FCC Plans $2.4 Million Fine against Michigan Phone Company for Cramming, Slamming

FCC Plans $2.4 Million Fine against Michigan Phone Company for Cramming, Slamming
August 4, 2015

The Federal Communications Commission (FCC) has announced a planned $2.4 million fine against Long Distance Consolidated Billing Company. The FCC says that the telephone company, which is based in Waterford, Michigan, allegedly switched consumers' regional toll service providers without their authorization ("slamming"), misrepresented the company's identity during telemarketing calls, and placed unauthorized charges on consumers' telephone bills ("cramming").

"It is unacceptable for any company to pad unauthorized charges on bills or trick consumers into changing their preferred phone company," said Travis LeBlanc, Chief of the FCC's Enforcement Bureau. "The FCC will not tolerate companies that deceive consumers into changing their telephone services or carriers."

The Enforcement Bureau reviewed over 70 complaints against Long Distance Consolidated Billing Company (LDCB) that consumers filed with the Commission, the Better Business Bureau, state regulatory agencies, and directly with LDCB.

According to the Enforcement Bureau, consumers repeatedly complained that LDCB switched their regional toll service providers without their authorization. The Bureau says that, in some cases, consumers stated that LDCB's telemarketer pretended to be employed by the consumer's own telephone carrier. The investigation also showed that LDCB placed charges for its service on consumers' local telephone bills without their authorization.

The FCC has charged LDCB with willfully and repeatedly switching consumers' preferred regional toll carrier without verified authorization, misrepresenting its identity to consumers, and cramming unauthorized charges onto consumers' telephone bills.

FCC rules prohibit a carrier from switching a customer's preferred long distance carrier without obtaining authorization from the customer to make such a change. The Communications Act makes it unlawful for a carrier to misrepresent its identity or the nature of its service to obtain that authorization. The Act also makes it unlawful for a carrier to include unauthorized charges or fees on consumers' telephone bills.

With the action against LDCB, the FCC has now taken more than 30 enforcement actions for cramming or slamming in the past five years. The Commission reports that, collectively, these actions will return more than $250 million to consumers.

For more information about the FCC's rules protecting consumers from unauthorized charges on telephone bills, see the FCC consumer guide to slamming or cramming.