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Floor Statement - Agriculture FDA Appropriations

Location: Washington, DC

Mr. MCCAIN. Mr. President, today I am introducing the Consumer Anti-Slamming Act of 1998. This legislation is aimed at putting an end to an abusive and unscrupulous practice that affects thousands and thousands of consumers every year. Joining me as a co-sponsor of this legislation are Senator FRITZ HOLLINGS, the Ranking Member of the Senate Commerce Committee, and Senator FRIST and Senator SNOWE, also Members of the Committee. I am most grateful for their support in this important effort.

"Slamming" is the unauthorized changing of a consumer's long-distance carrier. A consumer who is slammed often receives lower-quality service or is charged higher rates. Sometimes consumers are not even aware that they have been slammed until they get their bills. When they realize what has happened, they have to go through the aggravation of getting their service switched back to their original carrier and having their bills adjusted. And they often find it difficult to secure compensation for any additional damages they may have incurred.

Mr. President, last year alone over 20,000 consumers filed slamming complaints with the FCC. This is by far the largest category of complaints the FCC received. When you stop to consider that only a small fraction of all consumers who are slammed actually file complaints about it with the Commission, the real dimensions of the problem become apparent. And those dimensions are growing: last year's 20,000 complaints represented a 25 percent increase in the number of complaints filed in 1996, despite the fact that the FCC adopted new rules to discourage slamming.

The reality we face is that unless Congress supplements by law what the FCC can do by regulation, this already bad problem will only get worse. This legislation will attack slamming in two ways: it will establish stringent anti-slamming safeguards to deter slamming from happening in the first place, and it will enlarge the remedies available to punish slammers and make consumers whole if it does. The bill does this by prescribing definitive procedures for telephone companies to follow, providing alternative ways for consumers to obtain redress for having been slammed, and giving federal and nonfederal authorities the power to impose tough sanctions, including high fines and compensatory and punitive damages.

The bill takes a straightforward approach. It prohibits a telephone company from changing a consumer's telephone service unless the company obtains a verbal, written, or electronic verification from the subscriber showing that the subscriber has consented to the change. The company making the change will be required to retain this verification. If a consumer charges a company with slamming, the company has 120 days in which to satisfy the consumer's complaint. If it does not do so, the company must promptly advise the consumer of that fact, and give the consumer a copy of the verification and information about how to pursue the complaint with the FCC and about all other available remedies. If a company ignores a consumer's slamming complaint, it will be subject to the penalty for slamming.

The bill then provides for simple, streamlined complaint resolution procedures at the FCC, requiring the Commission to issue a decision on the carrier's liability within 150 days. It broadens the Commission's enforcement powers by authorizing it to award both compensatory and punitive damages, and requires that damages be awarded within 90 days of the liability determination. It directs the FCC not to levy a fine of less than $40,000 against first-time offenders and $150,000 for repeat offenders absent mitigating circumstances, and it empowers the FCC to prosecute slammers who refuse to pay their fines. The bill also enables consumers to go after slammers in court instead of at the FCC through a state class-action suit. These alternatives-consumer action at the FCC and state action in court, backed up by stiff monetary penalties-will provide both a sword against past slamming and a shield against future slamming.

Finally, Mr. President, the bill assures that the FCC will detect and deter other problems that might result in slamming. It requires the Commission to report to Congress on telephone companies' telemarketing practices, to recommend whether it would be in the public interest to levy penalties directly on telemarketers or on other entities not currently subject to the bill's provisions, and to promptly adopt rules proscribing any deliberately deceptive or misleading telemarketing practices disclosed by the report.

The bottom line here, Mr. President, is that slamming has to stop, once and for all, and this bill means to stop it.

Mr. President, I ask unanimous consent that the text of the bill be printed in the RECORD.

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