immediate release -- Wednesday, March 3, 1999.
Bob Brammer -- 515-281-6699
Files Long Distance "Slamming" Suit
distance "slamming" is top consumer protection complaint in Iowa. Lawsuit
names company doing business as "Basic Long Distance."
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,"
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.