Consumer News Release
For immediate release -- Wednesday, March 3, 1999.
Contact Bob Brammer -- 515-281-6699
Miller Files Long Distance "Slamming" Suit
Long distance "slamming" is top consumer protection complaint in Iowa. Lawsuit names company doing business as "Basic Long Distance."
DES MOINES-- Attorney General Tom Miller filed a consumer fraud lawsuit today alleging that a Michigan company illegally "slammed" the long distance service of scores of Iowa consumers.
"Slamming" is the fraudulent practice of switching people's long distance carrier without their authorization or approval -- usually without the victim's knowledge and often at much higher rates than their preferred long distance carrier.
"Slamming is Iowa's number-one consumer complaint," Miller said. It is the top complaint for most states and federal consumer protection enforcement agencies, he said.
The company named defendant in the suit is Utility Analysts, Inc., doing business as "Basic Long Distance," of 26020 Grand River, Redford, Michigan 48240. The suit also names Brian Somerville, founder and director of the company, also of Redford, Michigan.
"Basic Long Distance telephoned Iowa customers and used various deceptive representations and devices to 'slam' people's long distance service," Miller said.
He said the telemarketing calls typically contained three deceptive elements:
The telemarketers said they were contacting consumers on behalf of AT&T, US West, GTE, or other reputable local or long distance companies, which was not true.
The callers used various misrepresentations -- that they were calling for authorization to bill local and long distance on the same bill, that they were checking on customer satisfaction with service, that they were verifying customer information, and so on.
Consumers then received a second "verification" call with similar misrepresentations -- a call the company later claimed verified the consumers' desire to switch their service to Basic Long Distance.
"Consumers then received invoices from Basic Long Distance, but they often didn't notice right away that they had been slammed," Miller said.
"When they did notice and tried to dispute the bill, consumers often had to contact several different telephone service providers or billing services in order to get to Basic Long Distance," he said. "We allege this required them to spend countless hours analyzing their phone bills, making phone calls, and sending faxes, often at their own or their business's expense."
The lawsuit asks the court to order Basic Long Distance to stop doing business in Iowa, to reimburse all Iowa consumers who suffered monetary damages, to disgorge other moneys acquired unlawfully, and to pay civil penalties up to $40,000 per violation.
Slamming: Top Consumer Problem
Miller said "slamming" ranks as the top consumer complaint in Iowa. He said the Consumer Protection Division logged about 1300 telephone service complaints last year, the majority being slamming complaints.
He advised consumers to examine their phone bill every month to be sure their long distance service has not been changed without their approval. Consumers also should watch for "cramming" -- unauthorized charges put on their bill even if the long distance service remained the same.
Customers also may contact their local phone company and ask it to "freeze" their long distance service so it cannot be changed without specific authorization.
Miller advised consumers to be wary of telemarketing calls asking about telephone service or billing, or asking for personal information, such as your birth date. "Slammers will try to trick you into saying something they claim authorizes a change, or they may slam you with no authorization at all," he said.
Miller said his office is pushing legislation at both the state and federal levels aimed at making it much more difficult for slammers to operate and easier for regulators to punish them. He also said new Federal Communication Commission rules backed by the States that strengthen protection for consumers will take effect in April.
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