“Slamming and cramming” might sound more appropriate in professional wrestling than telecommunications, but it’s the Federal Communications Commission and not the WWE that’s making moves in this area. On June 7, the Commission approved new rules aimed at stopping both slamming and cramming by telecommunications carriers, which we’ve summarized below. On August 16, these new rules will go into effect.
“Slamming” refers to a change being made in a consumer’s telephone service provider without the consumer’s permission. According to the new standard, slamming can happen whenever there is a “material misrepresentation,” which could be the result of false information in a sales call or the falsification of a consumer’s verification. The FCC is concerned that telephone companies use falsified confirmations to satisfy the third-party verification system, which is one of the approved mechanisms by which a company can establish the consumer’s switch. Some companies have done this by recording affirmative language from a consumer in one phone call and playing that same sound bite in the call establishing third-party verification, all without the consumer’s consent or knowledge. To further discourage that specific practice, companies that misuse the third-party verification system are now subject to a five-year suspension from its use. The new rule also codifies procedural hurdles leveled against companies accused of slamming. Once a consumer claims a misrepresentation occurred, then the burden is on the telephone company to prove its absence. And if a material misrepresentation on a call has been established, then even evidence of consumer authorization will not change this determination. “Cramming” is more straightforward – it’s when phone companies add charges to a bill for services that were never authorized by the consumer.
Slamming and cramming were not permitted practices before this action, but through this order the FCC is expressly prohibiting them. This rule bans material misrepresentations that cause a consumer to switch providers, i.e. slamming, and adding unauthorized charges to a consumer’s telephone bill, i.e. cramming. By explicitly banning these practices, the FCC hopes to provide greater clarity to these issues and deter non-compliant industry action. The FCC also continues to further that same goal through enforcement action. For example, in April the Commission proposed a $5,323,322 penalty on a phone company for slamming and cramming, as well as providing false evidence. Considering the upcoming implementation of the final rule as well as recent enforcement in this area, we recommend that you ensure your current practices are compliant.