Overview of the Ruling
On September 21, 2023, the Federal Communications Commission's Consumer and Governmental Affairs Bureau released an Order (DA 23-877) granting Informal Complaint No. 6437027 against Clear Rate Communications. The order addresses an unauthorized switch of a subscriber's telecommunications carrier, a practice known as slamming, which is prohibited under Section 258 of the Communications Act of 1934, as amended.
The Consumer Policy Division determined that Clear Rate failed to provide persuasive evidence to rebut allegations that it made material misrepresentations during a sales call to switch a business customer away from Verizon.
- Order DA Number: DA 23-877
- Complaint Number: 6437027
- Adopted Date: September 20, 2023
- Released Date: September 21, 2023
- Bureau: Consumer and Governmental Affairs Bureau, Consumer Policy Division
Complaint Allegations and Carrier Response
According to the complaint filed on September 1, 2023, a business customer that had used Verizon services for over thirty years received a telemarketing call. The complainant's receptionist was told Clear Rate could lower their bill because they were good customers. The receptionist was led to believe that Clear Rate was making the offer on behalf of Verizon and authorized a change under the assumption it would reduce monthly costs by at least $40. At the end of the call, the receptionist was informed that future bills would come from Clear Rate. When the subscriber contacted Verizon business services, Verizon advised that it does not outsource billing or customer service and suggested filing an FCC complaint.
Clear Rate responded to the complaint on September 8, 2023, stating that the complainant agreed to and authorized the carrier change, and that terms were outlined during a third-party verification (TPV) call. Clear Rate submitted two audio files: a TPV recording and a separate quality assurance recording. On the quality assurance recording, a Clear Rate representative stated that service would not be interrupted through a contract agreement between Verizon and Clear Rate, asserting that Clear Rate provides wholesale billing and customer service contracted by Verizon. Clear Rate did not provide a recording of the underlying sales call.
FCC Legal Analysis and Findings
Under 47 CFR § 64.1120(a)(1)(i)(A) and the Commission's 2018 Slamming Order, misrepresentations during sales calls invalidate consumer authorization to switch carriers, even if the carrier possesses a facially valid third-party verification recording. A credible allegation of misrepresentation shifts the evidentiary burden to the carrier to disprove the claim, typically through complete recordings of the sales interaction.
The Bureau determined that the complainant's allegations were credible and that Clear Rate failed to rebut them. Statements on Clear Rate's quality assurance call reinforced the misrepresentation that Clear Rate was contracted by Verizon. Consequently, the Bureau found the authorization invalid and concluded that an unauthorized carrier change occurred under FCC rules.
Remedies and Liability
Under 47 CFR §§ 64.1140, 64.1160, and 64.1170, the Commission outlined specific absolution remedies for the complainant:
The complainant is entitled to complete absolution from liability for any charges assessed by Clear Rate during the first thirty days following the unauthorized change. Clear Rate is prohibited from pursuing collections for that 30-day period. Any subsequent service charges beyond thirty days must be paid to the authorized carrier at the original authorized rates.
- Clear Rate must remove all charges incurred during the initial 30 days after the unauthorized switch.
- Neither Clear Rate nor the authorized carrier may pursue collection for the first 30 days of service charges.
- Charges after the 30-day period must be paid to the authorized carrier at its original rates.
- The complainant retains the right to file a formal complaint under 47 CFR § 1.721 within 45 days of the order's release.