AT&T Violated Slamming Rule with Imprecise Third Party Verification, FCC Says

A complaint filed in August alleged AT&T made the unauthorized change. AT&T said authorization was received and confirmed through third party verification. But the verification didn’t go far enough, the FCC Consumer and Governmental Affairs Bureau said in an order Tuesday (http://fcc.us/KmOsmA). “The verifier does not confirm whether the person is authorized to make a carrier change,” wrote Nancy Stevenson, deputy chief of the Consumer Policy Division, italicizing the word “carrier.” “Instead, the verifier states ‘I need to confirm that you are authorized to make changes to this account.'” That’s not good enough, the order said. “An affirmative response does not establish whether the person was authorized to make the carrier change. A switch from one carrier to another carrier differs from merely being authorized on a telephone account."

The agency has dealt with improper third party authorizations before. In 2008, the commission emphasized that verifiers must explicitly convey that “the consumers will have authorized a carrier change, and not, for instance, an upgrade in existing service,” Stevenson wrote, quoting the 2008 order. AT&T was directed to remove charges for service provided within the first 30 days after the change.

It’s a slap on the wrist, “but several slaps on the wrist can eventually sting a little bit,” said Matt Wood, policy director at Free Press. Without seeing the full script the third party verifier was using, it’s hard to say whether authorization was really given, Wood said. It’s possible that, in context, it made sense, he said, for example with a customer’s being told carrier changes would be made, and then being asked whether that customer was authorized to make changes. “I could give AT&T some benefit of the doubt here,” but “in general, we'd like to see the commission be protective of customers,” Wood said. “Taking a cautious approach -- and one that’s more protective of the customer than the carrier -- certainly seems right to me.”

The FCC is “justified in such a hyper-particular reading,” Wood said, because although it sounds like AT&T’s verifier made a “misstatement” here, some companies are actually out to purposely defraud a customer, particularly in the cramming context where unauthorized charges are added to wireless bills. “It is understandable that the commission hold AT&T to a high standard,” said public interest attorney Andy Schwartzman.

"Historically, the concern has been that if you have third parties that get paid for the number of customers they can flip to the target carrier, those third parties will say whatever it takes to get consumers to agree,” said Harold Feld, senior vice president at Public Knowledge. Carriers have an incentive to “turn a blind eye to the misbehavior of third parties if it gets them more customers -- even for a month or two,” Feld said. That’s why the FCC has been very rigorous about making the phone companies responsible for the conduct of third parties, he said. While requiring such precise language “may seem trivially picky, it flows from an appropriate concern that third parties could easily deceive or confuse consumers if the FCC didn’t keep a sharp eye on these practices,” he said.

In a separate order, the FCC said Verizon and Sprint had adequately resolved complaints filed against them in 2012. After a Verizon customer was switched to AT&T without authorization, Verizon “fully absolved” the customer “of all charges assessed by AT&T,” the order said (http://bit.ly/1grSiGz). A complaint against Sprint was dismissed after the bureau said the customer had been “absolved of all charges assessed” (http://bit.ly/1d2ohOH).

The bureau absolved CenturyLink, Frontier and Americatel of wrongdoing. Their actions did not result in unauthorized changes in the consumer’s telecom service provider, the bureau said. The complaint against Frontier involved “a billing issue and not a switch of presubscribed long distance service,” the bureau said (http://bit.ly/1cLi87L). Similarly, the complaint against Americatel involves dial-around, the bureau said (http://bit.ly/1hYBM16). Dial-around services allow consumers to bypass their primary long-distance carrier and use a different one; that does not violate the carrier change rules, the bureau said.