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PHOENIX - Slamming and cramming, deceptive business practices that cause headaches for consumers, is about to get harder to perpetrate in Arizona. Consumers are poised to gain important new rights governing how telephone companies make changes to their accounts. Slamming is the unauthorized switching of telecommunications carriers. Cramming is the addition of services that are not requested or authorized by the customer.
The Commissioners last week finalized a rules package that imposes stiff penalties on any company caught slamming or cramming a customer. The rules package is being forwarded to the Secretary of State's office to begin the formal rulemaking process. After a few remaining procedural steps and a final hearing at the Arizona Corporation Commission, the rules should go into effect late this year or early in 2003.
The proposed rules incorporate the following key provisions:
- Explicit consumer authorization is required before a company can make any changes to a customer's service;
- Consumers are not responsible for unauthorized charges and cannot be disconnected for failure to pay disputed charges;
- Companies have 45 days in which to refund to customers any unauthorized charges;
- Telecommunications companies will be required to publish an annual notice of consumers' rights, similar to what is provided to credit card holders. An amendment sponsored by Chairman Mundell requires notice in English and Spanish. The notice will also advise customers to report slamming and cramming to the Arizona Corporation Commission;
- The Commission will assist in investigating and resolving slamming and cramming complaints through an informal complaint process and if the resolution is unsatisfactory to the customer, he or she can file a formal complaint;
- Changes in provider would require one or more of the following: 1) Written authorization from the customer; 2) Voice recording; 3) Electronic authorization with third party verification. Third party verification requires the companies to connect the customer with a completely unrelated or unaffiliated company to verify the customer's request;
- Companies will be required to keep electronic voice recordings, written authorizations or third party verification records for a minimum of 24 months;
- The Commission could, under the proposed rules, assess penalties of up to $7,500 for the first violation and not more than $15,000 for each subsequent violation of the slamming or cramming regulations. An amendment by Commissioner Irvin clarifies that each instance of slamming or cramming constitutes a violation;
- For any telecommunications company that continues to abuse customers, the Commission could revoke their certificate and bar them from doing business in the state.
- Telecommunications companies must file, under seal, a copy of all scripts used by its sales or customer service workers.
The entire slamming and cramming rules package applies to any phone service provider operating in Arizona, including wireless carriers.
The proposed rules are posted on our website (www.cc.state.az.us) under the link marked "Utilities Division." The following link should take you directly to the appropriate page: http://www.cc.state.az.us/utility/telephon/slam-cram.htm. |
