Originally created 04/24/98

Federal action against `slamming' said too little



WASHINGTON -- The number of victims of illegal "slamming" -- the unauthorized changing of a customer's long-distance company -- has exploded over the past five years, showing that federal regulations prohibiting it are all but meaningless, officials said Thursday.

Complaints to the Federal Communications Commission rose from 1,867 in 1993 to more than 20,000 last year. And since most people don't bother to report incidents of slamming, the problem probably is far worse, Sen. Susan Collins, R-Maine, said during a hearing of the Senate Permanent Subcommittee on Investigations.

Victims often end up paying higher, sometimes exorbitant, rates for poorer service provided by unethical telephone companies, said a report released Thursday by the General Accounting Office, Congress' investigative arm.

"Deliberate slamming is like stealing and should not be tolerated," said Collins, subcommittee chairwoman and sponsor of a bill that would make intentional, repeated slamming a criminal offense.

"It's time to quarantine this consumer epidemic," said Sen. Dick Durban, D-Ill., another sponsor.

The FCC is scheduled to adopt tougher anti-slamming rules in a few weeks, and the Senate is expected to debate anti-slamming legislation later this spring. For now, the most effective actions consumers can take is having their long-distance companies "freeze" their accounts, said Eljay Bowron, the GAO's assistant comptroller general for special investigations, told the subcommittee.

"The FCC has adopted some anti-slamming measures, but effectively does little to protect consumers," he said. "Most states have some anti-slamming measures, but their extent varies widely."

Bowron said slamming is less frequent among big telephone companies that have their own equipment and more common among the smaller "switchless resellers," which lease equipment and telephone lines from bigger companies.

Telephone customers sometimes are slammed inadvertently through clerical errors. But unscrupulous companies build up customers by misleading consumers, staging deceptive sweepstakes and sometimes going so far as to falsify authorization documents or simply copy telephone numbers out of phone directories, Bowron said.

He said Daniel H. Fletcher, whose Fletcher Cos. were fined more than $5 million by the FCC on Tuesday, had billed customers at least $20 million and left industry firms with at least $3.8 million in unpaid bills by 1996 after beginning large-scale slamming the year before. Federal investigators suspect that Fletcher may still be running similar scams, but they don't know where he is, Bowron said.

FCC Chairman William Kennard told the panel: "I believe that the reason people slam is because there is a financial incentive to do so, and we need to remove that financial incentive."

Kennard said the FCC is sending out letters to companies that provide billing services to telephone companies to ask for their ideas on making it easier for consumers to find the names of slammers on their telephone bills.

The FCC also is asking the companies to come up with ways to stop "cramming," or billing customers for services they never have ordered, such as call waiting or Internet access service.