> Before the

FEDERAL COMMUNCATIONS COMMISSION

Washington, D.C. 20554

In the Matter of )

) File No. ENF-99-09

Coleman Enterprises, Inc. )

d/b/a Local Long Distance, Inc. )

) NAL/ Acct. No. 916EF0004

Apparent Liability for Forfeiture )

## NOTICE OF APPARENT LIABILITY FOR FORFEITURE

Adopted: August 18, 1999 Released: August 19, 1999

By the Commission:

## I. INTRODUCTION

1\. By this Notice of Apparent Liability for Forfeiture (NAL)[^1], we
initiate enforcement action against Coleman Enterprises, Incorporated,
d/b/a/ Local Long Distance (LLD).[^2] For the reasons set forth below,
we find that LLD apparently willfully or repeatedly violated sections
201(b) and 258 of the Act,[^3] as well as Commission rules and
orders,[^4] by changing, without authorization, the preferred carriers
for interstate service designated by fourteen small business customers.

2\. As described below, the consumer complaints that support this NAL
illustrate an apparent disregard for the requirements of the Act and the
Commission's rules and orders. The facts presented in the record appear
to establish a willful or repeated pattern of conduct by LLD to engage
in the practice of "slamming."[^5] The violations are particularly
egregious because LLD changed consumers' long distance carriers by
intentionally misrepresenting the nature of its offering solely as a
service that would consolidate the customers' local and long-distance
telephone charges on one "local/ long distance" bill for the customers\'
convenience. LDD failed to explain to consumers that LLD would not
"consolidate" their local and long distance bills without changing their
long-distance service to LLD and paying LLD's rates. When consumers
agreed to a bill consolidation, LLD switched consumers\' interexchange
carriers (IXCs) to LLD without the consumers' authorization. The
evidence also suggests that the egregious nature of LLD's
misrepresentations were compounded by LLD's telemarketers' practice of
misrepresenting or implying that LLD was affiliated with, or was in
fact, the customer's local exchange company (LEC) or interexchange
company (IXC). Under these circumstances, several consumers were
understandably unaware that they even spoke with representatives of a
long distance company named Local Long Distance.

3\. Based upon our review of the facts and circumstances surrounding
these violations, we find that LLD is apparently liable for a total
forfeiture amount of \$1,120,000 for violations of section 258 of the
Act.[^6] In particular, we find that LLD is apparently liable for a
forfeiture amount of eighty thousand dollars (\$80,000) for each of the
slamming violations forming the basis of this NAL.

4\. As an additional measure, we require LLD to file with this
Commission within thirty (30) days of the date of this NAL, a compliance
plan detailing the actions it has taken, the procedures it has
established, and steps it will implement in the future to ensure
compliance with section 258 of the Act and the Commission's rules and
orders relating to preferred carrier changes. The plan shall set forth
procedures designed to enable LLD to promptly identify and address
consumer inquiries and concerns about its preferred carrier change
practices. We continue to review complaints filed against LLD[^7] and
may assess additional forfeitures if appropriate.

## II. THE CONSUMER COMPLAINTS

### A. Background

5\. Our action is based on an investigation conducted by the Common
Carrier Bureau concerning fourteen consumer complaints, filed with the
Commission between September, 1998 and May, 1999, all of which allege
that LLD fraudulently switched the complainants\' preferred carriers
without the consumers' authorization.[^8] Upon receipt of the consumer
complaints, the Common Carrier Bureau\'s Consumer Protection Branch
forwarded the complaints to LLD along with Notices of Informal Complaint
(Notices) in accordance with the Commission\'s rules.[^9] LLD's
barebones responses generally failed to address consumers' specific
concerns that the sales and verification calls were deliberately
misleading and confusing. [^10] LLD\'s letters typically noted the
amount of money LLD had credited to a complainant\'s account in an
apparent attempt to resolve the complaint and eliminate further
proceedings at the Commission.[^11] In an effort to obtain additional
information, the Consumer Protection Branch served upon LLD a Further
Notice of Informal Complaint (Further Notice).[^12] The Further Notice
directed LLD to provide the Commission with responses to specific
requests, including copies of audio tapes of the sales or verification
calls.[^13] On May 7 and July 14, 1999, LLD submitted the material
sought by the Consumer Protection Branch's Further Notice, including
copies of the sales and verification scripts used by LLD and its agents.

### B. Sales and Verification Scripts Submitted by LLD

6\. Before detailing the specific complaints framing the basis of this
action, we take note of the materials LLD provided in response to the
Further Notice. Of particular relevance is the sales script, which by
LLD's apparent own admission, formed the basis of what LLD's
telemarketers were to tell consumers during telemarketing calls.[^14]
These scripts are important to our evaluation because, while the
purported verification portion of the telemarketing sale was recorded by
LLD, the actual sales pitches made to consumers before this verification
were not recorded.[^15] The text of the sales script would, even if read
as written, appear to provide the customer little, if any, indication
that the telemarketer is offering to switch the customer to a new long
distance carrier. The sales script directs a sales representative to
state:

> I'm calling regarding a new billing format. Due to a lot of complaints
> and requests about the separate bills and monthly service fees, what
> we are doing is giving you the option of going to the old billing
> format of combined billing. What that means, is putting all of the out
> of state calls back on the local telephone bill. So what you receive
> is just one itemized bill and write only one check to your local
> telephone company and they will pay the long distance bill for you. It
> will also decrease any fee you are currently paying to \$3.95 and a
> discounted rate of only .25 \[sic\] cents. It is a free service to
> combine your bill.[^16]

The language of the sales script emphasizes the offer of a bill
consolidation service and does not explain to the consumer that
acceptance of the bill consolidation service will result in a preferred
carrier change. The only possible reference to a switch in carriers
contained in the sales script is implied by the following ambiguous
language: "Local Long Distance will provide the service to have the
bills combined at no cost to you, and have any service fee reduced to
\$3.95, and the business discount rate of \$0.25 \[sic\] cents a minute
anywhere within the United States and Canada."[^17] The language of the
script fails to inform the consumer that agreeing to a billing
consolidation will result in a change in the consumer's preferred long
distance carrier to LLD, nor is the telemarketer directed to request the
consumer's authorization to make such a change.

7\. As illustrated by the consumer complaints described below, we point
out that LLD telemarketers apparently did not follow this script
*verbatim*. Rather, the consumers assert that the telemarketing pitches
they received contained misrepresentations about the service being
provided and the entity providing that service. For example, consumers
allege that LLD's telemarketers claimed to be representatives of the
complainant's local phone company. While LLD disclaims knowledge or
responsibility for any such misrepresentations, this apparent pattern of
conduct is consistent with and facilitated by the emphasis of LLD's
marketing scripts on a billing service rather than long distance
service, as well as the company's choice of name.

8\. In response to the Branch's Further Notice, LLD also provided
verification scripts used by the third party[^18] that verified
consumers' carrier change authorizations and the corresponding audio
tapes of those verifications.[^19] Both the verification scripts and the
verification tapes reveal that LLD telemarketers conducted a three way
call with the consumers and LLD's third-party verifiers purportedly to
confirm that the consumers had authorized a switch to LLD\'s
long-distance service.[^20] The verification script states that a
verifier should inform the caller, "\[t\]he representative will be
giving me all the account information. Please feel free to correct
him/her if h/she is wrong, OK?"[^21] The telemarketer and verifier then
exchange pertinent information regarding the consumer's telephone
numbers and address. After this exchange, the verifier addresses several
questions to the consumer, including requesting the consumer's name and
title. At no time during the "verification" is the consumer directly
asked if he or she is authorizing LLD (or any carrier) to switch the
purported long distance provider for that residence or business,
although the consumer is asked if they are the "authorized person to
have Local Long Distance provide long distance service for the
business/residence."[^22] According to the script, the verifier
terminates the call with the statement: "Your new long distance service
starts in 5-10 days, provided by Local Long Distance, which is
independent of your local telephone company." In those instances, when
the verification tapes include this statement, it is generally read very
rapidly.[^23] This closing statement is the most direct reference found
in either the marketing script or the verification script that the
consumer's preferred carrier would be changed. At no time during either
the marketing or verification call do the scripts show that the consumer
is asked for authorization to switch their preferred carrier to LLD.
Rather, both the marketing and verification scripts advise consumers
that LLD's service is a billing consolidation service. Furthermore,
several of the audio tapes provided by LLD demonstrate that the
verifier, when questioned by the consumer about whether their preferred
long distance service carrier would change, intentionally misrepresented
the nature of LLD's service as solely a billing consolidation service.

### C. Consumer Complaint Profiles

9\. This Order profiles three slamming complaints from small business
consumers: Advance Mortgage Corporation of Bagersville, Indiana; Jeffrey
Animal Hospital of Farmington Hills, Michigan; and Fantasy Custom Yachts
of Monticello, Kentucky. In addition to the three profiled complaints,
this action is based upon eleven other slamming complaints with
supporting statements. [^24] These complaints contain specific
allegations that LLD switched the complainants' preferred carriers
without proper authorization through the use of misrepresentation by its
telemarketers. These complaints were filed by the following small
business consumers: Eades ER Dental of San Clemente, California; Silvana
R. Barahona of New York, New York ; Sage Capital of Bellevue, Idaho;
Quality Pacific of Bellevue, Washington; Arco Floor Covering of Van
Nuys, California; Lera/ Dynalectric of San Francisco, California;
Starfire, Incorporated of Wildomar, California; Mark Dinges,
Incorporated d/b/a California Creations of Brea California; Spring
Valley Auto Parts of Spring Valley California; Mark Nelson Werther,
A.I.A. of Bender, Pennsylvania; and Accord Interests, Inc. of Los
Angeles, California. Pertinent information concerning these complaints
is set forth in Appendix A to this Order. The 14 complaints upon which
this action is based represents only a small portion of the 306 slamming
complaints against LLD filed with the Commission and served upon LLD
between June 1998 and May 1999.

**1. The Advance Mortgage Corporation Complaint**

10\. The allegations of Ms. Sherry Johnson of Advance Mortgage
Corporation (Advance Mortgage) are typical of complaints filed against
LLD.[^25] In August 1998, Ms. Johnson received a phone call from a
"Sprint Local Long Distance" representative offering to waive a charge
appearing on Advance Mortgage's telephone bill.[^26] Sprint was Advance
Mortgage's local telephone service provider. According to Ms. Johnson,
the representative required Ms. Johnson's authorization to waive the
charge.[^27] Ms. Johnson was somewhat skeptical of the alleged waiver of
charges and as such, Ms. Johnson stated clearly to the sales
representative that she refused to change her long distance
carrier.[^28] According to Ms. Johnson, the "Sprint Local Long Distance"
representative and later, verifier, insisted that they "were just
waiving the charge" that was on her bill.[^29] Ms. Johnson discovered,
however, after a review of her local telephone bill from Sprint that LLD
had changed the company's preferred carrier to LLD.[^30] Ms. Johnson
states that she never received any indication from the LLD
representative that she was authorizing a change in Advance Mortgage's
preferred carrier.[^31]

11\. As outlined above, the Consumer Protection Branch forwarded the
Advance Mortgage complaint to LLD along with a Notice of Informal
Complaint (Notice) in accordance with the Commission's rules.[^32] In
response, LLD filed with the Commission a letter stating that "among the
services that Local Long Distance offers its customers is a consolidated
billing option which allows subscribers to receive a single bill for
local and long distance service."[^33] LLD's response claims that LLD
investigated the complaint and determined that its verification company
had obtained Ms. Johnson's verbal consent to change long distance
companies.[^34] LLD's response, however, fails to address the
allegations in Advance Mortgage's complaint that LLD's sales agent
misrepresented herself as calling from Sprint, the company's local
carrier, and misled Ms. Johnson into believing that by verifying Advance
Mortgage's telephone numbers she waiving a charge rather than changing
the company's preferred carrier.

12\. The Consumer Protection Branch served upon LLD a Further Notice of
Informal Complaint (Further Notice) which requested information,
including recordings or other evidence, documenting that LLD had
verified Advance Mortgage's authorization.[^35] LLD responded by
providing the Commission with a more detailed written response, sales
and verification scripts, and an audio tape of Sherry Johnson's
conversation with the third party verifier and the LLD sales
representative.[^36] LLD specifically denies any wrongdoing in the
matter and states its belief that "it has responded appropriately to the
Further Notice."[^37]

13\. An analysis of the LLD sales and verification scripts and the audio
tape of the conversation between Sherry Johnson and the verifier
supports Ms. Johnson's complaint.[^38] As outlined above, the sales and
verification scripts, on their face, misrepresent the nature of LLD's
offering. Furthermore, the verification tape provided by LLD contains
evidence of egregious misrepresentations. Twice during the verification
call Ms. Johnson states that she understood that her preferred carrier
would not change and asks for affirmation of that fact. In response, the
verifier advises Ms. Johnson that Local Long Distance merely was
providing a billing service. We have included a transcribed version of
Ms. Johnson's verification call as Appendix D to this NAL.[^39]

**2. The Jeffery Animal Hospital Complaint**

14\. Mr. Patrick Lewis, business manager for Jeffrey Animal Hospital,
states in his complaint that on October 29, 1998, he received a
telephone call at his office from an individual who identified herself
as a representative from Ameritech, Jeffrey Animal Hospital's local
service provider. [^40] According to Mr. Lewis' account, the caller
claimed that she had spoken to Dr. Jeffrey, the owner of the hospital,
regarding credits due to the Hospital's accounts as a result of having
been switched to residential service.[^41] The caller asked Mr. Lewis to
"verify", or confirm the Hospital's telephone numbers.[^42] Mr. Lewis
verified the accuracy of the telephone numbers, and, subsequently, the
caller transferred him to their "verification department."[^43] Mr.
Lewis states that while the "verification department" listened, the
alleged Ameritech representative repeated her questions to Mr.
Lewis.[^44] At the close of the questioning, the alleged Ameritech
representative terminated the call.[^45] Soon after this call was
terminated, Mr. Lewis received a call from another Ameritech
representative who asked him to verify whether he wanted to change the
Hospital's long distance service to a company named Local Long
Distance.[^46] Mr. Lewis assured the Ameritech representative that he
did not want the Hospital's long distance provider changed.[^47]
Suspecting that the business had been slammed, Mr. Lewis confirmed that
Ameritech had not called him regarding credits on the Hospital's
account.[^48] Mr. Lewis then contacted a LLD service representative to
inform her that the Hospital "did not want her company for my long
distance."[^49]

15\. On November 9, 1998, however, Mr. Lewis received a telemarketing
call from AT&T, the Hospital's preferred long distance carrier, asking
the Hospital to switch back to AT&T.[^50] This phone call alerted Mr.
Lewis that a change had occurred in the Hospital's preferred
carrier.[^51] Mr. Lewis determined, through phone conversations with the
Hospital staff and customer service representatives from Ameritech and
LLD that LLD had changed the Hospital's preferred carrier by misleading
a Hospital receptionist.[^52] According to his statement, Ms. Lori Peet
was misled by the LLD representative into believing that she was
verifying telephone numbers at the request of Ameritech.[^53] Rather, as
Mr. Lewis and Ms. Peet later realized, LLD used that conversation as the
basis as to change the Hospital's preferred carrier.[^54] After
discovering the fraudulent change, Mr. Lewis contacted LLD and demanded
that the company send him a tape of the alleged authorization.[^55]

16\. The Consumer Protection Branch forwarded the complaint to LLD along
with a Notice[^56] and received a letter containing boilerplate language
regarding its "consolidated billing option. . . ."[^57] LLD's response
claims that a third party verifier obtained customer authorization "in
compliance with the Commission's rules. . . ."[^58] LLD's responds
further that it had obtained Ms. Peet's verbal consent to change long
distance companies.[^59] Similar to other complaints, LLD's response
fails to address the allegations in the Hospital's complaint that LLD's
sales agent misrepresented him or herself to Mr. Lewis and Ms. Peet as a
customer service representative of Ameritech.

17\. On April 21, 1999, the Consumer Protection Branch served upon LLD a
Further Notice in which the Commission requested the audio tapes
pertaining to the Jeffrey Animal Hospital Complaint.[^60] On May 7,
1999, LLD's counsel provided the Commission with a more detailed written
response, copies of the sales and verification scripts, and an audio
tape of the complainant's conversation with the third party verifier and
the LLD sales representative.[^61] LLD does not, however, address the
allegations that LLD attempted to mislead Mr. Lewis or Ms. Peet into
"verifying" the Hospital's telephone numbers for the purpose of changing
the Hospital's preferred carrier.

18\. The material provided in LLD's response confirms the Hospital's
allegation that LLD apparently changed the Hospital's preferred carrier
without authorization.[^62] The sales script fails to inform a consumer
in definitive terms that the consumer's long distance service will be
changed.[^63] Rather, as described above, the sales script emphasizes
LLD's bill consolidation service and does not explain that in order to
receive the service, the consumer's preferred carrier would be changed
to LLD.[^64] LLD's response includes a copy of the verification script
and audio tape of the conversation between Lori Peet and the verifier.
The audio tape conversation is practically identical to the information
contained in the verification script. As described above, the
verification script provides for the continued marketing of a bill
consolidation service and does not ask the consumer if they have
authorized a change in their preferred carrier.

**3. The Fantasy Custom Yachts Complaint**

19\. James Troxell, vice-president of Fantasy Custom Yachts (Fantasy),
alleges that although he never agreed to change carriers on behalf of
Fantasy, LLD, nonetheless, converted the company's long distance carrier
from MCI to LLD without his authorization.[^65] Similar to the
allegations in Advance Mortgage and Animal Hospital, Mr. Troxell states
that he received a phone call on or about September 1998, from a person
presenting themselves as a representative of GTE, Fantasy's local
service provider.[^66] The representative claimed that GTE owed Fantasy
a credit of \$400 due to overbilling and needed his authorization prior
to issuing a rebate check.[^67] Mr. Troxell asked the representative
whether she was attempting to switch his company's long distance
service.[^68] The representative assured Mr. Troxell that, no, she was
attempting only to obtain verification for the rebate check.[^69] Mr.
Troxell claims that he was transferred to another person who verified
Fantasy's phone numbers and address.[^70] Again, Mr. Troxell insisted
that he did not want his long distance service changed.[^71] According
to Mr. Troxell, the verifier promptly hung up.[^72] Mr. Troxell claims
that almost immediately, he received another call from the purported GTE
representative who assured him that his service would not change.[^73]
He provided the caller with additional account information and completed
the call.[^74] Mr. Troxell discovered the unauthorized change to LLD on
his September 10, 1998 bill and immediately changed his service back to
MCI.[^75]

20\. The Consumer Protection Branch forwarded the Fantasy complaint to
LLD along with a Notice.[^76] In response, LLD filed with the Commission
a letter indistinguishable from its other responses.[^77] LLD's response
claims, in identical content and form to its other responses, that LLD
investigated the complaint and determined that its verification company
had obtained Mr. Troxell's verbal consent to change long distance
companies.[^78] LLD's response claims, in contrast to its other
responses, that it considers "Mr. Troxell's accusations of
misrepresentation on the part of Local Long Distance's marketing agent"
as "quite troubling."[^79] LLD states that, "\[a\]s only the
verification process is recorded, it is not possible to determine what
was said between Mr. Troxell and any Local Long Distance sales
agent."[^80] LLD continues, stating that "\[m\]isrepresentations of any
kind are not company policy, and the company strongly condemns all
misrepresentations."[^81]

21\. On April 21, 1999, the Consumer Protection Branch served upon LLD a
Further Notice.[^82] LLD's counsel provided a detailed written response,
copies of the sales and verification scripts, and an audio tape of the
conversation with the verifier.[^83] Although LLD specifically denies
any wrongdoing,[^84] its response supports Mr. Troxell\'s assertion that
Fantasy's preferred carrier was changed without authorization. The
language of LLD's sales script directs the customer service
representative to state at the close of the call that "I do need to
transfer you to verification, they are going to . . . let you know that
Local Long Distance will combine the bill in 5 to 10 days. . . \[h\]old
the line while I transfer you, and enjoy the combined billing."[^85]
Once again, LLD's response appears to support Mr. Troxell's claim that,
either by representing itself as the customer's local carrier offering
to credit a customer's account, or through the offer of a bill
consolidation service, LLD apparently made intentional
misrepresentations in an attempt to switch Fantasy's preferred long
distance carrier.

22\. LLD's counsel also provided the Commission with a copy of the audio
tape of the verification call between Mr. Troxell and LLD's third party
verifier.[^86] On May 13, 1999, the Commission provided Mr. Troxell with
an opportunity to listen to and review the contents of the audio
tape.[^87] Mr. Troxell declares, in a signed statement, that he
"know\[s\] part of this tape has been edited to show that I had given
authorization to LLD to have my long distance service change (sic) and
to show that I agreed with the rates they were offering. At no time did
I ever authorize a change in my long distance carrier, therefore I would
not have agreed with any of their rates."[^88] Even assuming, however,
that the audiotape is an accurate reflection of the verification
conversation, the tape still supports Mr. Troxell's claim that he did
not knowingly authorize a change in his preferred long distance carrier
because it is apparent from the transcript that the customer on the tape
did not understand that he was verifying such a change.[^89]

D.  **The Remaining Consumer Complaints**

23\. The remaining eleven consumer complaints that are the subject of
this NAL similarly allege that LLD fraudulently changed the consumers\'
preferred carriers without their authorization.[^90] In several of the
remaining complaints, the small business consumers recall their
realization that LLD's telemarketer was attempting to mislead them, and
as such, questioned whether the call was a pretext to deceive them into
changing their long distance service.[^91] These complainants report
further that LLD sales representatives and verifiers assured them that
their preferred carrier for long distance service would not change.
Nonetheless, LLD used the call, whether it was for verifying the lines,
applying an account credit, or providing a bill consolidation, as
authority to execute a preferred carrier change on these consumers'
behalf.

24\. In other of the remaining complaints, consumers claim that prior to
discovering unauthorized long-distance charges from LLD on their
telephone bills, they had no contact with LLD and that they did not
authorize a switch of their long distance service to LLD.[^92] Although
these consumers do not specifically recall receiving a telemarketing
call from LLD, we find that the record demonstrates it is probable that
these consumers were subjected to the same types of misrepresentations
detailed above. Indeed, the intent of LLD's sales and verification
scripts (not to mention the apparent intentional misrepresentations by
LLD's telemarketers described by other consumers) was to obfuscate the
origin and nature of LLD's service offering.

25\. As described above, the sales script submitted by LLD illustrates
that LLD marketed its service as a billing consolidation service and not
as a long distance service. To the extent that the telemarketer followed
the scripts, the consumer would at no time have been asked to change
their preferred carrier to LLD. In fact, it is unclear to what degree
that even a telemarketer reading LLD's scripts would have understood
that LLD was seeking to switch consumers' preferred carriers.
Furthermore, the name Local Long Distance could have reasonably
contributed to consumer confusion as to the entity originating the
telemarketing calls, particularly when combined with the specific
misrepresentation of LLD\'s telemarketing agents and their emphasis that
LLD's service would simply consolidate the consumers' local and long
distance billing. Indeed, we believe that such confusion was likely
contemplated by the company in choosing such a generic name.

26\. As with the other complaints forming the basis of this order, LLD
submitted audio tapes of the third party verification as evidence that
these consumers had authorized LLD to switch their preferred carrier. A
review of these tapes shows that they closely follow the verification
script provided by LLD. As with all the verification tapes at issue in
this NAL, at no time during the taped conversation is the consumer
directly asked if she has authorized a change in their preferred carrier
to LLD. Furthermore, the consumer is not asked if she understands that
in exchange for agreeing to receive a consolidated billing service, LLD
will change her service provider to LLD. Therefore, based on the scripts
and audio tapes provided by LLD, as well as the pattern of behavior
described by complainants who remember LLD's call, we conclude that LLD
also willfully or repeatedly changed these consumers' preferred carriers
without authorization through the use of misleading telemarketing calls.

**III. DISCUSSION**

**A. Violations Evidenced in the Complaints**

27\. The consumer complaints described above and LLD\'s responses depict
a disturbing pattern of willful disregard for the requirements of the
Act and the Commission\'s rules and orders. Section 258 of the Act,
adopted in 1996, makes it unlawful for any telecommunications carrier to
\"submit or execute a change in a subscriber\'s selection of a provider
of telephone exchange service or telephone toll service except in
accordance with such procedures as the Commission shall
prescribe.\"[^93] The goal of section 258 is to eliminate the practice
of \"slamming.\" Pursuant to section 258, carriers are absolutely barred
from changing a customer\'s preferred local or long distance carrier
without first complying with the Commission\'s verification
procedures.[^94] These rules and orders require that IXCs either obtain
a signed letter of authorization (LOA) or, in the case of telemarketing
solicitations, follow one of the telemarketing verification procedures
before submitting preferred interexchange carrier (PIC) change requests
to LECs on behalf of consumers.[^95]

28\. The statements and other information provided by the complainants,
and the limited responses by LLD, represent credible and compelling
evidence that LLD failed to obtain the complainants\' authorization
prior to submitting preferred carrier-change orders. LLD\'s
telemarketers repeatedly misrepresented the nature of LLD\'s service
offering or in other ways engaged in practices designed to prevent
consumers from understanding that LLD was seeking to change their
preferred carriers.[^96] In the Advance Mortgage Corporation Complaint,
for example, Sherry Johnson asserts that the LLD telemarketer who
slammed her merely stated that they were waiving a charge that was on
her bill. Despite the use of a telemarketing and verification system
which would have allowed LLD to market truthfully and verify accurately
the offer of LLD's service, LLD employed fraudulent and misleading
practices to lure or confuse consumers into changing their preferred
carriers.

29\. The record supports our finding that LLD engaged in a pattern of
conduct designed to switch consumers\' preferred long distance carriers
without authorization. First, LLD\'s own sales scripts (which they
submit as having been used in connection with the complaints at issue)
appear intended to conceal the purpose of the telemarketing calls. The
actual purpose of the calls was to change consumers\' preferred long
distance carriers by focusing solely upon the offer of a free billing
service. As prepared by LLD, a reasonable consumer would not understand
that his or her affirmative response to the billing consolidation
service would result in (and, indeed, was contingent upon) a switch to
LLD for long distance service. [^97] Second, LLD\'s telemarketing
employees and agents further promoted this false impression to
prospective customers through intentional misrepresentations concerning
the nature and origin of the service being marketed. In particular, it
appears that LLD\'s telemarketers engaged in a pattern of
misrepresenting that they were calling on behalf of the consumer\'s
local telephone company, presumably to more readily convince the
prospective customer that they were merely providing a no-cost billing
consolidation or other service. [^98] Moreover, in those instances when
the consumer nonetheless had suspicions that LLD was trying to switch
his or her long distance carrier, LLD\'s telemarketers apparently
provided false responses to specific questions in order to maintain this
deception.

30\. Third, we find that LLD\'s preferred evidence of verification in no
way demonstrates consumers\' authorization to switch carriers as
mandated by the Commission\'s rules; but rather was designed to further
the pattern of misrepresentations concerning the nature and origin of
the services being marketed. As detailed above, the verification scripts
and tapes provided to the Commission by LLD maintain the emphasis on the
billing service and fail to clearly ask if the consumer is authorizing a
switch of his or her preferred carrier. Indeed, as evidenced by the
verification tapes, most of the conversation during this part of the
telemarketing call was between the telemarketing salesperson and the
asserted verifier, not between the verifier and the prospective
customer. The active participation of the salesperson in this
verification process undermines the ability of the consumer to
understand what is being authorized, and raises doubts about the
independent status of the verifier, as required by our rules. Finally,
we believe that the company and its telemarketers knowingly used the
generic nature of the name \"Local Long Distance\" in a manner intended
to further this overall deception. While carriers are free to market
under any name they wish, it is apparent from our review of the scripts
and verification tapes that the name \"local long distance\" was
utilized in a manner intended to convey to consumers a misunderstanding
of the nature and origin of the service being marketed.

31\. In sum, the statements and other information provided by the
complainants, LLD's limited responses, and the scripts and audio tapes
provided by LLD, demonstrate that LLD apparently changed the preferred
carriers of fourteen complainants without their authorization through
the use of fraudulent telemarketing. As described above, LLD has failed
to provide any evidence or information to counter the complainants\'
claims. In fact, the evidence provided supports the complainants'
allegations that the deceptive telemarketing practices were designed to
mislead consumers into changing their preferred carriers. Accordingly,
we conclude that LLD has apparently willfully or repeatedly violated
section 258 of the Act and the Commission\'s rules and orders pertaining
to preferred carrier changes.[^99]

32\. Based on LLD's apparent practices as described in this NAL, we also
find LLD liable for apparent violations of section 201(b) of the
Act,[^100] which provides in pertinent part that "\[a\]ll charges,
practices, classifications and regulations for and in connection with. .
. communication service shall be just and reasonable. . . ."[^101] The
Commission has previously found that the use of deceptive marketing by
carriers may constitute an unjust or unreasonable practice in violation
of section 201(b).[^102] We find that LLD's misrepresentation of its
identity, its withholding of material facts regarding its service
offerings, and its attempt to mislead consumers, constitute unjust and
unreasonable practices.

**B. Forfeiture Amount**

33\. LLD\'s apparent failure to obtain authorization to switch the
preferred carriers of the consumers described in this NAL, persuade us
that a significant forfeiture is warranted against LLD for willful or
repeated violations of section 258 of the Act and the Commission\'s
slamming rules and orders. Section 503(b) of the Communications Act
authorizes the Commission to assess a forfeiture of up to \$110,000 for
each violation of the Act or of any rule, regulation, or order issued by
the Commission under the Act.[^103] In exercising such authority, we are
required to take into account \"the nature, circumstances, extent, and
gravity of the violation and, with respect to the violator, the degree
of culpability, any history of prior offenses, ability to pay, and such
other matters as justice may require.\"[^104] The Commission\'s
forfeiture guidelines currently establish a standard forfeiture amount
of \$40,000 for violations of our rules and orders regarding
unauthorized changes of preferred interexchange carriers.[^105] These
policies and guidelines include \"upward adjustment criteria\" that
warrant a higher forfeiture amount based on our evaluation of the
particular actions and circumstances of the violator.[^106] These
include the *egregiousness* of the misconduct, ability or inability to
pay, whether the violation was an *intentional* violation, whether
substantial harm resulted from the violations, history of compliance
with Commission requirements, whether the violator realized substantial
economic gain from the misconduct, and whether the violation is
*repeated or continuous*.[^107] The Commission retains the discretion to
depart from the guidelines and issue forfeitures on a case-by-case
basis, under its general forfeiture authority contained in section 503
of the Act.[^108]

34\. We note that on several occasions, the Commission has sternly
admonished carriers that it would take swift and decisive enforcement
action, including the imposition of substantial monetary fines, against
any carrier found to have engaged in slamming.[^109] More recently, the
Commission has issued NALs assessing forfeitures at \$80,000 per
violation for the use of forged LOAs.[^110] In those Orders, the
Commission found that the higher forfeiture amounts were warranted by
the egregious nature of the misconduct, the carrier's intent to slam
consumers, and the repeated nature of the slamming violations.[^111]

35\. In the instant case, the evidence before us indicates that LLD has
willfully or repeatedly engaged in the use of fraudulent telemarketing
and verification procedures as part of a pattern to intentionally slam
consumers. The record reveals that LLD utilized and approved sales and
verification scripts which evidence a clear intent to mislead and
confuse consumers.[^112]

These scripts were provided by LLD in response to each of the complaints
at issue and illustrate repeated attempts by LLD to sidestep the Act and
the Commission's slamming rules and orders by employing telemarketing
scripts designed to mislead consumers into "authorizing" a
preferred-carrier change. Finally, the record demonstrates particularly
egregious conduct on the part of LLD. For example, complaint after
complaint alleges that LLD representatives made false claims regarding
LLD's identity and the nature of its service offering in an apparent
effort to prevent consumers from understanding that LLD was changing
their preferred carriers. In the face of such a clear pattern of
misconduct, we thus find that the upward adjustment criteria in our
forfeiture guidelines that involve egregiousness of misconduct, intent
of the carrier, and the repeated nature of violations are applicable in
this case. Applying those criteria to the facts of this case, we
conclude that it is appropriate to impose a forfeiture amount that is
double the base amount contained in our forfeiture guidelines for those
preferred carrier change requests based on fraudulent telemarketing.

36\. Although we find LLD liable for apparent violations of section
201(b) of the Act, we decline to assess a forfeiture amount for these
violations, and instead exercise our discretion to use this conduct to
support our conclusion that the apparent violations of section 258 and
the Commission's slamming rules and order were intentional or
egregious.[^113]

37\. Thus, we find that LLD is apparently liable for a forfeiture of
\$80,000 for each of the unauthorized conversions, via telemarketing, of
fourteen complainants\' preferred carriers in violation of section 258
of the Act. As evidenced by the record, LLD\'s deceptive telemarketing
practices were aimed at slamming consumers. This NAL places carriers on
notice that the Commission will not tolerate this type of violation and
that carriers must take the steps necessary to inform consumers clearly
in a telemarketing context that they are agreeing to change their long
distance service. Taken together, the forfeitures we assess against LLD
for violations of section 258 of the Act result in a total forfeiture
amount of \$1,120,000. LLD shall have the opportunity to submit evidence
and arguments in response to this NAL to show that no forfeiture should
be imposed or that some lesser amount should be assessed.[^114]

38\. Finally, our review of LLD\'s responses indicates a need for the
Commission to continue to monitor LLD\'s preferred carrier change
practices. We, therefore, require LLD to file with this Commission a
compliance plan that shall include procedures designed to promptly
identify and address consumer inquiries and concerns about LLD\'s
preferred carrier change practices.[^115] The compliance plan shall
detail actions LLD will take and procedures it will establish to comply
with the Act and with the Commission\'s rules and orders. These actions
will include, at a minimum, changes in LLD's sales scripts and changes
in LLD's verification practices. The Commission will closely monitor the
level and content of consumer complaints to determine whether the
establishment of LLD\'s proposed management practices leads to a
decrease in unauthorized preferred carrier changes.

**VI. CONCLUSIONS AND ORDERING CLAUSES**

39\. We have determined that Coleman Enterprises d/b/a Local Long
Distance apparently violated sections 201 and 258 of the Communications
Act and the Commission\'s preferred carrier change rules and orders by
converting the preferred carriers of the fourteen consumers identified
above, on the dates and in the manner described herein. We have further
determined that Coleman Enterprises d/b/a Local Long Distance is
apparently liable for a total forfeiture amount of \$1,120,000.

40\. Accordingly, IT IS ORDERED, pursuant to section 503(b) of
Communications Act of 1934, as amended, 47 U.S.C. § 503(b), section 1.80
of the Commission\'s rules, 47 C.F.R. § 1.80, that Coleman Enterprises,
Inc. IS HEREBY NOTIFIED of an Apparent Liability for Forfeiture in the
amount of \$1,120,000 for willful or repeated violations of section 258
of the Act[^116] and the Commission\'s preferred carrier change rules
and orders as described in the paragraphs above.[^117]

41\. IT IS FURTHER ORDERED, pursuant to section 1.80 of the
Commission\'s rules, 47 C.F.R. § 1.80, that within thirty (30) days of
the release of this Notice, Coleman Enterprises, Inc. SHALL PAY the full
amount of the proposed forfeiture[^118] OR SHALL FILE a response showing
why the proposed forfeiture should not be imposed or should be reduced.

42\. IT IS FURTHER ORDERED, pursuant to sections 4(i) and 218 of the
Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 218, that
Coleman Enterprises, Inc. SHALL FILE with the Commission, within thirty
(30) days of the date of this NAL, a compliance plan detailing the
actions it will take and the procedures it will establish, to ensure
compliance with section 258 of the Act and the Commission\'s rules and
orders relating to preferred carrier changes. The compliance plan shall
set forth procedures designed to enable Coleman Enterprises d/b/a Local
Long Distance to promptly identify and address consumer inquiries and
concerns about its preferred carrier change practices.

43\. IT IS FURTHER ORDERED that copies of this Notice of Apparent
Liability for Forfeiture SHALL BE SENT by certified mail to: Daniel G.
Coleman, President, Coleman Enterprises, Inc. d/b/a Local Long Distance,
6053 Hudson Road, Suite 110 Saint Paul, Minnesota, 55125.

**FEDERAL COMMUNICATIONS COMMISSION**

Magalie Roman Salas

Secretary

[^1]: See 47 U.S.C. § 503(b)(4)(A). The Commission has authority under
    this section of the Act to assess a forfeiture penalty against a
    common carrier if the Commission determines that the carrier has
    "willfully or repeatedly" failed to comply with the provisions of
    the Act or with any rule, regulation, or order issued by the
    Commission under the Act. The section provides that the Commission
    must either issue a written notice of apparent liability or provide
    notice and opportunity for hearing before imposing such penalties.

[^2]: Coleman Enterprises, Incorporated does business as (d/b/a) Local
    Long Distance (LLD). Coleman Enterprises is headquartered at 6053
    Hudson Road, Suite 110, Saint Paul, Minnesota 55125.

[^3]: Section 47 U.S.C. § 201(b); 47 U.S.C. § 258. Section 201(b)
    provides, in pertinent part, that "\[a\]ll charges, practices,
    classifications, and regulations for and in connection with. . .
    communication service shall be just and reasonable...."; Section 258
    makes it unlawful for any telecommunications carrier to "submit or
    execute a change in a subscriber's selection of a provider of
    telephone exchange service or telephone toll service except in
    accordance with such procedures as the Commission shall prescribe."

[^4]: *See* 47 C.F.R. § 64.1100; *Implementation of the Subscriber
    Carrier Selection Changes Provisions of the Telecommunications Act
    of 1996 and Policies and Rules Concerning Unauthorized Changes of
    Consumers' Long Distance Carriers*, CC Docket No. 94-129, Second
    Report and Order and Further Notice of Proposed Rulemaking, 14 FCC
    Rcd 1508 (1998) (*1998 Second Order & FNPRM*); *EqualNet Corporation
    Proposed Request for Waiver*, 14 FCC Rcd 3975 (1999) (*EqualNet
    Waiver Order*); Further Notice of Proposed Rule Making and
    Memorandum Opinion and Order on Reconsideration, 12 FCC Rcd 10674
    (1997) (*1997 FNRPM & Order on Reconsideration); Policies and Rules
    Concerning Unauthorized Charges of Consumers' Long Distance
    Carriers*, 10 FCC Rcd 9560 (1995*) (LOA Order*), stayed in part, 11
    FCC Rcd 856 (1995) (*In-bound Stay Order*); *Policies and Rules
    Concerning Changing Long Distance Carriers*, 7 FCC Rcd 1038 (1992)
    (*PIC Change Order*), recon. denied, 8 FCC Rcd 3215 (1993);
    *Investigation of Access and Divestiture Related Tariffs, 101 FCC 2d
    911 (1985) (Allocation Order), Investigation of Access and
    Divestiture Related Tariffs*, 101 FCC 2d 935 (Com Car. Bur. 1985)
    (*Waiver Order*), recon. (of both *Allocation Order* and *Waiver
    Order*) denied, 102 FCC 2d 503 (1985) (*Reconsideration Order*).

[^5]: Slamming occurs when a company changes a subscriber's carrier
    selection without that subscriber's knowledge or explicit
    authorization.

[^6]: Section 503(b)(2)(B) provides for forfeitures up to \$100,000 for
    each violation or a maximum of \$1,000,000 for each continuing
    violation by common carriers or an applicant for any common carrier
    license, permit, certificate or similar instrument. 47 U.S.C. §
    503(b)(2)(B). We note that the Debt Collection Improvement Act of
    1996 (DCIA), Pub L. No. 104-134, § 31001, 110 Stat. 1321 (1996),
    requires that civil monetary penalties assessed by the federal
    government be adjusted for inflation based on the formula outlined
    in the DCIA. Thus, the statutory maxima pursuant to section
    503(b)(2)(B) increased from \$100,000 and \$1,000,000 to \$110,000
    and \$1,100,000 respectively. *Amendment of Section 1.80 of the
    Commission\'s Rules*, 12 FCC Rcd 1038 (1997).

[^7]: During a period between June 1998 and May 1999, the Commission's
    Common Carrier Bureau Consumer Protection Branch processed 306
    written consumer complaints alleging that LLD had slammed their
    preferred carrier.

[^8]: In further support of their complaints, each complainant submitted
    a declaration to the Common Carrier Bureau's Enforcement Division.

[^9]: *See, e.g.,* Advance Mortgage Corporation, Notice of Informal
    Complaint No. IC-98-39935 (November, 12, 1998). *Also see* 47 C.F.R.
    §§ 1.711-1.718 (regarding the Commission\'s procedures for
    processing informal complaints filed against carriers).

[^10]: *See, e.g.,* LLD Response to Notice of Informal Complaint No
    IC-98-39935 (November 30, 1998).

[^11]: *Id.*

[^12]: *See, e.g.,* Further Notice of Informal Complaint No. IC-99-01674
    (April 21, 1999) (Further Notice of Jeffrey Animal Hospital
    Complaint).

[^13]: *Id.*

[^14]: *See* Sales Script at Appendix B.

[^15]: *See, e.g.*, LLD Response to Notice of Informal Complaint No
    IC-99-01511 (December 15, 1998) (LLD Response to Fantasy Custom
    Yachts Complaint) at 2.

[^16]: *See* Sales Script at Appendix B.

[^17]: *Id.*

[^18]: According to LLD, Capitol Verification performed the third party
    verification service for the majority of its telemarketing
    solicitations. *See, e.g.*, Mark Nelson Werther, Informal Complaint
    No. IC-99-02995 (January 20, 1999) (in which Capitol Verification
    states that LLD has been its client since 1996 and during that time
    "have verified several hundred thousand long distance accounts for
    them.")

[^19]: *See* Verification Script at Appendix C.

[^20]: As set forth *infra* at paragraph 21, the Commission\'s rules
    require interexchange carriers to follow certain telemarketing
    \"verification procedures\" to ensure that carriers obtain the
    requisite authority prior to changing a customer\'s long-distance
    carrier. Pursuant to these procedures, an interexchange carrier may,
    *inter alia*, choose to have an independent third party verify the
    subscriber\'s order. *See* 47 C.F.R. § 64.1100(c).

[^21]: *Id.*

[^22]: *Id.* We note that a transcript of one verification call
    illustrates the verifier's continued misrepresentation of the
    service. *See* Transcribed Verification Conversation at Appendix D.

[^23]: *See* Appendices C (LLD Verification Script) and D (Transcribed
    Verification Conversation).

[^24]: ^?^ *See, e.g.*, Mark Nelson Werther, Informal Complaint No.
    IC-99-02995 (January 20, 1999) (complainant alleges that a LLD
    telemarketer misrepresented that he was a Bell Atlantic operator and
    offered to "combine your local and long distance billings."); *See
    also* Accord Interests, Inc., Informal Complaint No. IC-99-03389
    (January 20, 1999) (complainant alleges that a LLD telemarketer
    misrepresented that she was affiliated with Pacific Bell and offered
    a bill consolidation service.)

[^25]: Advance Mortgage Corporation, Informal Complaint No. 98-39935
    (September 17, 1998) (Advance Mortgage Complaint).

[^26]: Advance Mortgage Complaint at 1; *Also See* Declaration of Sherry
    Johnson, IC-98-39935 (April 27, 1999) at 1 (Johnson Declaration).

[^27]: *Id.* at 1.

[^28]: Johnson Declaration at 1.

[^29]: *Id.* at 1

[^30]: Advance Mortgage Complaint at 1.

[^31]: *Id.* at 1.

[^32]: Notice of Informal Complaint No. IC-98-39935 (November 12, 1998).

[^33]: LLD Response to Notice of Informal Complaint No IC-98-39935
    (November 30, 1998) (LLD Response to Advance Mortgage Complaint).

[^34]: *Id.* at 2.

[^35]: Further Notice of Informal Complaint No. IC-98-39935 (April 21,
    1999) (Further Notice of Advance Mortgage Complaint).

[^36]: LLD Response to Further Notice of Informal Complaint No.
    IC-99-39935 (May 7, 1999) (Further LLD Response to Advance Mortgage
    Complaint). A copy of (1) the LLD sales script; (2) the verification
    script; and (3) a transcribed version of one consumer's conversation
    with the verifier is attached as Appendix B, C, and D, respectively.

[^37]: Further LLD Response to Advance Mortgage Complaint at 2.

[^38]: *See* Appendices B, C, & D.

[^39]: *See* Appendix D.

[^40]: Jeffrey Animal Hospital, Informal Complaint No. 99-01674
    (November 17, 1998) (Animal Hospital Complaint) at 1. *See also*
    Declaration of Patrick Lewis, IC 99-01674 (May 7, 1999) (Lewis
    Declaration).

[^41]: Animal Hospital Complaint at 1; Lewis Declaration at 1.

[^42]: Animal Hospital Complaint at 1; Lewis Declaration at 1.

[^43]: Animal Hospital Complaint at 1; Lewis Declaration at 1.

[^44]: Animal Hospital Complaint at 1-2.

[^45]: Animal Hospital Complaint at 1-2, Lewis Declaration at 1.

[^46]: Animal Hospital Complaint at 1-2, Lewis Declaration at 1.

[^47]: Animal Hospital Complaint at 1-2.

[^48]: *Id.*

[^49]: Animal Hospital Complaint at 2; Lewis Declaration at 1.

[^50]: Lewis Complaint at 2.

[^51]: *Id.*

[^52]: Lewis Complaint at 2; Lewis Declaration at 1.

[^53]: Lewis Complaint at 2; Lewis Declaration at 1; *also see*
    Declaration of Lori Peet at 1, IC 99-01674 (May 7, 1999) (Peet
    Declaration).

[^54]: Peet Declaration at 1.

[^55]: Lewis Declaration at 1. LLD provided this tape to Mr. Lewis after
    the Commission made a specific request that LLD provide further
    information.

[^56]: Notice of Informal Complaint No. IC-98-01674 (December 14, 1998).

[^57]: LLD Response to Notice of Informal Complaint No. IC-98-01674
    (March 4, 1999) at 1. (LLD Response to Animal Hospital Complaint).

[^58]: LLD Response to Animal Hospital Complaint at 2.

[^59]: *Id.*

[^60]: Further Notice of Informal Complaint No. IC-99-01674 (April 21,
    1999) (Further Notice of Animal Hospital Complaint).

[^61]: LLD Response to Further Notice of Informal Complaint No.
    IC-99-01674 (May 7, 1999) (Further LLD Response to Animal Hospital
    Complaint).

[^62]: *See* Appendices C and D.

[^63]: *See* LLD Sales Script at Appendix B.

[^64]: *Id.*

[^65]: Fantasy Custom Yachts, Informal Complaint No. 99-01511 (October
    19, 1998) (Fantasy Complaint); a*lso see* Declaration of James
    Troxell, IC-99-01511 (May 15, 1999) at 1 (Troxell Declaration).

[^66]: Fantasy Complaint at 1; Troxell Declaration at 1.

[^67]: Fantasy Complaint at 1; Troxell Declaration at 1.

[^68]: Fantasy Complaint at 1.

[^69]: *Id*

    *.*

[^70]: Fantasy Complaint at 1; Troxell Declaration at 1.

[^71]: Fantasy Complaint at 1; Troxell Declaration at 1.

[^72]: Fantasy Complaint at 1; Troxell Declaration at 1.

[^73]: Troxell Declaration at 1.

[^74]: *Id.*

    *.*

[^75]: Fantasy Complaint at 1; Troxell Declaration at 1.

[^76]: Notice of Informal Complaint No. IC-99-01511 (November 30, 1998).

[^77]: LLD Response to Notice of Informal Complaint No IC-99-01511
    (December 15, 1998) (LLD Response to Fantasy Complaint) (In which
    LLD states that "among the services that Local Long Distance offers
    its customers is a consolidated billing option which allows
    subscribers to receive a single bill for local and long distance
    service.")

[^78]: *Id.*

[^79]: *Id.* at 2.

[^80]: *Id.*

[^81]: *Id.*

[^82]: Further Notice of Informal Complaint No. IC-99-01511 (April 21,
    1999) (Further Notice of Fantasy).

[^83]: LLD Response to Further Notice of Informal Complaint No.
    IC-99-01511 (May 7, 1999) (Further LLD Response to Fantasy).

[^84]: *Id.* at 2.

[^85]: *See* LLD Sales Script at Appendix B.

[^86]: LLD Further Response to Fantasy at 2-3; *also see* Troxell
    Declaration at 1.

[^87]: Troxell Declaration at 1.

[^88]: *Id.*

[^89]: *See* LLD Verification Script at Appendix C; *Compare with*
    Transcribed Verification Conversation at Appendix D.

[^90]: Pertinent information concerning these complaints and the
    responses thereto is set forth in Appendix A to this Order. We note
    that LLD\'s responses to the Consumer Protection Branch\'s initial
    Notices regarding the remaining complaints are similar to those
    submitted in response to the complaints described above. In each
    case, LLD filed brief letters containing boilerplate language
    stating that the customer\'s service was switched to LLD \"pursuant
    to a telemarketing order that was verified by an independent third
    party pursuant to 47 C.F.R. § 64.1100(c).\" Further, LLD\'s letters
    consistently stated that complainants\' accounts would be credited
    with the amount of any disputed long-distance charges, in an
    apparent attempt to resolve the informal complaints and terminate
    proceedings before the Commission.

[^91]: *See* Mark Nelson Werther AIA Complaint.

[^92]: *See, e.g.*, Quality Pacific; IC-99-04345 (Ms. Jackie Ends
    alleges that she discovered for the first time that her long
    distance service had been changed to LLD after reviewing her local
    telephone bill).

[^93]: *See* 47 U.S.C. § 258.

[^94]: The Commission\'s rules and orders clearly contemplate that
    changes to a customer\'s preferred carrier that do not involve a
    change in the customer\'s underlying facilities-based carrier, or to
    the customer\'s carrier identification code (CIC), are nonetheless
    subject to the Commission\'s authorization and verification rules.
    *See Section 258 Order* at paras. 145-146; *WATS International Corp.
    v. Group Long Distance (USA), Inc.*, 12 FCC Rcd 1743, 1752 (1997)
    (citing *PIC Change Recon. Order*, 8 FCC Rcd at 3218).

[^95]: *See* 47 U.S.C. § 258; 47 C.F.R. § 64.1100 (1997); *1997 FNPRM &
    Order on Recon*., 12 FCC Rcd 10674; *LOA Order*, 10 FCC Rcd 9560;
    *PIC Change Order*, 7 FCC Rcd 1038*; Allocation Order*, 101 FCC 2d
    911; *Waiver Order*, 101 FCC 2d 935.

[^96]: *See* Advance Mortgage Complaint at 1; Johnson Declaration at 1.

[^97]: ^?^ *See* Sales Script at Appendix B.

[^98]: *See, e.g.,* Sales Script at Appendix B, Transcribed Conversation
    at Appendix D.

[^99]: ^?^ *See* 47 U.S.C. § 258; 47 C.F.R. § 64.1150; 1998 *Second
    Order & FNPRM*, 14 FCC 1508 (1998); *1997 FNPRM & Order on
    Reconsideration*, 12 FCC Rcd 10674 (1997); *LOA Order*, 10 FCC Rcd
    9560 (1995), *stayed in part*, *In‑bound Stay Order*, 11 FCC Rcd 856
    (1995); *PIC Change Order*, 7 FCC Rcd 1038 (1992), *recon. denied*,
    8 FCC Rcd 3215 (1993); *Allocation Order*, 101 FCC 2d 911 (1985),
    *Waiver Order*, 101 FCC 2d 935 (Com. Car. Bur. 1985), *recon*. (of
    both *Allocation Order* and *Waiver Order*) *denied*, 102 FCC 2d 503
    (1985) (*Reconsideration Order*).

[^100]: ^?^ 47 U.S.C. § 201(b).

[^101]: In the *Business Discount Plan Notice of Apparent Liability*,
    for example we found that Business Discount Plan, Inc. (BDP)
    apparently willfully or repeatedly violated section 201(b) by
    employing unjust and unreasonable telemarketing practices, such as
    misrepresenting the nature of BDP's service offering. *See Business
    Discount Plan Inc.*, Notice of Apparent Liability, 14 FCC Rcd 340
    (1998) (*BDP NAL*). The Commission found BDP apparently liable for a
    forfeiture of \$40,000 for each instance that it engaged in an
    unjust and unreasonable telemarketing practice in violation of
    section 201(b) of the Act. *BDP NAL*, 14 FCC Rcd at 355.

[^102]: *See BDP NAL*, 14 FCC Rcd 340 (1998).

[^103]: ^?^ 47 U.S.C. § 503(b)(2)(B); 47 C.F.R. § 1.80. The Commission
    recently amended its rules by adding a new subsection to its
    monetary forfeiture provisions that incorporates the inflation
    adjustment requirements contained in the Debt Collection Improvement
    Act of 1996 (Pub. L. 104-134, Sec. 31001, 110 Stat. 1321), enacted
    on April 26, 1996. *See* *Amendment of Section 1.80 of the
    Commission\'s Rules*, 12 FCC Rcd 1038 (1997).

[^104]: ^?^ *See* 47 U.S.C. § 503(b)(2)(D).

[^105]: ^?^ *See Commission\'s Forfeiture Policy Statement and Amendment
    of Section 1.80 of the Rules to Incorporate the Forfeiture
    Guidelines*, Report and Order, 12 FCC Rcd 17087 (1997) (petitions
    for reconsideration pending) (*Forfeiture Policy Statement*).

[^106]: ^?^ *Id.*

[^107]: ^?^ *Id.* *See also* 47 U.S.C. § 503(b)(2)(D).

[^108]: ^?^ *Forfeiture Policy Statement,* 12 FCC Rcd at 17099.

[^109]: *See, e.g., Nationwide Long Distance, Inc. NAL*, 11 FCC Rcd at
    3089. The Commission has also emphasized on numerous occasions that
    the actions of a carrier's marketing agents do not relieve a carrier
    of its independent obligation to ensure compliance with the rules.
    Rather, under the Communications Act, the acts or omissions of an
    agent or other person acting for a common carrier are deemed to be
    the acts or omissions of the carrier itself. *See* 47 U.S.C. § 217;
    *see also Heartline Communications, Inc. NAL*, 11 FCC Rcd 18487,
    18494 (1996) (*Heartline Communications NAL*).

[^110]: *All American Telephone Company, Inc.*, Notice of Apparent
    Liability, 13 FCC Rcd 15040 (1998); *Brittan Communications
    International Corp.*, Notice of Apparent Liability, FCC No. 98-291,
    rel. Oct. 29, 1998; *Amer-I-Net Services Corp.*, Notice of Apparent
    Liability, FCC No. 98-285, rel. Oct. 30, 1998.

[^111]: ^?^ *Id.*

[^112]: *See* Appendices B, C, and D.

[^113]: We note that our action today differs from our decision in the
    BDP NAL to assess a forfeiture for violations of section 201(b).
    *BDP NAL,* 14 FCC Rcd 340. In that Order, however, we acknowledged
    that the unjust and unreasonable actions of a carrier may support a
    forfeiture of over \$40,000 for each unauthorized conversion of long
    distance service. *BDP NAL*, 14 FCC Rcd at 356. Here, we choose to
    assess a higher forfeiture amount based upon the Commission's
    prosecutorial discretion.

[^114]: ^?^ *See* 47 U.S.C. § 503(b)(4)(C); 47 C.F.R. § 1.80(f)(3).

[^115]: ^?^ *See* 47 U.S.C. § 218.

[^116]: ^?^ 47 U.S.C. §§ 201(b); 258.

[^117]: ^?^ *See* 47 C.F.R. § 64.1150; *1998 Second Order and FNPRM, 14
    FCC Rcd 1508; 1997 FNPRM & Order on Recon*., 12 FCC Rcd 10674; *LOA
    Order*, 10 FCC Rcd 9560; *PIC Change Order*, 7 FCC Rcd 1038*;
    Allocation Order*, 101 FCC 2d 911; *Waiver Order*, 101 FCC 2d 935.

[^118]: ^?^ The forfeiture amount should be paid by check or money order
    drawn to the order of the Federal Communications Commission.
    Reference should be made on Coleman Enterprises, Inc.\'s check or
    money order to \"NAL/Acct. No. 916EF0004.\" Such remittances must be
    mailed to Forfeiture Collection section, Finance Branch, Federal
    Communications Commission, P.O. Box. 73482, Chicago, Illinois
    60673-7482.