Source: http://transition.fcc.gov/eb/Orders/2015/DA-15-86A1.html
Timestamp: 2018-08-15 18:36:05
Document Index: 443410644

Matched Legal Cases: ['§ 3717', '§ 504', '§ 1', '§ 503', '§ 503', '§ 503']

Account No.: 201532170007
FRN: 0009756768
The Enforcement Bureau (Bureau) of the Federal Communications Commission (Commission) has entered into a Consent Decree to resolve its investigation into whether National Access Long Distance, Inc. (NALD) switched consumers' preferred long distance provider without authorization ("slamming") and charged consumers for services that they had not authorized ("cramming"). The Bureau reviewed numerous consumer complaints against this company in which the consumers alleged that NALD had either changed their preferred long distance carrier without their authorization or had charged them fees on their telephone bill for services without their authorization. Several complainants stated that they already had long distance service with an existing carrier and had no need of the additional long distance service for which NALD had charged them. Slamming and cramming are deceptive business practices and the Commission is committed to protecting consumers against such unjust and unreasonable acts. NALD admits that it engaged in slamming and cramming. To resolve this matter, NALD will pay a civil penalty of $216,000, implement a compliance plan, and file compliance reports with the Bureau for three years.
After reviewing the terms of the Consent Decree and evaluating the facts before us, we find that the public interest would be served by adopting the Consent Decree and terminating the referenced investigation regarding NALD's compliance with Sections 201(b) and 258 of the Communications Act of 1934, as amended (Act) and Section 64.1120 of the Commission's rules (Rules).
In the absence of material new evidence relating to this matter, we conclude that our investigation raises no substantial or material questions of fact as to whether NALD possesses the basic qualifications, including those related to character, to hold or obtain any Commission licenses or authorization.
IT IS FURTHER ORDERED that a copy of this Order and Consent Decree shall be sent by first class mail and certified mail, return receipt requested, to Lewis J. Paper, Pillsbury Winthrop Shaw Pittman LLP, 1200 Seventeenth Street, NW, Washington, DC 20036-3006, attorney for National Access Long Distance, Inc.
The Enforcement Bureau of the Federal Communications Commission, National Access Long Distance, Inc., and Back Office Support Systems, Inc., by their authorized representatives, hereby enter into this Consent Decree for the purpose of terminating the Bureau's investigation into potential violations by National Access Long Distance, Inc. of Sections 201(b) and 258 of the Communications Act of 1934, as amended, and Section 64.1120 of the Commission's rules.
* "Back Office Support Systems" or "BOSS" means Back Office Support Systems, Inc., its Affiliates, its predecessors-in-interest, its successors-in-interest, and any other entity that directly or indirectly offers or provides telecommunication services and that is directly or indirectly controlled by Martin J. Tibbitts, but solely with respect to services performed on behalf of NALD.
* "Bill" means a Consumer's invoice (paper, electronic, or other means) issued by the Consumer's local exchange carrier, NALD, or BOSS directly, or prepaid account, if applicable.
* "Consumer" means any Person to whom NALD provides service or otherwise engages to sell or attempts to sell services.
* "Consumer Complaint" means any complaint, inquiry, or other notification NALD and/or BOSS receives from a Consumer, a billing aggregator, a local exchange carrier, the Better Business Bureau, a state Attorney General, or a federal or state regulatory agency alleging that NALD has:
+ misrepresented in any respect the type, nature, provision, delivery, price, or any other thing related to any NALD product or service or the identity of the service provider during the marketing of any product or service.
* "Covered Personnel" means all employees, contractors, and agents of each of NALD and BOSS who perform, or supervise, oversee, or manage the performance of duties that relate to NALD's responsibilities under the Slamming Rules, Section 201(b) of the Act, and this Consent Decree, and includes customer service representatives, Sales Representatives, and Verifiers.
* "National Access Long Distance," "NALD," or "Company" means National Access Long Distance, Inc., its Affiliates, its predecessors-in-interest, and successors-in-interest, and any other entity that offers or provides telecommunications services that is directly or indirectly controlled by J. Eric Ross.
* "Operating Procedures" means the procedures and compliance policies established by NALD and BOSS to implement the Compliance Plan.
* "Parties" means NALD, BOSS, and the Bureau, each of which is a "Party."
* "Sales Representative" means each Person that NALD and/or BOSS engages as an employee, contractor, or otherwise to sell, or attempt to sell, any NALD service.
* "Verifier" means each Person whom NALD and/or BOSS engages to verify, or attempt to verify, that a Consumer has in fact authorized a carrier change to NALD.
NALD is a non-facilities-based interexchange carrier that, as a reseller, provides long distance service to Consumers. NALD contracts with BOSS for back office support, including management of customer acquisition (including supervision of the third-party verification process), processing of new sales, oversight of federal and state regulatory compliance, and oversight of federal and state tax matters. NALD and BOSS contract with Citadel Contact Systems, Inc. (CCS) for telemarketing services. BOSS and CCS are both located at 19992 Kelly Road, Harper Woods, Michigan 48225. BOSS and CCS are owned by Martin J. Tibbitts. Martin J. Tibbitts is the Chief Executive Officer and President of both BOSS and CCS. All correspondence from NALD in response to consumer complaints is from Alicia G. Treder, the BOSS regulatory and compliance manager.
During the course of its investigation, the Bureau reviewed numerous Consumer Complaints filed with the Commission, various state regulatory agencies, and the Better Business Bureau (BBB). The complaints allege that NALD charged Consumers for services that they had never authorized, or that it had switched a Consumer's preferred long distance provider without its, his, or her authorization. In some cases, complainants explained that they had no need for an additional long distance service because they already had long distance service with their existing carrier. As part of its investigation, the Bureau sent NALD the LOI directing NALD to provide Consumer Complaints and evidence of authorization for carrier changes, including third party verification (TPV) recordings. NALD submitted responses to the LOI which generally asserted that NALD had not instituted any Unauthorized Change or Unauthorized Charge.
The Bureau alleges that NALD violated:
Jurisdiction. NALD and BOSS (solely with respect to this Consent Decree) each agree that the Bureau, acting pursuant to delegated authority, has jurisdiction over them with respect to the matters contained in this Consent Decree, and has the authority to enter into and adopt this Consent Decree.
Admission of Liability. NALD admits, solely for the purpose of this Consent Decree, and in express reliance on the provisions of paragraph 12 herein terminating the Investigation, that, notwithstanding its asserted good faith efforts to comply with the Act and the Rules, some of its actions violated Sections 201(b) and 258 of the Act, and Sections 64.1120 of the Rules.
Termination of Investigation. In express reliance on the covenants and representations in this Consent Decree and to avoid further expenditure of public resources, the Bureau agrees to terminate its Investigation. In consideration for the termination of the Investigation, NALD and BOSS each agree to the terms, conditions, and procedures contained herein. The Bureau further agrees that absent new material evidence, it will not use the facts developed in the Investigation through the Effective Date (including any complaint based on a sale or the imposition of charges prior to the Effective Date, if such complaints were provided by NALD to the FCC or were otherwise filed with the FCC prior to the Effective Date), or the existence of this Consent Decree, to institute on its own motion any new proceeding, formal or informal, or to take any action on its own motion against NALD or BOSS concerning the matters that were the subject of the Investigation or with respect to NALD's basic qualifications, including its character qualifications, to be a Commission licensee or hold Commission authorizations.
General Prohibitions and Requirements. Each of NALD and BOSS shall:
* before submitting (or causing to be submitted) a request to change a Consumer's telecommunications service provider to NALD:
o obtain Express Informed Consent for such change, and NALD and BOSS shall retain a record of such Express Informed Consent for a period of three years from the date NALD or BOSS obtained such consent; and
* create a record of every telecommunications service provider change request that NALD or BOSS submits (or causes to be submitted), which includes the date NALD or BOSS submitted (or caused to be submitted) such request, together with a description of any terms and conditions associated with such change, and a copy of the written or electronic confirmation notice sent to the Consumer. NALD and BOSS shall retain a record of each such carrier change for a period of three years from the date NALD or BOSS submits (or causes to be submitted) a request for such carrier change. NALD and BOSS shall promptly provide all such records to the Bureau upon written request;
* require each Sales Representative and each Verifier to use a script approved by NALD and/or BOSS when carrying out his or her duties as a Sales Representative or Verifier. For a period of three years, NALD and BOSS shall routinely monitor a random sample of sales calls to verify that the Sales Representative is complying with this Consent Decree. If any such script is in a language other than English, NALD and/or BOSS shall provide an English translation of the script upon Commission request. The script for the Sales Representative shall require each Sales Representative:
- the purpose of the call is to inquire whether the Consumer is authorized to make a change to and wishes to change its, his, or her long distance, international, or other toll service from its, his, or her current telecommunications service provider to NALD.
Process for Resolving Consumer Complaints. With respect to any Consumer Complaint NALD or BOSS receives concerning an alleged Unauthorized Change, NALD and BOSS shall:
* all documents evidencing or relating to all Consumer Complaints, including NALD's and/or BOSS' response thereto; and
* all documents relating to Consumer Complaints involving alleged Unauthorized Charges for which NALD or BOSS demonstrated that the Consumer provided Express Informed Consent, and all refunds/credits NALD or BOSS provided the Consumer due to NALD's or BOSS' inability to provide proof of Express Informed Consent in response to such a claim by a Consumer.
Compliance Plan. For purposes of settling the matters set forth herein, NALD and BOSS each agree that, within thirty (30) days of the Effective Date, they shall develop and implement a Compliance Plan designed to ensure future compliance with the Communications Laws, including Sections 201(b) and 258 of the Act and Sections 64.1100 et seq. of the Rules, and with the terms and conditions of this Consent Decree. With respect to the Slamming Rules and requirements of Section 201(b), the following procedures, at a minimum, shall be implemented:
* Compliance Officer. Within thirty (30) days of the Effective Date, NALD and BOSS shall each designate a senior corporate manager with the requisite corporate and organizational authority to serve as a Compliance Officer and to discharge the duties set forth in this Consent Decree.
o The Person designated as the Compliance Officer shall be responsible for developing, implementing, and administering the Compliance Plan and ensuring that NALD and BOSS comply with the terms and conditions of the Compliance Plan and this Consent Decree, including the injunctive provisions.
* Operating Procedures. The Compliance Plan shall include Operating Procedures that the Compliance Officer and all Covered Personnel shall follow to ensure each of NALD's and BOSS' compliance with this Consent Decree, the Slamming Rules, and Section 201(b) of the Communications Act.
* Compliance Manual. Within thirty (30) days of the Effective Date, NALD and BOSS shall develop, use, and maintain a Compliance Manual for use by each party, and shall distribute the same to all Covered Personnel. For any Person who becomes a Covered Personnel more than thirty (30) days after the Effective Date, NALD and BOSS shall distribute the Compliance Manual to that Person within thirty (30) days after the date such Person becomes Covered Personnel, and prior to such Person engaging with Consumers with respect to NALD's or BOSS' services.
o The Compliance Manual shall set forth and explain the requirements of Section 201(b) of the Act, the Slamming Rules, and this Consent Decree, and shall instruct Covered Personnel to consult and follow the Operating Procedures to ensure NALD's and BOSS' compliance with the Communications Laws and this Consent Decree.
o The Compliance Manual shall require Covered Personnel to contact their supervisor and/or the Compliance Officer with any questions or concerns that arise with respect to NALD's and/or BOSS' obligations under or compliance with the Communications Laws and this Consent Decree, and require any supervisor who receives such information from Covered Personnel to promptly notify the Compliance Officer.
o NALD and BOSS shall each periodically review and revise the Compliance Manual to ensure that the information set forth therein remains current and complete.
o NALD and BOSS shall (individually or collectively) distribute any revisions of the Compliance Manual to all Covered Personnel within thirty (30) days after any revisions have been made by NALD and/or BOSS.
* Compliance Training Program. Within thirty (30) days of the Effective Date, NALD and BOSS shall establish, implement, and maintain a Compliance Training Program to ensure compliance with Section 201(b) of the Act, the Slamming Rules, and this Consent Decree.
o As part of the Compliance Training Program, Covered Personnel shall be advised of NALD's and BOSS' obligations to report any noncompliance with Section 201(b) of the Act, the Slamming Rules, and this Consent Decree and shall be instructed on how to disclose noncompliance to the Compliance Officer.
o Beginning on the Effective Date, neither NALD nor BOSS shall allow any Covered Personnel to interact with any Consumer about NALD's or BOSS' service until they have trained the Covered Personnel and provided a copy of the Compliance Manual to such Covered Personnel.
o NALD and BOSS shall conduct the Compliance Training Program at least annually and shall periodically review and revise the Compliance Training Program as necessary to ensure that it remains current and complete and to enhance its effectiveness.
Reporting Noncompliance to the Bureau. Each of NALD and BOSS (collectively or individually) shall report any noncompliance with Sections 201(b) and 258 of the Act, the Slamming Rules, or with the terms and conditions of this Consent Decree within fifteen (15) days after discovery of such noncompliance.
o the steps that each of NALD and BOSS has taken or will take to remedy such non-compliance;
o the steps that each of NALD and BOSS has taken or will take to prevent the recurrence of any such non-compliance.
Periodic Compliance Reports. NALD and BOSS (collectively or individually) shall file Compliance Reports with the Bureau three, six, twelve, eighteen, twenty-four, thirty, and thirty-six months after the Effective Date.
* Each Compliance Report shall include a detailed description of each of NALD's and BOSS's efforts during the relevant period (beginning on the Effective Date, and continuing through to the filing date of each report) to comply with the terms of the Consent Decree, Sections 201(b) and 258 of the Act, and the Slamming Rules.
* Each Compliance Report shall also include a detailed description of any new or additional telecommunications companies owned, in whole or in part, by any of the present or past owners, shareholders, officers, or directors of NALD and BOSS. The Compliance Report shall also include a description of any additional companies that provide management or telemarketing services for NALD.
* Each Compliance Report shall include a certification by the Compliance Officer, as an agent of and on behalf of each of NALD and BOSS, stating that the Compliance Officer has personal knowledge that NALD and BOSS:
* If the Compliance Officer cannot provide the requisite certification, the Compliance Officer, as an agent of and on behalf of NALD and BOSS, shall provide the Commission with a detailed explanation of the reason(s) why and describe fully:
o the steps each of NALD and BOSS has taken or will take to remedy such non-compliance, including the schedule on which the proposed remedial actions will be taken; and
o the steps that each of NALD and BOSS has taken or will take to prevent the recurrence of any such non-compliance, including the schedule on which such preventive action will be taken.
Section 208 Complaints; Subsequent Investigations. Nothing in this Consent Decree shall prevent the Commission or its delegated authority from adjudicating complaints filed pursuant to Section 208 of the Act against BOSS, NALD, or their affiliates for alleged violations of the Act, or for any other type of alleged misconduct, regardless of when such misconduct took place. The Commission's adjudication of any such complaint will be based solely on the record developed in that proceeding. Except as expressly provided in this Consent Decree, this Consent Decree shall not prevent the Commission from investigating new evidence of noncompliance by NALD with the Communications Laws.
Civil Penalty. NALD agrees to pay a civil penalty to the United States Treasury of two hundred sixteen thousand dollars ($216,000), such payment to be made in twelve (12) monthly installments (each an Installment Payment). The first Installment Payment of eighteen thousand dollars ($18,000) shall be made no later than thirty (30) calendar days after the Effective Date. Each subsequent Installment Payment shall be in the amount of eighteen thousand dollars ($18,000) and shall be payable on the first business day of each month beginning with the third month following the Effective Date. The twelfth and last Installment Payment shall be made no later than the thirteenth month after the Effective Date. NALD and BOSS acknowledge and agree that upon execution of this Consent Decree, the payment of the two hundred sixteen thousand dollars ($216,000) shall become a "Claim" or "Debt" as defined in the DCIA. Upon an Event of Default by nonpayment (as described below in paragraph 21), BOSS shall pay the full amount of the remaining outstanding balance of the civil penalty in one lump-sum payment within ten days of written notice from the Bureau that an Event of Default by nonpayment has occurred and demand for payment. NALD shall remain jointly and severally liable with BOSS for full payment of the civil penalty until such penalty is paid in full by either NALD or BOSS pursuant to the terms this Consent Decree. BOSS agrees to pay the outstanding amount of the civil penalty upon an Event of Default without regard to the reason for the Event of Default and agrees to waive, and hereby waives, any and all legal and equitable defenses that it might otherwise have or could assert in connection with or related to its liability to pay the civil penalty as set out above. In addition to the above, all procedures for collection as permitted by law may, at the Commission's discretion, be initiated against NALD and BOSS. NALD agrees, and BOSS agrees in any case where an Event of Default by nonpayment has occurred, that they will make the payments in United States Dollars without further demand or notice within the timeframe specified above. NALD, and BOSS in any case where an Event of Default by nonpayment has occurred, shall also send electronic notification of payment on the date such payment is made to Johnny Drake, Telecommunications Consumers Division, Enforcement Bureau, Federal Communications Commission at Johnny.Drake@fcc.gov [HYPERLINK: mailto:Johnny.Drake@fcc.gov]. The payment must be made by check or similar instrument, wire transfer, or credit card, and must include the Account Number and FRN referenced in the caption of the Adopting Order. Regardless of the form of payment, a completed FCC Form 159 (Remittance Advice) must be submitted. When completing the FCC Form 159, NALD shall enter the Account Number in block number 23A (call sign/other ID) and enter the letters "FORF" in block number 24A (payment type code). Below are additional instructions NALD must follow based on the form of payment selected.
Event of Default; Interest, Charges for Collection and Acceleration of Maturity Date. NALD and BOSS agree that an Event of Default by nonpayment shall occur upon the failure of NALD to make any Installment Payment to the U.S. Treasury on or before the due date specified in paragraph 20. Upon an Event of Default, without further notice, demand, or presentment, all procedures for collection permitted by the Debt Collection Improvement Act of 1996 and other provisions of law may, at the Commission's discretion, be initiated and (1) the then entire civil penalty amount, which shall accrue interest at a rate of the U.S. Prime Rate in effect on the date of the Event of Default plus 4.75 percent per annum from the date of the Event of Default until payment in full; and (2) any penalties permitted and/or required by the law, including but not limited to 31 U.S.C. § 3717; and (3) any administrative charge(s), including the costs of collection, litigation, and attorneys' fees, are accelerated and shall become immediately due and payable, without notice, presentment, demand, protest, or notice of protest of any kind, all of which are waived by NALD and BOSS.
Waivers. NALD and BOSS waive any and all rights they may have to seek administrative or judicial reconsideration, review, appeal, or stay, or to otherwise challenge or contest the validity of this Consent Decree and the Adopting Order, provided the Bureau issues an Adopting Order as defined herein. If any Party (or the United States on behalf of the Commission) brings a judicial action to enforce the terms of the Adopting Order or Consent Decree, NALD, BOSS, and the Bureau agree that they shall not contest the validity of the Consent Decree or the Adopting Order, and NALD and BOSS shall waive any statutory right to a trial de novo. NALD and BOSS each hereby agree to waive any claims they may otherwise have under the Equal Access to Justice Act, 5 U.S.C. § 504 and 47 C.F.R. § 1.1501 et seq., relating to the matters addressed in this Consent Decree. By its signature below, BOSS waives any right to receive a citation pursuant to Section 503(b)(5) of the Act (47 U.S.C. § 503(b)(5)) prior to the Commission taking enforcement action under Section 503 of the Act (47 U.S.C. § 503), and hereby acknowledges and agrees that this Consent Decree and accompanying Adopting Order satisfy the requirements of Section 503(b)(5) of the Act (47 U.S.C. § 503(b)(5)) in the event of a violation by BOSS of this Consent Decree.
Subsequent Rule or Order. The Parties agree that if any provision of this Consent Decree conflicts with any subsequent Rule or order adopted by the Commission (except a Rule or an order specifically intended to revise the terms of this Consent Decree to which NALD or BOSS, as applicable, does not expressly consent), such provision will be superseded by such Rule or Commission order.
Acts or Omissions of Contractors and Agents. NALD and BOSS each acknowledge that the act, failure to act, or omission by any contractor, subcontractor, or agent of NALD or BOSS, acting in such capacity, that results in a violation of the Act, Rules, or this Consent Decree constitutes an act, failure to act, or omission by NALD or BOSS, as applicable.
Successors and Assigns. NALD and BOSS agree that the provisions of this Consent Decree shall be binding on their successors, assigns, and transferees.
Authorized Representative. The individuals signing this Consent Decree on behalf of NALD and BOSS represent and warrant that they are authorized by NALD and BOSS respectively to execute this Consent Decree and to bind NALD and BOSS respectively to the obligations set forth herein applicable to each of NALD and/or BOSS. The FCC signatory represents that he is signing this Consent Decree in his official capacity and that he is authorized to execute this Consent Decree.
For: National Access Long Distance, Inc.
J. Eric Ross, President