Welcome to the Department of Justice, Iowa Attorney General Tom Miller

RELEASE: On Receipt, October 23, 1998
CONTACT: Bill Brauch 515-281-8772

Attorney General Tom Miller Announces $1 million
Settlement with Long Distance "Slammer"


Des Moines -- Iowa Attorney General Tom Miller today announced his office has obtained a judgment against a New Jersey company accused of "telephone slamming", switching Iowans' long distance telephone service without the consumers' consent.

Miller said that the $1 million payment by Minimum Rate Pricing of Bloomfield, New Jersey, to the nineteen states that participated in the investigation is believed to be the largest ever won by state attorneys general against a long distance carrier accused of "slamming." The judgment will also result in refunds for Iowans who were victims of the company's practices.

Miller's office alleged that Minimum Rate Pricing violated Iowa's Consumer Fraud Act by misrepresenting that consumers would stay with their current long distance carrier when, in fact, the company would switch them to the company's service. Miller's office also alleged that the company misrepresented that consumers would get the "lowest cost of calling," when, in fact, the company's charges were generally higher. His office also alleged that the company misrepresented that it was merely verifying information when, in fact, it was getting information to switch the consumer's long distance service. His office further alleged that the company slammed some consumers again after they discovered the switch and switched back to their chosen carrier.

"This settlement sends a strong message to long distance telephone slammers," Miller said. "Consumers have a right to choose their long distance telephone service. It is consumer fraud to switch a consumer's long distance service without the consumer's authority."

Consumers who were switched to Minimum Rate Pricing after January 1, 1998, have until January 31, 1999, to file complaints with the Attorney General's office and request that the company recalculate their bills at the lower rate they would have paid their chosen carrier, and refund fees paid to switch service. Consumers should file complaints with the Consumer Protection Division, Hoover Building, 1300 E. Walnut, Des Moines, 50319.

Consumers who had their long distance service switched to Minimum Rate Pricing prior to this year will be receiving a letter from the company telling them of their right to get the same re-rating and switch fee refunds and will not be required to file complaints with the Attorney General. Miller said the company's sales of long distance telephone service to Iowans have been in the hundreds of thousands of dollars annually in recent years.

Miller said his office was aggressively going after long distance slamming, but that consumers had to be on the lookout because slammers have a lot of tricks up their sleeves. "We're working hard on this problem," Miller said. "We've gotten refunds for hundreds of Iowa consumers and we're investigating more companies. We're educating consumers every day to carefully review their telephone bills to make sure they have the carrier they've selected. And we've worked with other state attorneys general in urging Congress and the FCC and to improve the rules to prevent slamming."

Minimum Rate Pricing did not admit liability in agreeing to the entry of the Consent Judgment, which was filed today in Polk County District Court.

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Iowa Attorney General's tips to avoid long distance telephone slamming:
Follow these tips to avoid having your long distance service slammed:

  • carefully review your telephone bill each month to ensure the long distance carrier you've chosen is the same as the one listed on the bill;
  • watch out for tricky long distance carrier names listed on the bill -- consumers might think that a listing of a company name like "Minimum Rate Pricing" is a statement of a pricing plan, rather than the name of the carrier;
  • contact your preferred long distance carrier and ask to reinstate your service if you have been slammed;
  • call or write the slamming company to dispute the charges, and if you receive unsatisfactory results, file a complaint with the Attorney General's Consumer Protection Division (phone 515-281-5926);
  • contact your local phone company and ask them to "freeze" your long distance account to try and prevent your long distance service from being switched without your okay;
  • be careful not to sign up on entry blanks for prize drawings that are really authorization slips to change your long distance service, and carefully read promotional materials that come in the mail -- the "fine print" may authorize a switch in long distance service; and,
  • be extremely cautious when you receive telemarketing solicitations asking you to switch long distance companies -- if you don't want to switch, make that very clear and ask them not to call you again.