The U.S. Federal Communications Commission (FCC) has issued a major fine against a Michigan-based company for allegedly switching consumers’ designated long-distance carriers without their permission (a practice known as “slamming”), and then adding additional, unauthorized charges to their telephone bills (“cramming”).
According to a Forfeiture Notice issued in late March, the FCC has assessed the Long Distance Consolidated Billing Company (LDCB) of Waterford, MI a total of $2.32 million in fines in connection with 38 identified instances of slamming and cramming. The FCC’s action follows its review of more than 70 complaints received by the FCC as well as state regulatory agencies and the Better Business Bureau regarding the company’s practices. That review determined that the company repeatedly misrepresented its identity to consumers, including making false statements in response to direct questions from consumers regarding the true identity of callers from the company.
Section 258 of the federal Communications Act prohibits carriers from changing a subscriber’s selection of telephone service providers without their explicit permission. The Commission’s forfeiture guidelines have established a base forfeiture amount of $40,000 for each instance of slamming or cramming. But the guidelines permit these amounts to be increased to as much as $160,000 per instance in cases that involve misrepresentation. Citing LDCB’s actions, the Commission chose to do just that in connection with 11 of the 38 apparent violations, but later reducing the fine upon appeal since two of the instances occurred outside of the applicable one-year statute of limitations.