Attorney General's News Release

January 24, 1996

Texas long-distance carrier to pay $65,000 under agreement with Nixon over “slamming” practices

Jefferson City, Mo. — A Texas long-distance company accused of “slamming” consumers will change its business practices in obtaining customers in Missouri and pay $65,000 to the state, Attorney General Jay Nixon said today. Slamming refers to the practice of switching consumers' long-distance service, often without their consent.

Nixon filed suit last September in St. Louis against Home Owners Long Distance Inc. (HOLD), of San Antonio. He charged that HOLD used deceptive practices to switch consumers' long-distance service without their authorization and said his office had received numerous complaints from Missourians about HOLD's methods.

Consumer complaints indicated that the written authorization statements used to switch customers to HOLD often were forged, and HOLD allegedly failed to verify statements with consumers. The company solicited customers by distributing contest entry forms that stated, in small type, that consumers signing the form were authorizing a change in their long-distance service.

“Consumers should not have their long-distance service switched without their knowledge and consent,” Nixon said. “This agreement puts the burden on the long-distance carrier to ensure that any switch made was agreed to in writing by the person who had that authority. It also puts other phone slammers on notice that deceptive practices in gaining long-distance customers won't be tolerated in Missouri.”

Under the consent injunction signed yesterday by St. Louis City Circuit Judge Joan Burger, HOLD agreed to:

• Provide refunds, adjustments or credits to consumers upon request when switches are made without authorized written consent.
• Verify by first-class mail that any switch in carriers was made by the person authorized to do so, before billing the customer.
• Disclose in a clear and conspicuous manner the true purpose of any documents used as an authorizing form to switch long-distance services.
• Provide copies of the authorizing form to consumers who request it.
• Pay $65,000 to the Missouri Merchandising Practices Revolving Fund to be used for consumer education and investigative costs.
• Provide HOLD personnel and any of its independent contractors involved in marketing, management or advertising with a copy of the agreement.

Nixon said complaints about phone slamming have increased substantially in the past six months. Many consumers did not know that their carrier had changed until they saw the name of a new carrier on their monthly phone bill or received a call from their former carrier asking them to return.

He urged consumers to be extremely cautious of various ploys used by a number of companies to solicit customers:

• Read all fine print before signing your name. What you think is a simple contest entry or a charity solicitation may actually contain fine print that authorizes a change in your long-distance service.
• Regularly check your phone bill to make sure your long-distance provider is still listed. Unscrupulous businesses sometimes forge authorizations to bring in new customers. Your carrier might be changed without your knowledge.
• If you suspect you have been slammed, contact the Attorney General's Consumer Protection Hotline at 1-800-392-8222. There are several companies being investigated and additional complaints will help bring a quicker end to their illegal tactics.
• Contact your local phone carrier to see if they offer any protection from slamming. Some local carriers offer procedures or forms that customers can complete to require their written authorization before a long-distance carrier switch can be made.

Consumers who have questions about slamming can call the Attorney General's Consumer Protection Hotline at 1-800-392-8222. The TDD line for speech- and hearing-impaired consumers is 1-800-729-8668.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818