DOJ Sues Interexchange Carrier for 'Slamming' and 'Cramming'
Central Telecom Long Distance engages in “slamming, cramming, and unclear and insufficiently specific billing practices,” in violation of the Communications Act, alleged a DOJ complaint Monday (docket 23-cv-259) against the interexchange carrier in U.S. District Court for Colorado in Denver.
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The defendant changed subscribers’ choice of telephone service provider without their knowledge or permission, alleged the complaint, noting three instances in which its telemarketers misrepresented Central Telecom’s affiliation with subscribers’ then-current carrier. A third-party verification process failed to confirm that subscribers wanted to change long-distance carriers or understood why they were making such a change, it said.
The complaint also cited 28 instances of “cramming,” in which the company placed unauthorized charges and fees on subscribers’ phone bills. In none of those cases did Central Telecom obtain subscribers’ agreement to buy “bundled long-distance service,” a “casual calling” service through which they could place calls by dialing 10-10 followed by a carrier identification code, directory assistance or calling card, it alleged.
In many of the referenced cases, Central Telecom placed unauthorized charges on the phone bills of subscribers who had instituted a “[Primary Interexchange Carrier] freeze” on their account to block unauthorized carrier changes, even though a PIC freeze prevents a change in a subscriber’s preferred carrier selection without consent, the complaint said. In some cramming instances, the company placed unauthorized charges on subscribers’ bills from their local phone companies; in some cases it also, or instead, “direct-billed customers for unauthorized services," the complaint said.
DOJ noted an instance in which an AT&T subscriber’s PIC freeze blocked the defendant from supplanting AT&T as the subscriber’s preferred carrier. Central Telecom billed the subscriber service fees, both through AT&T and directly, for what it called “bundled long distance service,” said the complaint.
In some cases where subscribers without a PIC freeze agreed to use Central Telecom as their long-distance carrier but then switched to their original one or discontinued service, the defendant placed unauthorized charges on the subscriber’s local phone bills, the complaint alleged. When subscribers contacted their local phone companies to dispute the charges and made it clear they no longer wanted service from Central Telecom, the company “continued to bill such subscribers for unauthorized service directly.” One included charges for “Universal Service Fund, bill statement, carrier cost recovery and network access fees,” the complaint said.
The defendant billed subscribers directly and failed to clearly describe the charges on at least four occasions, the complaint said. In each instance, it assessed a monthly recurring charge for bundled services not described as such on the bills it issued. A line item for long distance or adjusted long distance charges gave no information about time period, numbers called or length of calls.
Central Telecom is in arrears on a forfeiture penalty imposed by the FCC in September 2016 for a notice of apparent liability based on “willful and repeated violation” of the Communications Act for “slamming and cramming, and on willful and repeated violation” of the commission’s truth-in-billing rules, said the complaint. The NAL was sent in May 2014.
The DOJ seeks judgment for monetary forfeiture, interest from the date of judgment, costs incurred by plaintiff and further relief deemed proper by the court.