Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, June 13, 1995 TAG: 9506130051
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
The Federal Communications Commission, possibly as early as today, plans to act in the area where complaints have been on the rise: long-distance companies' use of contests, prize giveaways, checks and other promotions to lure new customers.
The FCC receives more than 700 complaints a month in this area. ``It is the No. 1 complaint category at the commission,'' said Kathleen Wallman, chief of the FCC's Common Carrier Bureau.
In many of these cases, regulators say, people are unaware that by signing a contest form or consenting to a charitable donation they have agreed to switch to another long-distance company.
If the authorization information is included in the form, they say, it is often buried somewhere in tiny print.
The expected changes, designed to better protect consumers, would be added to existing rules adopted in 1992.
The biggest change, according to FCC officials, speaking on condition of anonymity, would require long-distance companies to provide consumers a piece of paper, separate from promotional material, authorizing a change in service.
For checks, the authorization form would not have to be separate, but it would have to be clearly and prominently marked on the front and the back of the check, according to long-distance company attorneys close to the proceeding.
AT&T and MCI already do this, company officials said. Sprint does not routinely offer checks, said spokeswoman Juanada Teas.
AT&T Vice President Gerry Salemme called the proposed rule changes ``pro-consumer, pro-competitive and well-balanced. ... They should protect customers from unscrupulous activities by a few companies in the industry.''
But an MCI official, who spoke on condition of anonymity, said the provision separating the service authorization from promotional materials is overly broad and would require MCI to change promotions that have not been the source of consumer complaints.
``We're trying to draw a clear line for long-distance companies and consumers,'' Wallman explained. ``So we don't have to get in the business of looking at every way companies market.''
In addition to the Big Three long-distance companies - AT&T, MCI and Sprint - several hundred companies provide long-distance services.
Many of those smaller companies do that by buying service from the big long-distance carriers at a wholesale rate and reselling it at a retail rate.
In another expected change, the FCC would require companies that resell long-distance service to list their own names on the forms authorizing a switch, telecommunications attorneys said.
For instance, MCI, runs a promotion targeting airline customers to switch service. The promotion material and authorization form are in one piece: the folders in which airlines distribute tickets. The new rules would require MCI to change this, the official said.
The MCI official said the rule change should be narrowly tailored to target the practices of companies that have a bad track record.
The authorization language is standard and reads along the lines of: ``I understand by signing this, I authorize a change in my primary long-distance carrier ... .''
Right now, many companies don't identify themselves, but simply tell prospective customers that they resell the service of, for example, AT&T.
Another big complaint comes from people who were switched and billed for calls at a rate higher than their preferred carrier.
Currently, consumers have to pay for those long-distance calls carried by the unauthorized phone company. The FCC is considering changing that.
by CNB