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Michigan Credit Union League Home » CU Community » SAS Credit Unions » Marketing » Newsletter Help » Fraud and Scams  

Additional Newsletter Topics
Lori Z. Bahnmueller
Michigan Credit Union League-YOUR MONEY MATTERS

PLYMOUTH, Mich., June 1, 1999-- My colleague is a Michigan transplant and her family is scattered along the east coast. With her busy schedule and active lifestyle she doesn’t get to visit often and stays in touch primarily by phone. As a result, her phone bills tend to be high. Within months of her arrival, she found herself the victim of slamming by an unfamiliar long-distance carrier. With the quick response and cooperation of her local carrier, and good record keeping on her part, the problem was remedied with few complications. Thanks to free slamming protection and thorough review of her monthly bills, it hasn’t happened again.

This example illustrates how deregulation of the telecommunications industry has been fierce and sometimes illegal, especially for phone customers.

According to Mary Jo Kunkle of the Michigan Public Service Commission (MPSC), the state regulatory agency responsible for overseeing the telecommunications industry, slamming is the practice in which telephone customers are switched to another service provider without their knowledge or permission. Last year, 2800 complaints were filed with the MPSC. Both state and federal mandates have been established to protect customers and punish perpetrators.

A National Consumers League survey revealed that slamming is exceptionally prevalent in Michigan, ranking eighth in unlawful carrier switching. It further disclosed that slammers target persons with sizable incomes and high phone bills.

Customers may be tricked into authorizing a switch by signing their names on contest entries or through a promotional mailing that automatically switches them unless an enclosed card is returned to stop the transaction.

Since telephone slamming is the number one complaint at the Federal Communications Commission (FCC), the agency has recently adopted new rules governing phone service switching. By removing the financial incentive and strengthening the verification procedures of the practice, the burden of proof is placed upon the service provider and not the consumer.

The FCC directive states that if a phone customer is slammed, he or she is automatically excused from paying any slamming costs incurred for the first 30 days after the unauthorized switch. FCC regulations also require that the long-distance carriers confirm switches in writing or through an independent third party vendor. Verbal confirmation through a three-way conference call, where the conversation may be recorded and where competitive pitches from involved parties are forbidden, is another option.

Kunkle said the MPSC also has legal latitude in prosecuting slammers. Legislation signed into law last summer outlines procedures and penalties to help eliminate slamming. The MPSC verification process, in fact, gives the customer an additional opportunity to certify their switch through use of a toll-free electronic authorization.

The MPSC can impose severe financial penalties of up to $20,000 for the first offense and $50,000 for subsequent occurrences. The agency allows for the slammed customer to recover damages as well, added Kunkle.

Another MPSC deterrent is the Primary Interexchange Carrier (PIC) protection program which essentially puts a “freeze” on the customer’s carrier choice, explained Kunkle. If a customer wants to maintain continuous service from a particular long-distance carrier for example, he or she would call the local service carrier to arrange this agreement.

You can avoid getting slammed and the frustration that comes with it by following a few tips. Rick Gambert of the Michigan Consumer Federation recommends that you never sign anything without first reading it thoroughly, that you even exercise caution when filling out a seemingly innocent or legitimate contest entry form. With phone solicitors, he said, you should ask for the information in writing before making a decision, and that if you’re truly not interested, clearly say so. Finally, he advises that you examine your monthly phone bill for unfamiliar names or charges.

Gambert added that if you do get slammed, a good first step is to file a complaint with the MPSC by calling 1-800-292-9555 since the agency can fine the slammer and potentially put the company out of business. Remember, FCC rules remove the customer’s obligation to pay the slammed charges for the first 30 days after the illegal switch occurs. Next, call the company you were switched from and report that you were switched without your permission. You won’t be charged for the reconnection. Ask to be re-enrolled on any calling plans to which you previously belonged.

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