/09 switched Change of
carriers Subscriber's
Telecommunications
Carrier, DA
10-301, rel. Feb.
24, 2010 (CGB
2010).
Granted by CGB.
See Silv
Communication
Inc., Complaint
Regarding
Unauthorized
D. Picatte 10-S0297368 8/24/09 Change of
Subscriber's
Telecommunications
Carrier, DA
10-301, rel. Feb.
24, 2010 (CGB
2010).
Granted by CGB.
See Silv
Caller stated Communication
she was a Inc., Complaint
Frontier Regarding
representative Unauthorized
D. Stockwell 09-S002568 9/14/09 and they were Change of
due a credit Subscriber's
for excess Telecommunications
charges Carrier, DA
10-301, rel. Feb.
24, 2010 (CGB
2010).
Was called by Granted by CGB.
telemarketer See Silv
about a web Communication
site, which he Inc., Complaint
declined Regarding
because he Unauthorized
D. Swineford 09-S0297077 9/14/09 does not have Change of
Internet Subscriber's
access. He Telecommunications
found out he Carrier, DA
was slammed 10-301, rel. Feb.
when he got 24, 2010 (CGB
his phone 2010).
bill.
Granted by CGB.
See Silv
Communication
Inc., Complaint
Regarding
Unauthorized
L. Sadler 09-S0297287 9/30/09 Change of
Subscriber's
Telecommunications
Carrier, DA
10-301, rel. Feb.
24, 2010 (CGB
2010).
Granted by CGB.
See Silv
Communication
Was never Inc., Complaint
contacted by Regarding
Silv; first Unauthorized
D. Wallen 09-S0297140 10/5/09 notice of the Change of
additional Subscriber's
Silv line was Telecommunications
in phone bill Carrier, DA
10-302, rel. Feb.
24, 2010 (CGB
2010).
Granted by CGB.
See Silv
Communication
Inc., Complaint
Regarding
Unauthorized
S. Smith 09-S0297296 10/14/09 Change of
Subscriber's
Telecommunications
Carrier, DA
10-301, rel. Feb.
24, 2010 (CGB
2010).
Granted by CGB.
See Silv
Communication
Inc., Complaint
Regarding
L. Unauthorized
Sweeney-Christensen 09-S002656 11/21/09 Change of
Subscriber's
Telecommunications
Carrier, DA
10-301, rel. Feb.
24, 2010 (CGB
2010).
47 U.S.C. S: 503(b)(1). The Commission has the authority under this
section of the Communications Act of 1934, as amended (the "Act") to
assess a forfeiture against any person who has "willfully or repeatedly
failed to comply with any of the provisions of this Act or of any rule,
regulation, or order issued by the Commission under this Act ...."
47 U.S.C. S:S: 201(b), 258.
47 C.F.R. S: 64.1120.
This forfeiture amount is based on the Commission's forfeiture guidelines
of $40,000 for each of the twenty-five violations, see 47 C.F.R. S:
1.80(b)(4), with an additional $40,000 upward adjustment for twelve of the
apparent violations due to the apparent unjust and unreasonable
telemarketing practices and based on our finding that these acts were
egregious and intentional. See Business Discount Plan, Inc. Apparent
Liability for Forfeiture, Order of Forfeiture, 15 FCC Rcd 14461 (2000)
("BDP Forfeiture Order").
See Appendix for a list of complaints.
See http://www.fcc.gov/cgb/.
In the course of this investigation, Silv produced over one hundred
complaints filed within a twelve month period, of which a large majority
involved the type of misrepresentations addressed herein. Many complaints
are handled by state commissions instead of by CGB; this NAL is limited to
Silv complaints filed with CGB arising out of slamming incidents within
the previous twelve months.
Letter from Kimberly A. Wild, Assistant Division Chief, Telecommunications
Consumers Division, Enforcement Bureau, Federal Communications Commission,
to Maria Zepeda, Vice President, Silv Communication Inc. (Sept. 25, 2009)
("LOI").
Letter from Andrew O. Isar, Regulatory Consultant to Silv Communication
Inc. to Kimberly A. Wild and Mika Savir, (Oct. 22, 2009) ("Response to
LOI").
Letter from Kimberly A. Wild, Assistant Division Chief, Telecommunications
Consumers Division, Enforcement Bureau, Federal Communications Commission,
to Maria Zepeda, Vice President, Silv Communication Inc. (Nov. 20, 2009)
("Second LOI").
Letter from Andrew O. Isar, Regulatory Consultant to Silv Communication
Inc. to Kimberly A. Wild and Mika Savir (Dec. 4, 2009) ("Response to
Second LOI").
See email from Maria Zepeda to Kimberly A. Wild (Dec. 11, 2009) ("Updated
Response to Second LOI").
47 U.S.C. S: 258; 47 C.F.R. S: 64.1120.
Section 201(b) states in pertinent part that "all charges, practices,
classifications, and regulations for and in connection with communications
service shall be just and reasonable ...." 47 U.S.C. S: 201(b).
In the reviewing process, CGB reviews the consumer's complaint, contacts
the carrier and reviews the carrier's response to the complaint, and makes
a factual determination regarding whether the carrier violated the
Commission's rules. The complaint is granted if CGB determines the carrier
violated our rules and is denied if no violation is found.
See Silv Communication Inc., Complaints Regarding Unauthorized Change of
Subscriber's Telecommunications Carrier, 24 FCC Rcd 10111 (CGB 2009); Silv
Communication Inc., Complaints Regarding Unauthorized Change of
Subscriber's Telecommunications Carrier, 24 FCC Rcd 10031 (CGB 2009); Silv
Communication Inc., Complaints Regarding Unauthorized Change of
Subscriber's Telecommunications Carrier, 24 FCC Rcd 11071 (CGB 2009); Silv
Communication Inc., Complaints Regarding Unauthorized Change of
Subscriber's Telecommunications Carrier, 24 FCC Rcd 11226 (CGB 2009); Silv
Communication Inc., Complaint Regarding Unauthorized Change of
Subscriber's Telecommunications Carrier, 24 FCC Rcd 11107 (CGB 2009); Silv
Communication Inc., Complaints Regarding Unauthorized Change of
Subscriber's Telecommunications Carrier, 24 FCC Rcd 11086 (CGB 2009); Silv
Communication Inc., Complaints Regarding Unauthorized Change of
Subscriber's Telecommunications Carrier, 24 FCC Rcd 13421 (CGB 2009); Silv
Communication Inc., Complaints Regarding Unauthorized Change of
Subscriber's Telecommunications Carrier, 24 FCC Rcd 13376 (CGB 2009); Silv
Communication Inc., Complaint Regarding Unauthorized Change of
Subscriber's Telecommunications Carrier, 24 FCC Rcd 13359 (CGB 2009); Silv
Communication Inc., Complaint Regarding Unauthorized Change of
Subscriber's Telecommunications Carrier, 24 FCC Rcd 13290) (CGB 2009).
47 U.S.C. S: 201(b).
See 47 U.S.C. S: 217. The Commission has held that licensees and other
Commission regulatees are responsible for the acts and omissions of their
employees and independent contractors, and consistently refused to excuse
licensees from forfeiture penalties where actions of employees or
independent contractors have resulted in violations. See Eure Family
Limited Partnership, 17 FCC Rcd. 21861, 21863-21864 (2002) (citing
American Paging, Inc. of Virginia, 12 FCC Rcd 10417, 10420 (Wireless Bur.,
Enf. and Cons. Inf. Div., 1997), quoting Triad Broadcasting Company, Inc.,
96 FCC 2d 1235, 1244 (1984)).
See Appendix.
Complaint # 09-S0296736, granted by CGB. See Silv Communication Inc.,
Complaint Regarding Unauthorized Change of Subscriber's Telecommunications
Carrier, 24 FCC Rcd 13454) (CGB 2009).
Complaint # 09-R2141661S, granted by CGB. See Silv Communication Inc.,
Complaints Regarding Unauthorized Change of Subscriber's
Telecommunications Carrier, 24 FCC Rcd 13421 (CGB 2009).
Complaint # 09-S0296703, granted by CGB. See Silv Communication Inc.,
Complaints Regarding Unauthorized Change of Subscriber's
Telecommunications Carrier, 24 FCC Rcd 13421 (CGB 2009)
Response to LOI at 7-8.
Response to Second LOI at 3.
Response to LOI at 8.
Response to Second LOI at 3. According to Silv, it contacted its
telemarketing company, Nationwide Marketing, about this issue on Feb. 16,
2009 (telephone), Feb. 26, 2009 (letter), May 20, 2009 (telephone), May
28, 2009 (letter), and finally cancelled the contract on Sept. 18, 2009
(letter). Id. at 4.
We note that Silv states that during this time period, the company also
intended to use Nationwide to telemarket for Silv in Tennessee. On May 22,
2009, three months after Silv's first letter to Nationwide regarding this
issue, Silv advised the Tennessee Regulatory Authority that Nationwide
Marketing "strictly complies with federal and state Do-Not-Call list
requirements and other telemarketing requirements, subject further to
strict Company guidelines." See Letter from Andrew O. Isar, Regulatory
Consultant to Silv Communication Inc. to Darlene Standley, Utilities
Division Chief, Tennessee Regulatory Authority (May 22, 2009). See
http://www.state.tn.us/tra/orders/2009/0900054c.pdf.
Response to Second LOI, Attachment 1, p. 2. The contract required the
parties to seek resolution of disagreements through telephone discussions,
mediation, and then arbitration. With respect to termination, the contract
provided that it may be voided at any time by mutual consent.
The following examples, provided by Silv in response to the LOI, show that
this misrepresentation continued each month in 2009: in slamming complaint
IC 09-S0295308, Complainant Smith states that on Jan. 15, 2009, "Mr.
Michael Johnson called and said he was with AT&T and could pass on 35%
savings now because of the economy. I then asked him `are you with AT&T?'
His reply to me was `yes, I am.'" In slamming complaint IC 09-S0295360,
Complainant Warner states that on 2/12/09 a "company called and stated
that they were AT&T. They wanted to offer me a better long distance
rate....They promised a 25% [discount] from what I was paying." In
slamming complaint IC 09-S0295656, Complainant Beverungen states: "In
March 2009 I [received] a call impersonating Verizon stating they have
lower [service] costs for me." In IC 09-C00149027, filed by Complainant
Drost regarding an unauthorized carrier change that took place on Apr. 28,
2009, he states: "This company has been calling me representing itself as
Verizon asking to re-verify my service." In IC 09-S002411, Complainant
Cantrell states: "I received a phone call on the week of May the 11th from
someone claiming to be from AT&T asking if I would like to switch our long
distance service to a business package." Complainant Gralike, IC
09-S0296703, slammed on June 19, 2009, stated: "someone called and said
they were AT&T and my current plan was expiring and they had a good deal
for my new plan since there is competition. I asked 3 times if they were
AT&T." Complainant Gehman, IC 09-S0296891, slammed on July 6, 2009, said
he received a call "who stated she was calling from Verizon and was
pleased to offer a reduction of phone rates [retroactive] to start date.
All I needed to do was to verify the phone numbers." Complainant Suarez,
IC 09-S0297047, slammed on Aug. 20, 2009, stated: "We were contacted [by]
a woman who said she was an AT&T rep, my current provider. She said that
AT&T was lowering their rates for their current customers starting Sept.1,
2009. Then she said that in order to get the discount on my service I need
to confirm that [I] wanted it in a recording." Complainant Johns, IC
09-S0296973, said that on Sept. 23, 2009, "[The] representative, Tiffany,
outright lied about who she worked for. She incorrectly stated that she
worked for Verizon and that Verizon had merged with . . . SILV."
Complainant Rey, IC 09-S0297054, stated: "This company called and
represented itself as our telephone carrier and stated that they had
overcharged us and that we would be [receiving] a service value package
but not a refund."
Complaint # 09-S002478, granted by CGB. See Silv Communication Inc.,
Complaint Regarding Unauthorized Change of Subscriber's Telecommunications
Carrier, 24 FCC Rcd 13359 (CGB 2009).
Complaint # 09-S002568, granted by CGB. See Silv Communication Inc.,
Complaint Regarding Unauthorized Change of Subscriber's Telecommunications
Carrier, DA 10-301, rel. Feb. 24, 2010 (CGB 2010).
47 U.S.C. S: 201(b).
See BDP Forfeiture Order, 15 FCC Rcd at 14468.
47 U.S.C. S: 258(a).
47 U.S.C. S: 258(a).
47 C.F.R. S: 64.1120(a)(1)(i), (ii).
See 47 C.F.R. S: 64.1120(c).
47 C.F.R. S: 64.1120(c)(3)(iii).
47 C.F.R. S: 64.1120(c)(3)(iv).
See 47 C.F.R. S: 64.1120(c)(3)(iii).
Id.
Id.
See Implementation of the Subscriber Carrier Selection Changes Provisions
of the Telecommunications Act of 1996; Policies and Rules Concerning
Unauthorized Changes of Consumers' Long Distance Carriers, CC Docket No.
94-129, Fourth Report and Order, 23 FCC Rcd 493, 493, P: 1 (2008).
See Silv Communication Inc., Complaint Regarding Unauthorized Change of
Subscriber's Telecommunications Carrier, DA 10-301, rel. Feb. 24, 2010
(CGB 2010); Silv Communication Inc., Complaint Regarding Unauthorized
Change of Subscriber's Telecommunications Carrier, DA 10-302, rel. Feb.
24, 2010 (CGB 2010); Silv Communication Inc., Complaint Regarding
Unauthorized Change of Subscriber's Telecommunications Carrier, 24 FCC Rcd
13454 (CGB 2009); Silv Communication Inc., Complaint Regarding
Unauthorized Change of Subscriber's Telecommunications Carrier, 24 FCC Rcd
13450 (CGB 2009); Silv Communication Inc., Complaint Regarding
Unauthorized Change of Subscriber's Telecommunications Carrier, 24 FCC Rcd
14199 (CGB 2009).
See cases cited at supra note 15.
Response to LOI at 1.
Id. at 1-2.
Id. at 2.
Id. at 4.
Id. at 7.
Id. at 6.
47 U.S.C. S: 217.
Section 503(b)(2)(B) provides for forfeitures against common carriers of
up to $150,000 for each violation or each day of a continuing violation up
to a maximum of $1,500,000 for each continuing violation. 47 U.S.C. S:
503(b)(2)(B). See Amendment of Section 1.80 of the Commission's Rules and
Adjustment of Forfeiture Maxima to Reflect Inflation, 15 FCC Rcd 18221
(2000); Amendment of Section 1.80 of the Commission's Rules and Adjustment
of Forfeiture Maxima to Reflect Inflation, 19 FCC Rcd 10945 (2004);
Amendment of Section 1.80 of the Commission's Rules and Adjustment of
Forfeiture Maxima to Reflect Inflation, 23 FCC Rcd 9845 (2008) (increasing
maximum forfeiture amounts to account for inflation). See also FCC
Enforcement Advisory, DA 10-91 (rel. Jan. 15, 2010).
47 U.S.C. S: 503(b)(1)(B) (the Commission has authority under this section
of the Act to assess a forfeiture penalty against a common carrier if the
Commission determines that the carrier has "willfully or repeatedly"
failed to comply with the provisions of the Act or with any rule,
regulation, or order issued by the Commission under the Act); see also 47
U.S.C. S: 503(b)(4)(A) (providing that the Commission must assess such
penalties through the use of a written notice of apparent liability or
notice of opportunity for hearing).
Southern California Broadcasting Co., 6 FCC Rcd 4387 (1991).
See 47 U.S.C. S: 503(b)(2)(D); see also The Commission's Forfeiture Policy
Statement and Amendment of Section 1.80 of the Commission's Rules, 12 FCC
Rcd 17087 (1997) ("Forfeiture Policy Statement"); recon. denied, 15 FCC
Rcd 303 (1999).
Forfeiture Policy Statement, 12 FCC Rcd 17098-99, P: 22.
See 47 C.F.R. S: 1.80(b)(4).
See, e.g., Brittan Communications International Corp., 15 FCC Rcd 4852
(2000); Amer-I-Net Services Corp., 15 FCC Rcd 3118 (2000); All American
Telephone Company, Inc., 13 FCC Rcd 15040 (1998).
47 C.F.R. S: 1.80(b)(4), Note to paragraph (b)(4): Section II. Adjustment
Criteria for Section 503 Forfeitures; Forfeiture Policy Statement, 12 FCC
Rcd at 17117, Appendix A, Section II.
There were twelve instances where the consumers were told, incorrectly,
that they were changing to another plan offered by their current carrier
or that the caller was verifying information regarding their current
account.
In the BDP Forfeiture Order, as in the instant case, BDP's telemarketer
apparently represented that it was affiliated with the customers' existing
carriers. BDP Forfeiture Order, 15 FCC Rcd at 14468. The Commission found
that the telemarketer repeatedly deceived consumers as to BDP's identity
and the nature of its service, and imposed a $40,000 forfeiture for each
instance of slamming and an additional $40,000 forfeiture for each
instance in which BDP engaged in an unjust and unreasonable telemarketing
practice.
47 U.S.C. S: 503(b)(4)(C); 47 C.F.R. S: 1.80(f)(3).
47 C.F.R. S: 1.80.
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