The FCC fined GPSPS, an Atlanta-based telephone company, $9.065 million over several violations, including overcharging customers and falsifying evidence submitted to government regulatory officials.
The fine was placed on GPSPS after 150 complaints were sent in to the Enforcement Bureau by consumers. The consumers reported that GPSPS had switched their long distance service provider without informing the customers, an action known as "slamming." GPSPS continued to mistreat its customers by charging them additional fees, an action known as "cramming."
When users attempted to fight these charges and be refunded the amount of the excess charges, GPSPS claimed that someone in the household had authorized these additional charges and the change of service. This is when the customers got the FCC's Enforcement Bureau involved.
GPSPS submitted audio recordings to the Enforcement Bureau and state regulatory authorities as "proof" that the customers had consented to GPSPS's actions, but upon investigation, these recordings were found to have been falsified. In one case, GPSPS told these organizations and a Ms. Duenas that Ms. Duenas's husband had authorized the additional charges, despite the victim's husband having passed away seven years prior. Another victim, Ms. Vega, was told that her father had agreed to the extra charges, even though her father lives on a different continent.
Today, companies cramming and slamming users of their services is an all too common occurrence. The FCC has been forced to take action on more than 30 cases of cramming or slamming in the last five years alone, showing that it is a widely used tactic by telecommunications service providers.
Users who are victims of these malicious actions not only end up paying a greater cost for their service than they agreed to, but they also can experience unavailability of service, or poorer service than they signed up for.
Thanks to the FCC, this isn't a crime that companies can get away with forever. The FCC has announced that over $100 million in penalties have been charged to companies in these 30+ cases, with plans to return more than $250 million to consumers. Although this does raise an even bigger question that needs answered: Is the FCC going far enough with these charges?
If the FCC needs to collectively return $250 million to consumers as a result of these cases as a whole, then why are they only charging these companies $100 million, and where is the extra money being sent to consumers coming from? As it stands, the companies are taking more money from consumers than they are being fined. Not only does this mean that the FCC needs to use funds it receives from other fines or from the federal government to pay back users, it doesn't deter companies from doing the same thing again in the future.
At the end of the day, the companies still managed to steal money from the people who use their service. Even if the people are refunded partially by the company and the rest from the FCC, these companies shouldn't be profiting from illegal business practices. Until the FCC starts taking harsher measures against companies that are guilty of cramming and slamming their users, incidents like this are only going to continue.
FCC Commissioner Ajit Pai had this to say: "Enforcement actions like this one are a good step, but more is needed. Our rules already offer one avenue for relief: the preferred carrier freeze, which lets consumers opt out of these deceptive marketing practices. But consumers shouldn't have to opt out of a market for fraud. My proposal: Let's open a proceeding and change this rule to make consumer protection not an option, but the default."
It is unfortunate that companies so readily take advantage of customers, but at least the FCC is trying to protect customers against such abuse. The FCC should pass new legislation that makes such operations by companies less profitable.