News Ticker

FCC fines Atlanta phone company $9 million for cramming, slamming and lying

GPSPS, Inc., an Atlanta telephone company, has been hit with a $9 million dollar fine from the Federal Communications Commission.

GPSPS was cited for slamming– switching consumers’ long distance carriers without their authorization; for cramming–billing consumers for unauthorized charges; and then for lying to the FCC and other regulators by submitting falsified evidence as “proof” that consumers gave the company the okay to switch providers.

“Companies that engage in these practices betray consumers who trust that their telephone bills will contain only authorized charges,” said Travis LeBlanc, the FCC’s enforcement bureau chief.  “Today’s announcement makes clear that the FCC will take strong action against those who switch consumers’ telephone carriers without authorization and then mislead the government to try to avoid detection.”

In a separate statement GOP Commission Ajit Pai called for stronger FCC rules to protect consumers from such fraudulent practices.

“Our slamming rules are intended to protect consumers from unauthorized changes to their telephone service provider…but these rules weren’t enough to protect GPSPS’s victims,” wrote commissioner Pai. “This isn’t the first time our rules have failed.  Indeed, fly-by-night operators have figured out how to profit from skirting our rules rather than complying with them… My proposal: Let’s open a proceeding and change this rule to make consumer protection not an option, but the default.”

The FCC reviewed more than 150 complaints against GPSPS that consumers filed with the commission, the Federal Trade Commission, the Public Utility Commission of Texas, and the Better Business Bureau. The FCC stated that GPSPS refused to refund all of the unauthorized fees it charged consumers and the company misrepresented to consumers that they or someone in their household had authorized GPSPS’s service.  GPSPS went so far as to claim it had audio recordings of the authorizations.  The FCC determined that the audio “verification” recordings GPSPS submitted to the Commission and state regulatory authorities were fabricated.

The FCC now counts 30 enforcement actions for cramming or slamming undertaken in the past five years. These actions have announced more than $100 million in penalties, and are slated to return more than $250 million to consumers.