SEATTLE - October 23, 1998-The Attorney General's Office today announced the landmark settlement agreement in a multi-state lawsuit against a New Jersey corporation accused of “slamming” the long distance telephone service of consumers across the country.
The company agreed to pay 20 states, including Washington, a total of $1 million in civil penalties, costs and fees to settle the lawsuit. The suit alleged that Minimum Rate Pricing, Inc., used unfair and deceptive practices when it switched consumers' primary long distance carrier without their consent, or “slammed” them. Washington will receive more than $52,000 as its share of the settlement.
In addition to paying a penalty, Minimum Rate Pricing, Inc., agrees to change its business practices and provide restitution to consumers.
According to the lawsuit, MRP failed to get authorization for making the switch, misled consumers as to discounts available under MRP's service and failed to disclose it was a telecommunications company asking consumers to change their long distance carrier to MRP.
“MRP not only failed to obtain permission to switch the consumers' long distance service the first time, but also slammed them again once consumers discovered the `slam' and tried to return to their carrier of choice,” said Attorney General Christine Gregoire. “Consumers were essentially held hostage by this company.”
MRP has also agreed to notify all consumers switched to MRP before December 31, 1997, as well as those consumers who complained to the Attorney General's Office after that date, that they are entitled to have their charges re-rated to the price they would have paid to their prior carrier. MRP must refund all switching fees incurred by consumers.
Consumers who were switched to MRP after January 1, 1998 have until January 31, 1999 to file complaints with the Attorney General's Office requesting that MRP re-rate charges and refund any switching fees.
In addition to Washington, the other states participating in the settlement include: Arizona, Arkansas, Idaho, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Nebraska, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Texas, Vermont and Virginia.
Washington's settlement is subject to final approval by the King County Superior Court.
Anyone wanting to file a complaint about being slammed should send an e-mail to the Attorney General at firstname.lastname@example.org or call 1-800-551-4636.
File a Complaint
FTC - Common Carrier Bureau
AGO - Jan/97 Alert
Choosing a Long Distance Service
Consumer Protection Requirements for Telephone Competition