[Congressional Record Volume 143, Number 160 (Thursday, November 13, 1997)]
[Extensions of Remarks]
[Pages E2362-E2363]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      THE SLAMMING PREVENTION AND CONSUMER PROTECTION ACT OF 1997

                                 ______
                                 

                          HON. JOHN D. DINGELL

                              of michigan

                    in the house of representatives

                      Thursday, November 13, 1997

  Mr. DINGELL. Mr. Speaker, I rise today to introduce H.R. 3050, the 
Slamming Prevention and Consumer Protection Act of 1997 to protect the 
American public from an unfair, unscrupulous and anticonsumer practice 
known as slamming. The perpetrators of this type of rascality switch a 
consumer's choice of long distance or local telephone service providers 
to their own service without the consumer's knowledge or consent. With 
this legislation, consumers finally will be able to fight back against 
slammers.
  The measure will allow consumers to receive a full refund for any 
charges or shield them from liabilities incurred as a result of 
slamming. Consumers will be able to recover up to three times their 
actual damages for intentional violations, in addition to the monetary 
penalties this bill imposes upon any person or telephone carrier and 
their agents who slam. Additionally, the legislation sets a deadline 
for the Federal Communications Commission [FCC] and the Federal Trade 
Commission [FTC] to set rules that will protect consumers from 
slamming. The FCC rules will ensure that any consumer switch of carrier 
is verified, while the FTC rules will prohibit unfair and deceptive 
acts and practices used in connection with switching a consumer's 
choice of service.
  Slamming is a spreading epidemic. It is the single largest source of 
consumer complaints at the FCC. In 1995 alone, slamming represented 
more than a third of the complaints consumers registered at the FCC's 
Common Carrier Bureau. The number of slamming complaints processed by 
the FCC has nearly doubled from 1995 to 1997. Moreover, the number of 
slamming complaints processed by the FCC to date in this calendar year, 
16,440, represent nearly half of all the complaints, 34,557, that have 
been processed by the agency this year.
  The telephone industry estimates that approximately 2 million 
slamming incidents occur each year in the United States, with the bulk 
of these slams undetected or unreported by consumers. And there is no 
doubt these numbers will continue to grow unless adequate protections 
are put in place.
  The current regulations against slamming are simply inadequate. There 
is little incentive for consumers to bring a lawsuit or file a 
complaint with the FCC. The higher phone bills borne by slammed 
consumers often pales in comparison to the cost of suing for recovery. 
This bill will correct that anomaly.
  Moreover, under the current rules, if a consumer files a complaint 
with the FCC, he or she is only entitled to receive the difference 
between what was paid to the slammer and what would have been paid to 
the authorized carrier. In other words, lengthy involvement in an 
administrative proceeding yields too little, too late.
  The FCC has been ineffective in protecting consumers from slammers. 
It has been nearly 2 years since the passage of the Telecommunications 
Act of 1996, and the agency still has not promulgated effective rules 
to protect consumers.
  Despite the growing problem, the FCC has settled disputes with only a 
handful of slammers resulting in injunctions and fines. While these 
fines were paid into the U.S. Treasury, the consumer who was defrauded 
never received a dime.
  The people in my home State of Michigan are particularly hard hit by 
slammers. Michigan ranks eighth overall in the number of State and 
Federal slamming complaints. But slamming respects no State lines.
  Slammers prey upon victims of all kinds, although minorities and non-
English speaking consumers are frequent targets. These slammers act in 
nefarious ways: sign here and you will be eligible for valuable and 
exciting prizes. The only thing valuable and exciting accrues to the 
slammer. The consumer unwittingly authorizes a change in their 
telephone carrier while under the impression that he or she has simply 
entered a contest. Or, the consumer receives a welcome package or other 
promotional mailing at home that says if you do not sign here or return 
the enclosed card, your service will be switched. Or telemarketing 
firms, driven by commissions, forge consumer authorizations or develop 
even wilder schemes to skim cash from the American public.
  Mr. Speaker, we need tougher laws against slamming. The American 
public should have the tools to fight back against these bad actors. 
The Slamming Prevention and Consumer Protection Act of 1997 will 
provide those tools.

[[Page E2363]]



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