Federal Communications Commission DA 19-464 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of Peak Communications, Inc. Complaints Regarding Unauthorized Change of Subscriber’s Telecommunications Carrier ) ) ) ) ) ) ) Complaint Nos. 1548718 1852336 ORDER Adopted: May 24, 2019 Released: May 24, 2019 By the Deputy Chief, Consumer Policy Division, Consumer and Governmental Affairs Bureau: 1. In this Order, we consider two complaints See Appendix. alleging that Peak Communications, Inc. (Peak) changed Complainants’ telecommunications service providers without obtaining authorization and verification from Complainants as required by the Commission’s rules. See 47 CFR §§ 64.1100 – 64.1190. We find that Peak’s actions violated the Commission’s slamming rules, and we therefore grant Complainants’ complaints. 2. Section 258 of the Communications Act of 1934, as amended (the Act), prohibits the practice of “slamming,” the submission or execution of an unauthorized change in a subscriber’s selection of a provider of telephone exchange service or telephone toll service. 47 U.S.C. § 258(a). The Commission’s implementing rules require, among other things, that a carrier receive individual subscriber consent before a carrier change may occur. See 47 CFR § 64.1120. Specifically, a carrier must: (1) obtain the subscriber’s written or electronically signed authorization in a format that satisfies our rules; (2) obtain confirmation from the subscriber via a toll-free number provided exclusively for the purpose of confirming orders electronically; or (3) utilize an appropriately qualified independent third party to verify the order. See id. § 64.1120(c). Section 64.1130 details the requirements for letter of agency form and content for written or electronically signed authorizations. Id. § 64.1130. The Commission also has adopted rules to limit the liability of subscribers when a carrier change occurs, and to require carriers involved in slamming practices to compensate subscribers whose carriers were changed without authorization. These rules require the carrier to absolve the subscriber where the subscriber has not paid his or her bill. If the subscriber has not already paid charges to the unauthorized carrier, the subscriber is absolved of liability for charges imposed by the unauthorized carrier for service provided during the first 30 days after the unauthorized change. See id. §§ 64.1140, 64.1160. Any charges imposed by the unauthorized carrier on the subscriber for service provided after this 30-day period shall be paid by the subscriber to the authorized carrier at the rates the subscriber was paying to the authorized carrier at the time of the unauthorized change. Id. Where the subscriber has paid charges to the unauthorized carrier, the Commission’s rules require that the unauthorized carrier pay 150 percent of those charges to the authorized carrier, and the authorized carrier shall refund or credit to the subscriber 50 percent of all charges paid by the subscriber to the unauthorized carrier. See id. §§ 64.1140, 64.1170. 3. We received Complainants’ complaints alleging that Complainants’ telecommunications service providers had been changed without Complainants’ authorization. Pursuant to our rules, we notified Peak of the complaints. Id. § 1.719 (Commission procedure for informal complaints filed pursuant to section 258 of the Act); id. § 64.1150 (procedures for resolution of unauthorized changes in preferred carrier). Peak responded to the complaints, stating that it obtained authorization from Complainants through third-party verifications (TPVs). See Appendix. 4. In each TPV, Peak’s verifier does not confirm that the person is authorized to make a carrier change. Instead, the verifier asks the person on the call if he/she is “authorized by the telephone account holder to make changes and to incur charges on this telephone account.” An affirmative response to this question does not establish whether the person is authorized to make a carrier change. The Commission has explained that “any description of the carrier change transaction . . . shall not be misleading” and emphasized that third-party verifiers must “convey explicitly that consumers will have authorized a carrier change,” and not, for instance, an upgrade in existing service or bill consolidation. See Implementation of the Subscriber Carrier Selection Changes Provisions of the Telecommunications Act of 1996; Policies and Rules Concerning Unauthorized Changes of Consumers’ Long Distance Carriers, Fourth Report and Order, 23 FCC Rcd 493, 501, para. 19 (2008) (Fourth Report and Order); see also 47 CFR § 64.1120(c)(3)(iii). The Commission also explained that “[t]he record reflects that carriers using ambiguous language to describe the nature of the transaction may lead to consumer confusion concerning the true purpose of the solicitation call.” Fourth Report and Order, 23 FCC Rcd at 501, para. 19. The Commission further stated that “such practices are misleading and unreasonable, and warrant specific treatment in our rules.” Id. We therefore find that Peak’s actions were in violation of our slamming rules, and we discuss Peak’s liability below. If either Complainant is unsatisfied with the resolution of the complaint, the Complainant may file a formal complaint with the Commission pursuant to section 1.721 of the Commission’s rules, 47 CFR § 1.721. Such filing will be deemed to relate back to the filing date of the Complainant’s informal complaint so long as the formal complaint is filed within 45 days from the date this order is mailed or delivered electronically to the Complainant. See id. § 1.719. 5. Peak must remove all charges incurred for service provided to Complainants for the first thirty days after the alleged unauthorized changes in accordance with the Commission’s liability rules. See id. § 64.1160(b). We have determined that Complainants are entitled to absolution for the charges incurred during the first thirty days after the unauthorized change occurred and that neither the Complainants’ authorized carriers nor Peak may pursue any collection against Complainants for those charges. See id. § 64.1160(d). Any charges imposed by Peak on the subscribers for service provided after this 30-day period shall be paid by the subscribers at the rates the subscribers were paying to the authorized carriers at the time of the unauthorized change. See id. §§ 64.1140, 64.1160. 6. Accordingly, IT IS ORDERED that, pursuant to section 258 of the Communications Act of 1934, as amended, 47 U.S.C. § 258, and sections 0.141, 0.361 and 1.719 of the Commission’s rules, 47 CFR §§ 0.141, 0.361, 1.719, the complaints filed against Peak Communications, Inc. ARE GRANTED. 7. IT IS FURTHER ORDERED that, pursuant to section 64.1170(d) of the Commission’s rules, 47 CFR § 64.1170(d), the Complainants are entitled to absolution for the charges incurred during the first thirty days after the unauthorized changes occurred and that Peak Communications, Inc. may not pursue any collection against Complainants for those charges. 8. IT IS FURTHER ORDERED that this Order is effective upon release. FEDERAL COMMUNICATIONS COMMISSION APPENDIX COMPLAINT DATE OF DATE OF NUMBER COMPLAINT RESPONSE 1548718 April 5, 2017 May 11, 2017 1852336 August 15, 2017 September 11, 2017 4