83 FR 33140 - Protecting Consumers From Unauthorized Carrier Changes and Related Unauthorized Charges
FEDERAL COMMUNICATIONS COMMISSION Federal Register Volume 83, Issue 137 (July 17, 2018)
Federal Register Volume 83, Issue 137 (July 17, 2018)
| Page Range | 33140-33143 | |
| FR Document | 2018-14151 |
[Federal Register Volume 83, Number 137 (Tuesday, July 17, 2018)] [Rules and Regulations] [Pages 33140-33143] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-14151] ----------------------------------------------------------------------- FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 64 [CG Docket No. 17-169; FCC 18-78] Protecting Consumers From Unauthorized Carrier Changes and Related Unauthorized Charges AGENCY: Federal Communications Commission. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: In this document, the Commission takes measures to strengthen our rules to protect consumers from slamming and cramming by codifying rules against sales call misrepresentations and cramming and revising rules to improve the effectiveness of the third-party verification (TPV) process. Slamming is an unauthorized change in a consumers' telephone provider and cramming is the placement of an unauthorized charge on the consumers' telephone bill. DATES: Effective August 16, 2018. FOR FURTHER INFORMATION CONTACT: Richard D. Smith, Consumer and Governmental Affairs Bureau (717) 338-2797, email [email protected]. SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report and Order, document FCC 18-78, adopted on June 7, 2018, and released on June 8, 2018, in CG Docket No. 17-169. The full text of document FCC 18-78 will be available for public inspection and copying via the Commission's Electronic Comment Filing System (ECFS), and during regular business hours at the FCC Reference Information Center, Portals II, 445 12th Street SW, Room CY-A257, Washington, DC 20554. To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to [email protected] or call the Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (844) 432-2272 (videophone), or (202) 418- 0432 (TTY). Congressional Review Act The Commission will send a copy of document FCC 18-78 to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A). Final Paperwork Reduction Act of 1995 Analysis The Report and Order does not contain any new or modified information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, therefore, it does not contain any new or modified information collection burden for small business concerns with fewer than 25 employees, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4). Synopsis Misrepresentations on Sales Calls 1. The Commission's recent enforcement actions reveal that misrepresentations on sales calls are a [[Page 33141]] continuing source of slamming. The Commission therefore codifies a rule to prohibit material misrepresentation, including material omissions, in sales calls to further reduce the incidence of slamming. A codified rule is consistent with the Commission's statutory authority and prior enforcement actions. In addition, codifying this prohibition in our rules will provide carriers and consumers with more specific information and notice of this prohibited practice. In so doing, the Commission notes that it revised the Slamming and Cramming NPRM's proposed rule, published at 82 FR 37830, August 14, 2017, on sales calls by deleting the reference to ``deception.'' The Commission finds that this term is vague and subject to an unclear interpretation absent a record to define it. 2. Upon a finding of material misrepresentation in the sales call, the consumer's authorization to change carriers will be deemed invalid even if the carrier has some evidence of consumer authorization of a switch. In this regard, our enforcement cases make clear that sales misrepresentations may not be cured by a facially valid TPV. When a consumer's decision to switch carriers is predicated on false information provided in a sales call, that consumer's authorization to switch carriers can no longer be considered binding. 3. A codified rule is consistent with the Commission's statutory authority and prior enforcement actions. Section 201(b) of the Act states, in pertinent part, that ``[a]ll charges, practices, classifications, and regulations for and in connection with [interstate or foreign] communication service [by wire or radio], shall be just and reasonable, and any such charge, practice, classification, or regulation that is unjust or unreasonable is declared to be unlawful.'' The Commission has found that misrepresentations made by interstate common carriers constitute unjust and unreasonable practices under section 201(b) of the Act. Sales calls that contain misrepresentations undermine the effectiveness of the carrier's validation procedures under Section 258 of the Act, and thus are an unjust and unreasonable practice that is ``in connection with'' the communication service that is the subject of the verification process. 4. Material Violations. The Commission bans only ``material'' misrepresentations on sales calls. In so doing, the Commission acknowledges that occasional minor or trivial inaccuracies that have no bearing on the consumer's decision to switch carriers can occur and may not rise to a level warranting enforcement action, consistent with how the Commission has exercised its enforcement discretion in the past. The Commission declines, however, to require that such misrepresentations also be ``intentional.'' The Commission has never articulated an intentionality standard when it has penalized carriers for misrepresentations on sales calls in the past. Rather, the Commission's forfeiture policies already require that, when determining the appropriate adjustment to a base forfeiture amount (rather than whether the act is a violation), the Commission considers ``egregious conduct'' and ``intentional violation'' consistent with section 503 of the Act. The Commission believes this allows sufficient flexibility to take ``intent'' into consideration as an aggravating or mitigating factor when a violation of this rule occurs. 5. Defining ``Sales Call.'' The Commission's slamming rules are designed to prevent a provider from switching a consumer's preferred carrier without the consumer's permission. 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.'' Thus, for purposes of the slamming rules, the Commission clarifies that a ``sales call'' is any telephone call in which a carrier encourages a subscriber to submit or execute a change in the subscriber's provider of telephone exchange service or telephone toll service. 6. Recording Sales Calls. The Commission declines to mandate that sales calls be recorded. Although the Commission agrees with commenters that recordings would aid in determining whether a misrepresentation occurred, the record contains unrebutted evidence that any such mandate would necessitate industry-wide installation of recording technologies, amending existing protocols with vendors that make such calls on carriers' behalf, recording large numbers of calls, and storing those records for some specified period when the vast majority of these calls do not result in consumer complaints. The principal consumer benefit of a recording mandate would be to aid enforcement, but the Commission is confident in light of the success of our prior enforcement actions that we can continue to enforce our rules even without a mandate, and nothing in the record persuades us otherwise. 7. Nonetheless, the Commission encourages carriers and their agents to record sales calls. The Commission clarifies that a consumer's allegation of a sales call misrepresentation shifts the burden of proof to the carrier making the sales call to provide persuasive evidence to rebut the claim. The Commission believes that in those instances in which a consumer has provided credible evidence of a misrepresentation that a carrier is uniquely positioned via its access to sales scripts, recordings, training, and other relevant materials relating to sales calls to proffer evidence to rebut those claims if they are without merit. In most instances, the consumer will not have access to these same materials. An accurate and complete sales call recording may be a carrier's best such evidence, and the record indicates that at least some carriers already record calls for training and monitoring purposes. Those carriers that do not and/or choose not to record sales calls will have to develop other means to rebut credible consumer allegations of misrepresentations on sales calls. Unauthorized Charges on Telephone Bills 8. The Commission codifies a prohibition on the placement of unauthorized charges on telephone bills. Although cramming has been a long-standing issue addressed in various enforcement actions, and the Commission has adopted truth-in-billing rules to help detect it, the Commission has never codified a rule against cramming. The Commission thus codifies in a new Sec. 64.2401(g) of the Commission's truth-in- billing rules the prohibition against cramming that it has long enforced under section 201(b) of the Act. The Commission believes codifying the cramming prohibition for wireline and wireless carriers will act as a deterrent to this conduct. In so doing, the Commission agrees with commenters that codifying a ban against cramming provides greater clarity to interested parties and will aid its enforcement efforts. In addition, codifying this prohibition into its rules will provide consumers with more specific information and notice of this prohibited practice. 9. The Commission agrees with those commenters who contend that wireless consumers should be afforded the same consumer protections as wireline consumers when such unauthorized charges appear on their telephone bills. This approach is also consistent with the Commission's prior enforcement [[Page 33142]] investigations conducted under section 201(b) holding wireless providers accountable for alleged unauthorized charges that appeared on wireless bills. Third-Party Verification 10. Authorizing Individual Services. The Commission eliminates the requirement in Sec. 64.1120(b) of its rules that carriers must obtain the authorization for each individual service sold when the carrier is selling more than one telecommunications service to a subscriber. The Commission agrees with those commenters who suggest there is minimal benefit to asking consumers if they want to separately switch individual services based on regulatory classifications that may be outdated and unfamiliar to them. 11. TPV Abuses. The Commission remains concerned that the TPV process has been misused in some instances to fraudulently verify consumer authorization to switch providers. Its prior enforcement actions confirm instances of abuse of the TPV process. Although the current record does not contain a sufficient basis to eliminate this widely-used verification mechanism, the Commission believes that these documented abuses warrant additional oversight. As a result, the Commission concludes that any carrier that becomes the subject of a Commission forfeiture order through abuse of that process will be suspended for a period of five years from using the TPV process to confirm consumer switches. That will necessitate that these carriers use other recognized sources of evidence under our rules, such as a letter of agency, to confirm a consumer switch during the pendency of that suspension. The Commission notes that this suspension process will be applied only going forward from the effective date of the rules adopted in document FC 18-78. Thus, carriers and verifiers will be afforded an opportunity to take proactive measures to correct any deficiencies that have resulted in prior enforcement actions. In addition to strengthening its requirements in this action, the Commission reminds carriers that it takes violations of its rules seriously and the Commission will continue to use its enforcement authority to stop bad actors, including through substantial monetary penalties and revocation of Commission operating authorization. Other Measures 12. In light of the enhanced consumer protections afforded by the rules adopted in document FCC 18-78, the apparent diminishing nature of the slamming and cramming problem as evidenced by recent complaint data, and the potential costs of compliance with additional requirements, the Commission declines to mandate any other changes to its rules. Final Regulatory Flexibility Analysis 13. As required by the Regulatory Flexibility Act of 1980, as amended (RFA) an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Slamming and Cramming NPRM. The Commission sought written public comment on the proposals in the Slamming and Cramming NPRM, including comments on the IFRA. This present Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA. Need For, and Objectives of, the Proposed Rules 14. This document FCC 18-78 adopts rules to strengthen consumer protections from slamming and cramming. Slamming is the unauthorized change of a consumer's preferred interexchange telecommunications service provider, and cramming is the placement of unauthorized charges on a consumer's telephone bill. Despite existing slamming and truth-in- billing rules, recent enforcement actions indicate that the most vulnerable consumers, including the elderly and non-English speakers, remain at significant risk of being the victims of these fraudulent practices because unscrupulous carriers often make it difficult to detect such conduct. Specifically, the Commission adopts rules designed to provide greater clarity of these existing prohibitions and assist in our enforcement actions where such conduct occurs. 15. Section 258 of the Act makes it unlawful for any telecommunication carrier to ``submit or execute a change in accordance with such verification procedures as the Commission shall prescribe.'' The rules adopted in document FCC 18-78 will strengthen the Commission's ability to deter slamming by addressing misleading statements made in sales calls which the record confirms are a substantial factor in slamming. For example, when a consumer's decision to switch carriers is made based on false information provided in a sales call, that consumer's authorization to switch carrier will no longer be considered binding. In addition, the Commission streamlines the carrier change process by eliminating the requirement that the consumer's authorization be obtained for every service to be switched when selling more than one telecommunications service. This will improve the efficiency for both carriers and consumers when making carrier change requests by eliminating unnecessary regulatory impediments. Finally, any telecommunications carrier that is the subject of a Commission forfeiture action will be suspended for a period of five years from using that process to confirm a consumer switch. This will ensure that greater care is taken by both carriers and verifiers to avoid TPV abuses. 16. The Commission has found on numerous instances that cramming is an ``unjust and unreasonable'' practice in violation of section 201(b) of the Act but has never codified a prohibition against cramming in our rules. Doing so in document FCC 18-78 provides greater clarity of this long-recognized prohibition to interested parties and will assist in our enforcement efforts of this prohibited practice. Summary of Significant Issues Raised by Public Comments in Response to the IRFA 17. One comment was filed that specifically addressed the proposed rules and policies presented in the IRFA. Although supporting the adoption of the two proposed rules contained in the Slamming and Cramming NPRM, NTCA argues that the IRFA was deficient because the other measures discussed therein were vague and lacked specificity. Response to Comments by Chief Counsel for Advocacy of Small Business Administration 18. Pursuant to the Small Business Jobs Act of 2010, which amended the RFA, the Commission is required to respond to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration, and to provide a detailed statement of any change made to the proposed rules as a result of those comments. 19. The Chief Counsel did not file any comments in response to the proposed rules in this proceeding. Small Entities Impacted 20. The rules adopted in document FCC 18-78 will affect obligations of Wireline and Wireless telecommunications carriers. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements 21. In document FCC 18-78, the Commission adopt rules to enhance the existing consumer protections from slamming and cramming. Specifically, the Commission adopts rules to codify a ban on: (i) Material misrepresentations [[Page 33143]] on sales calls for voice services; and (ii) unauthorized charges on telephone bills. Although the Commission has previously held that these practices are unjust and unreasonable practices under section 201(b) of the Act, its rules have not expressly prohibited them. Because these prohibitions have been long recognized pursuant to our enforcement actions, however, they should not necessitate any new burdens for those carriers are that in compliance. In addition, the Commission takes steps to improve the effectiveness of the existing carrier change process by eliminating the requirement that carriers obtain the authorization to switch each individual service when selling more than one service and by suspending any carrier for a five-year period from using the TPV process when it becomes the subject of a Commission forfeiture action. Steps Taken To Minimize Significant Impact on Small Entities, and Significant Alternatives Considered 22. The RFA requires an agency to describe any significant, specifically small business alternatives that it has considered in developing its approach, which may include the following four alternatives (among others): ``(1) the establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.'' 23. The rules adopted in document FCC 18-78 codify long-recognized consumer protections from slamming and cramming. In prior enforcement actions, the Commission has previously held that these practices are unjust and unreasonable practices under section 201(b) of the Act. As a result, the economic impact on affected carriers should be minimal because they impose no new requirements. In declining to adopt other measures discussed in the Slamming and Cramming NPRM, the Commission has taken into consideration the potential burdens on carriers, including smaller carriers, in determining that such actions are not justified at this time. In these instances, the Commission has taken into consideration the concerns of industry commenters that the potential costs and delays that may result from these measures outweigh the potential benefits to consumers. Ordering Clauses Pursuant to sections 1-4, 201(b), and 258 of the Communications Act of 1934, as amended, 47 U.S.C. 151-154, 201, 258, document FCC 18-78 is adopted, and part 64 of the Commission's rules, 47 CFR 64.1120 and 64.2401 are amended. The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of document FCC 18-78 to Congress and the Government Accountability Office pursuant to the Congressional Review Act. The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of document FCC 18-78, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration. List of Subjects in 47 CFR Part 64 Communications common carriers, Telecommunications. Federal Communications Commission. Marlene Dortch, Secretary, Office of the Secretary. Final Rules For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 64 as follows: PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS 0 1. The authority citation for part 64 is revised to read as follows: Authority: 47 U.S.C. 154, 201, 202, 218, 222, 225, 226, 227, 228, 251(e), 254(k), 403(b)(2)(B), (c), 616, 620, 1401-1473, unless otherwise noted. 0 2. Amend Sec. 64.1120 by revising paragraphs (a)(1)(i) and (b) to read as follows: Sec. 64.1120 Verification of orders for telecommunications services. (a) * * * (1) * * * (i) Authorization from the subscriber, subject to the following: (A) Material misrepresentation on the sales call is prohibited. Upon a consumer's credible allegation of a sales call misrepresentation, the burden of proof shifts to the carrier making the sales call to provide persuasive evidence to rebut the claim. Upon a finding that such a material misrepresentation has occurred on a sales call, the subscriber's authorization to switch carriers will be deemed invalid. (B) [Reserved] * * * * * (b) Any telecommunications carrier that becomes the subject of a Commission forfeiture action through a violation of the third-party verification process set forth in paragraph (c)(3) of this section will be suspended for a five-year period from utilizing the third-party verification process to confirm a carrier change. * * * * * 0 3. Amend Sec. 64.2401 by adding paragraph (g) to read as follows: Sec. 64.2401 Truth-in-Billing Requirements. * * * * * (g) Prohibition against unauthorized charges. Carriers shall not place or cause to be placed on any telephone bill charges that have not been authorized by the subscriber. [FR Doc. 2018-14151 Filed 7-16-18; 8:45 am] BILLING CODE 6712-01-P
![33140 Federal Register / Vol. 83, No. 137 / Tuesday, July 17, 2018 / Rules and Regulations
Federal-State Joint Board on Universal must comply with the Commission’s SUMMARY: In this document, the
Service; Lifeline and Link-Up; Universal existing high-cost reporting and Commission takes measures to
Service Reform—Mobility Fund, WC oversight mechanisms, with certain strengthen our rules to protect
Docket Nos. 10–90, 07–135, 05–337, 03– exceptions and modifications. consumers from slamming and
109; GN Docket No. 09–51; CC Docket On July 7, 2017, the Commission cramming by codifying rules against
Nos. 01–92, 96–45; WT Docket No. 10– adopted the ETC Reporting Streamlining sales call misrepresentations and
208, Order and Further Notice of Order. See Connect America Fund; ETC cramming and revising rules to improve
Proposed Rulemaking, 26 FCC Rcd Annual Reports and Certifications, WC the effectiveness of the third-party
17663 (2011) (USF/ICC Transformation Docket Nos. 10–90, 14–58, Report and verification (TPV) process. Slamming is
Order), and the Commission and Order, 32 FCC Rcd 5944 (2017) (ETC an unauthorized change in a consumers’
Wireline Competition Bureau have since Reporting Streamlining Order). In that telephone provider and cramming is the
adopted a number of orders that order, the Commission streamlined the placement of an unauthorized charge on
implement the USF/ICC Transformation annual reporting requirements for ETCs the consumers’ telephone bill.
Order; see also Connect America Fund by eliminating rules duplicative of other DATES: Effective August 16, 2018.
et al., WC Docket No. 10–90 et al., Third reporting requirements or that are no FOR FURTHER INFORMATION CONTACT:
Order on Reconsideration, 27 FCC Rcd longer necessary. Richard D. Smith, Consumer and
5622 (2012); Connect America Fund et Further, since the previous filing Governmental Affairs Bureau (717) 338–
al., WC Docket No. 10–90 et al., Order, deadline associated with this collection, 2797, email Richard.Smith@fcc.gov.
27 FCC Rcd 605 (Wireline Comp. Bur. changing circumstances have made SUPPLEMENTARY INFORMATION: This is a
2012); Connect America Fund et al., WC filing certain information no longer summary of the Commission’s Report
Docket No. 10–90 et al., Fifth Order on necessary or required under the rules. and Order, document FCC 18–78,
Reconsideration, 27 FCC Rcd 14549 For instance, the final Connect America adopted on June 7, 2018, and released
(2012); Connect America Fund et al., Phase I incremental support deployment on June 8, 2018, in CG Docket No. 17–
WC Docket No. 10–90 et al., Order, 28 deadlines were in early 2017, so there 169. The full text of document FCC 18–
FCC Rcd 2051 (Wireline Comp. Bur. are no longer any reporting obligations 78 will be available for public
2013); Connect America Fund et al., WC associated with that support. inspection and copying via the
Docket No. 10–90 et al., Order, 28 FCC Moreover, because the Connect Commission’s Electronic Comment
Rcd 7227 (Wireline Comp. Bur. 2013); America Phase II challenge process has Filing System (ECFS), and during
Connect America Fund, WC Docket No. ended, the Commission removed Form regular business hours at the FCC
10–90, Report and Order, 28 FCC Rcd 505 from this collection. The Reference Information Center, Portals II,
7766 (Wireline Comp. Bur. 2013); Commission also moved FCC Form 507, 445 12th Street SW, Room CY–A257,
Connect America Fund, WC Docket No. FCC Form 508, FCC Form 509 and the Washington, DC 20554. To request
10–90, Report and Order, 28 FCC Rcd accompanying instructions to materials in accessible formats for
7211 (Wireline Comp. Bur. 2013); information collection 3060–0233. people with disabilities (Braille, large
Connect America Fund, WC Docket No. The Commission therefore revises this print, electronic files, audio format),
10–90, Report and Order, 28 FCC Rcd information collection, as well as Form send an email to fcc504@fcc.gov or call
10488 (Wireline Comp. Bur. 2013); 481 and its accompanying instructions, the Consumer and Governmental Affairs
Connect America Fund et al., WC to reflect these new or modified Bureau at (202) 418–0530 (voice), (844)
Docket No. 10–90 et al., Report and requirements. The Commission also 432–2272 (videophone), or (202) 418–
Order, Order and Order on implemented a number of non- 0432 (TTY).
Reconsideration and Further Notice of substantive changes to the Form 481
Proposed Rulemaking, 31 FCC Rcd 3087 and accompanying instructions. Any Congressional Review Act
(2016). The Commission has received increased burdens for particular The Commission will send a copy of
OMB approval for most of the reporting requirements are associated document FCC 18–78 to Congress and
information collections required by with ETCs newly subject to those the Government Accountability Office
these orders. At a later date, the requirements as a condition of receiving pursuant to the Congressional Review
Commission plans to submit additional high-cost support. Act, see 5 U.S.C. 801(a)(1)(A).
revisions for OMB review to address Federal Communications Commission.
other reforms adopted in the orders Final Paperwork Reduction Act of 1995
Marlene Dortch, Analysis
(e.g., 47 CFR 54.313(a)(6)).
Secretary, Office of the Secretary.
More recently, on August 23, 2016, The Report and Order does not
[FR Doc. 2018–15171 Filed 7–16–18; 8:45 am] contain any new or modified
the Commission adopted the Alaska
Plan Order. See Connect America Fund
BILLING CODE 6712–01–P information collection requirements
et al., WC Docket Nos. 10–90, 16–271; subject to the Paperwork Reduction Act
WT Docket No. 10–208, Report and of 1995, Public Law 104–13. In addition,
FEDERAL COMMUNICATIONS therefore, it does not contain any new
Order and Further Notice of Proposed COMMISSION
Rulemaking, 31 FCC Rcd 10139 (2016) or modified information collection
(Alaska Plan Order). In that order, the 47 CFR Part 64 burden for small business concerns with
Commission adopted a plan for fewer than 25 employees, pursuant to
providing Alaskan rate-of-return carriers [CG Docket No. 17–169; FCC 18–78] the Small Business Paperwork Relief
and competitive eligible Act of 2002, Public Law 107–198, see 44
telecommunications carriers (ETCs) the Protecting Consumers From U.S.C. 3506(c)(4).
daltland on DSKBBV9HB2PROD with RULES
option to obtain a fixed level of funding Unauthorized Carrier Changes and
Synopsis
for a defined term in exchange for Related Unauthorized Charges
committing to deployment obligations Misrepresentations on Sales Calls
AGENCY: Federal Communications
that are tailored to each Alaskan Commission. 1. The Commission’s recent
carrier’s circumstances. ETCs receiving enforcement actions reveal that
ACTION: Final rule.
support pursuant to the Alaska Plan misrepresentations on sales calls are a
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continuing source of slamming. The can occur and may not rise to a level without a mandate, and nothing in the
Commission therefore codifies a rule to warranting enforcement action, record persuades us otherwise.
prohibit material misrepresentation, consistent with how the Commission 7. Nonetheless, the Commission
including material omissions, in sales has exercised its enforcement discretion encourages carriers and their agents to
calls to further reduce the incidence of in the past. The Commission declines, record sales calls. The Commission
slamming. A codified rule is consistent however, to require that such clarifies that a consumer’s allegation of
with the Commission’s statutory misrepresentations also be a sales call misrepresentation shifts the
authority and prior enforcement actions. ‘‘intentional.’’ The Commission has burden of proof to the carrier making
In addition, codifying this prohibition never articulated an intentionality the sales call to provide persuasive
in our rules will provide carriers and standard when it has penalized carriers evidence to rebut the claim. The
consumers with more specific for misrepresentations on sales calls in Commission believes that in those
information and notice of this the past. Rather, the Commission’s instances in which a consumer has
prohibited practice. In so doing, the forfeiture policies already require that, provided credible evidence of a
Commission notes that it revised the when determining the appropriate misrepresentation that a carrier is
Slamming and Cramming NPRM’s adjustment to a base forfeiture amount uniquely positioned via its access to
proposed rule, published at 82 FR (rather than whether the act is a sales scripts, recordings, training, and
37830, August 14, 2017, on sales calls violation), the Commission considers other relevant materials relating to sales
by deleting the reference to ‘‘egregious conduct’’ and ‘‘intentional calls to proffer evidence to rebut those
‘‘deception.’’ The Commission finds that violation’’ consistent with section 503 of claims if they are without merit. In most
this term is vague and subject to an the Act. The Commission believes this instances, the consumer will not have
unclear interpretation absent a record to allows sufficient flexibility to take access to these same materials. An
define it. ‘‘intent’’ into consideration as an accurate and complete sales call
2. Upon a finding of material aggravating or mitigating factor when a recording may be a carrier’s best such
misrepresentation in the sales call, the violation of this rule occurs. evidence, and the record indicates that
consumer’s authorization to change 5. Defining ‘‘Sales Call.’’ The at least some carriers already record
carriers will be deemed invalid even if Commission’s slamming rules are calls for training and monitoring
the carrier has some evidence of designed to prevent a provider from purposes. Those carriers that do not
consumer authorization of a switch. In switching a consumer’s preferred carrier and/or choose not to record sales calls
this regard, our enforcement cases make will have to develop other means to
without the consumer’s permission.
clear that sales misrepresentations may rebut credible consumer allegations of
Section 258 of the Act makes it
not be cured by a facially valid TPV. misrepresentations on sales calls.
unlawful for any telecommunications
When a consumer’s decision to switch
carrier to ‘‘submit or execute a change Unauthorized Charges on Telephone
carriers is predicated on false
in a subscriber’s selection of a provider Bills
information provided in a sales call, that
of telephone exchange service or 8. The Commission codifies a
consumer’s authorization to switch
telephone toll service except in prohibition on the placement of
carriers can no longer be considered
accordance with such verification unauthorized charges on telephone
binding.
3. A codified rule is consistent with procedures as the Commission shall bills. Although cramming has been a
the Commission’s statutory authority prescribe.’’ Thus, for purposes of the long-standing issue addressed in various
and prior enforcement actions. Section slamming rules, the Commission enforcement actions, and the
201(b) of the Act states, in pertinent clarifies that a ‘‘sales call’’ is any Commission has adopted truth-in-
part, that ‘‘[a]ll charges, practices, telephone call in which a carrier billing rules to help detect it, the
classifications, and regulations for and encourages a subscriber to submit or Commission has never codified a rule
in connection with [interstate or foreign] execute a change in the subscriber’s against cramming. The Commission
communication service [by wire or provider of telephone exchange service thus codifies in a new § 64.2401(g) of
radio], shall be just and reasonable, and or telephone toll service. the Commission’s truth-in-billing rules
any such charge, practice, classification, 6. Recording Sales Calls. The the prohibition against cramming that it
or regulation that is unjust or Commission declines to mandate that has long enforced under section 201(b)
unreasonable is declared to be sales calls be recorded. Although the of the Act. The Commission believes
unlawful.’’ The Commission has found Commission agrees with commenters codifying the cramming prohibition for
that misrepresentations made by that recordings would aid in wireline and wireless carriers will act as
interstate common carriers constitute determining whether a a deterrent to this conduct. In so doing,
unjust and unreasonable practices under misrepresentation occurred, the record the Commission agrees with
section 201(b) of the Act. Sales calls that contains unrebutted evidence that any commenters that codifying a ban against
contain misrepresentations undermine such mandate would necessitate cramming provides greater clarity to
the effectiveness of the carrier’s industry-wide installation of recording interested parties and will aid its
validation procedures under Section technologies, amending existing enforcement efforts. In addition,
258 of the Act, and thus are an unjust protocols with vendors that make such codifying this prohibition into its rules
and unreasonable practice that is ‘‘in calls on carriers’ behalf, recording large will provide consumers with more
connection with’’ the communication numbers of calls, and storing those specific information and notice of this
service that is the subject of the records for some specified period when prohibited practice.
verification process. the vast majority of these calls do not 9. The Commission agrees with those
4. Material Violations. The result in consumer complaints. The commenters who contend that wireless
daltland on DSKBBV9HB2PROD with RULES
Commission bans only ‘‘material’’ principal consumer benefit of a consumers should be afforded the same
misrepresentations on sales calls. In so recording mandate would be to aid consumer protections as wireline
doing, the Commission acknowledges enforcement, but the Commission is consumers when such unauthorized
that occasional minor or trivial confident in light of the success of our charges appear on their telephone bills.
inaccuracies that have no bearing on the prior enforcement actions that we can This approach is also consistent with
consumer’s decision to switch carriers continue to enforce our rules even the Commission’s prior enforcement
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on sales calls for voice services; and (ii) Ordering Clauses (b) Any telecommunications carrier
unauthorized charges on telephone Pursuant to sections 1–4, 201(b), and that becomes the subject of a
bills. Although the Commission has 258 of the Communications Act of 1934, Commission forfeiture action through a
previously held that these practices are as amended, 47 U.S.C. 151–154, 201, violation of the third-party verification
unjust and unreasonable practices under 258, document FCC 18–78 is adopted, process set forth in paragraph (c)(3) of
section 201(b) of the Act, its rules have and part 64 of the Commission’s rules, this section will be suspended for a five-
not expressly prohibited them. Because 47 CFR 64.1120 and 64.2401 are year period from utilizing the third-
these prohibitions have been long amended. party verification process to confirm a
recognized pursuant to our enforcement The Commission’s Consumer and carrier change.
actions, however, they should not Governmental Affairs Bureau, Reference * * * * *
necessitate any new burdens for those Information Center, shall send a copy of ■ 3. Amend § 64.2401 by adding
carriers are that in compliance. In document FCC 18–78 to Congress and paragraph (g) to read as follows:
addition, the Commission takes steps to the Government Accountability Office
improve the effectiveness of the existing pursuant to the Congressional Review § 64.2401 Truth-in-Billing Requirements.
carrier change process by eliminating Act. * * * * *
the requirement that carriers obtain the The Commission’s Consumer and (g) Prohibition against unauthorized
authorization to switch each individual Governmental Affairs Bureau, Reference charges. Carriers shall not place or
service when selling more than one Information Center, shall send a copy of cause to be placed on any telephone bill
service and by suspending any carrier document FCC 18–78, including the charges that have not been authorized
for a five-year period from using the Final Regulatory Flexibility Analysis, to by the subscriber.
TPV process when it becomes the the Chief Counsel for Advocacy of the [FR Doc. 2018–14151 Filed 7–16–18; 8:45 am]
subject of a Commission forfeiture Small Business Administration.
BILLING CODE 6712–01–P
action.
List of Subjects in 47 CFR Part 64
Steps Taken To Minimize Significant
Communications common carriers,
Impact on Small Entities, and FEDERAL COMMUNICATIONS
Telecommunications.
Significant Alternatives Considered COMMISSION
Federal Communications Commission.
22. The RFA requires an agency to
Marlene Dortch, 47 CFR Part 64
describe any significant, specifically
small business alternatives that it has Secretary, Office of the Secretary. [WC Docket No. 17–141; CC Docket No.
considered in developing its approach, Final Rules 96–128; WC Docket No. 16–132; FCC 18–
which may include the following four 21]
For the reasons discussed in the
alternatives (among others): ‘‘(1) the
preamble, the Federal Communications Modernization of Payphone
establishment of differing compliance or
Commission amends 47 CFR part 64 as Compensation Rules; Implementation
reporting requirements or timetables
follows: of the Pay Telephone Reclassification
that take into account the resources
available to small entities; (2) the and Compensation Provisions of the
PART 64—MISCELLANEOUS RULES Telecommunications Act of 1996; 2016
clarification, consolidation, or RELATING TO COMMON CARRIERS
simplification of compliance or Biennial Review of
reporting requirements under the rule ■ 1. The authority citation for part 64 is Telecommunications Regulations
for small entities; (3) the use of revised to read as follows: AGENCY: Federal Communications
performance, rather than design, Authority: 47 U.S.C. 154, 201, 202, 218, Commission.
standards; and (4) an exemption from 222, 225, 226, 227, 228, 251(e), 254(k), ACTION: Final rule; announcement of
coverage of the rule, or any part thereof, 403(b)(2)(B), (c), 616, 620, 1401–1473, unless effective date.
for small entities.’’ otherwise noted.
23. The rules adopted in document ■ 2. Amend § 64.1120 by revising SUMMARY: In this document, the
FCC 18–78 codify long-recognized paragraphs (a)(1)(i) and (b) to read as Commission announces that the Office
consumer protections from slamming of Management and Budget (OMB) has
follows:
and cramming. In prior enforcement approved, for a period of three years, the
actions, the Commission has previously § 64.1120 Verification of orders for information collection associated with
held that these practices are unjust and telecommunications services. the Commission’s payphone
unreasonable practices under section (a) * * * compensation rules. This document is
201(b) of the Act. As a result, the (1) * * * consistent with the Modernization of
economic impact on affected carriers (i) Authorization from the subscriber, Payphone Compensation Rules Report
should be minimal because they impose subject to the following: and Order, FCC 18–21, which stated
no new requirements. In declining to (A) Material misrepresentation on the
that the Commission would publish a
adopt other measures discussed in the sales call is prohibited. Upon a
document in the Federal Register
Slamming and Cramming NPRM, the consumer’s credible allegation of a sales
announcing the effective date of those
Commission has taken into call misrepresentation, the burden of
rules.
consideration the potential burdens on proof shifts to the carrier making the
carriers, including smaller carriers, in sales call to provide persuasive DATES: The amendment to 47 CFR
determining that such actions are not evidence to rebut the claim. Upon a 64.1310(a)(3) published at 83 FR 11422,
justified at this time. In these instances, finding that such a material March 15, 2018, is effective on July 17,
daltland on DSKBBV9HB2PROD with RULES
the Commission has taken into misrepresentation has occurred on a 2018.
consideration the concerns of industry sales call, the subscriber’s authorization FOR FURTHER INFORMATION CONTACT:
commenters that the potential costs and to switch carriers will be deemed Michele Levy Berlove, Attorney
delays that may result from these invalid. Advisor, Wireline Competition Bureau,
measures outweigh the potential (B) [Reserved] at (202) 418–1477, or by email at
benefits to consumers. * * * * * Michele.Berlove@fcc.gov. For additional
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Document Created: 2018-07-17 01:39:35
Document Modified: 2018-07-17 01:39:35
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule. | |
| Dates | Effective August 16, 2018. | |
| Contact | Richard D. Smith, Consumer and Governmental Affairs Bureau (717) 338-2797, email [email protected] | |
| FR Citation | 83 FR 33140 | |
| CFR Associated | Communications Common Carriers and Telecommunications |
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