HB 4576 Text

H. B. 4576

(By Delegates Staton, Fox, Webster, Hrutkay,
Browning, Stalnaker and Perry)

[Introduced February 21, 2002; referred to the
Committee on the Judiciary.]

A BILL to amend and reenact article two-E, chapter twenty-four of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to requirements for phone service sales; providing certain definitions; providing for certain verification and authorization requirements to change phone service providers; providing for a letter of agency to act on behalf of a subscriber; establishing a phone carrier's liability for changing a phone service provider without authorization; establishing certain procedures to resolve unauthorized changes in a phone service carrier and resulting charges; requiring phone service providers to submit certain unauthorized phone service change reports to the public service commission; establishing a prohibition by phone service providers from changing certain phone services without express consent; and establishing the authority of the public service commission to administrate and enforce the provisions of this article.

Be it enacted by the Legislature of West Virginia:

That article two-E, chapter twenty-four of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted to read as follows:
ARTICLE 2E. REQUIREMENTS FOR PHONE SERVICE SALES
24-2E-1. Definitions.

For purposes of this article:

(a) "Authorized carrier" means any telecommunications carrier that submits a change, on behalf of a subscriber, in the subscriber's selection of a provider of telecommunications service with the subscriber's authorization verified in accordance with the procedures specified in this article.

(b) "Executing carrier" means any telecommunications carrier that effects a request that a subscriber's telecommunications carrier be changed. A carrier may be treated as an executing carrier, however, if it is responsible for any unreasonable delays in the execution of carrier changes or for the execution of unauthorized carrier changes, including fraudulent authorizations.

(c) "Local exchange carrier" means any person that is engaged in the provision of telephone exchange service or exchange access.

(d) "Slamming" means the practice of changing a subscriber's telephone service without permission.

(e) "Submitting carrier" means any telecommunications carrier that requests on the behalf of a subscriber that the subscriber's telecommunications carrier be changed, and seeks to provide retail services to the end user subscriber. A carrier may be treated as a submitting carrier, however, if it is responsible for any unreasonable delays in the submission of carrier change requests or for the submission of unauthorized carrier change requests, including fraudulent authorizations.

(f) "Subscriber" means any one of the following:

(1) The party identified in the account records of a common carrier as responsible for payment of the telephone bill;

(2) Any adult person authorized by such party to change telecommunications services or to charge services to the account; or

(3) Any person contractually or otherwise lawfully authorized to represent such party.

(g) "Telecommunications carrier" means a public utility providing telephone service.

(h) "Unauthorized carrier" means any telecommunications carrier that submits a change, on behalf of a subscriber, in the subscriber's selection of a provider of telecommunications service but fails to obtain the subscriber's authorization verified in accordance with the procedures specified in this article.

(i) "Unauthorized change" means a change in a subscriber's selection of a provider of telecommunications service that was made without authorization verified in accordance with the verification procedures specified in this article.
§24-2E-2.Verification of orders for telecommunications service.

(a) No telecommunications carrier shall submit or execute a change on the behalf of a subscriber in the subscriber's selection of a provider of telecommunications service except in accordance with the procedures prescribed in this section.

(1) No submitting carrier shall submit a change on the behalf of a subscriber in the subscriber's selection of a provider of telecommunications service prior to obtaining:

(A) Authorization from the subscriber, and

(B) Verification of that authorization in accordance with the procedures prescribed in this section. The submitting carrier shall maintain and preserve records of verification of subscriber authorization for a minimum period of two years after obtaining such verification.

(2) An executing carrier shall not verify the submission of a change in a subscriber's selection of a provider of telecommunications service received from a submitting carrier. For an executing carrier, compliance with the procedures described in this article shall be defined as prompt execution, without any unreasonable delay, of changes that have been verified by a submitting carrier.

(3) Commercial mobile radio service providers shall be excluded from the verification requirements of this article as long as they are not required to provide equal access to common carriers for the provision of telephone toll services under federal law.

(b) Where a telecommunications carrier is selling more than one type of telecommunications service, such as local exchange, intraLATA/intrastate toll and interLATA/intrastate toll, that carrier must obtain separate authorization from the subscriber for each service sold, although the authorizations may be made within the same solicitation. Each authorization must be verified separately from any other authorizations obtained in the same solicitation. Each authorization must be verified in accordance with the verification procedures prescribed in this section.

(c) No telecommunications carrier shall submit a preferred carrier change order unless and until the order has been confirmed in accordance with one of the following procedures:

(1) The telecommunications carrier has obtained the subscriber's written or electronically signed authorization in a form that meets the requirements of section three of this article; or

(2) The telecommunications carrier has obtained the subscriber's electronic authorization to submit the preferred carrier change order. Such authorization must be placed from the telephone number on which the preferred carrier is to be changed and must confirm the information in subdivision one of subsection (a) of this section. Telecommunications carriers electing to confirm sales electronically shall establish one or more toll-free telephone numbers exclusively for that purpose. Calls to those numbers may connect a subscriber to a voice response unit, or similar mechanism, that records the required information regarding the preferred carrier change, including automatically recording the originating automatic number identification; or

(3) An appropriately qualified independent third-party has obtained, in accordance with the procedures set forth in this subdivision, the subscriber's oral authorization to submit the preferred carrier change order that confirms and includes appropriate verification data, such as the subscriber's date of birth or social security number. The independent third-party must not be owned, managed controlled, or directed by the carrier or the carrier's marketing agent; must not have any financial incentive to confirm preferred carrier change orders for the carrier or the carrier's marketing agent; and must operate in a location physically separate from the carrier or the carrier's marketing agent.

(A) Automated third-party verification systems and three-way conference calls may be used for verification purposes so long as the requirements of subdivision three, subsection (c) of this section are satisfied.

(B) A carrier or a carrier's sales representative initiating a three-way conference call or a call through an automated verification system must drop off the call once the three-way connection has been established.

(C) All third party verification methods shall elicit, at a minimum, the identity of the subscriber, confirmation that the person on the call is authorized to make the carrier change, confirmation that the person on the call wants to make the carrier change, the names of the carriers affected by the change, the telephone numbers to be switched, and the types of service involved. Third-party verifiers may not market the carrier's services by providing additional information, including information regarding preferred carrier freeze procedures.

(D) All third-party verifications shall be conducted in the same language that was used in the underlying sales transaction and shall be recorded in their entirety. In accordance with the procedures set forth in this article, submitting carriers shall maintain and preserve audio records of verification of subscriber authorization for a minimum period of two years after obtaining such verification. Automated systems must provide consumers with an option to speak with a live person at any time during the call.

(d) Telecommunications carriers must provide subscribers the option of using one of the authorization and verification procedures specified in this section in addition to an electronically signed authorization and verification procedure.

(e) A telecommunications carrier may acquire, through a sale or transfer, either part or all of another telecommunications carrier's subscriber base without obtaining each subscriber's authorization and verification in accordance with section four of this article: Provided, that the acquiring carrier complies with all Federal Communications Commission rules regarding advance subscriber notice.
§24-2E-3. Letter of agency.

(a) A telecommunications carrier may use a written or electronically signed letter of agency to obtain authorization or verification of a subscriber's request to change his or her preferred carrier selection. A letter of agency that does not conform with this section is invalid for purposes of this article.

(b) The letter of agency shall be a document that is separate, or easily separable, from other written documents regarding a change in carrier or located on a separate screen or webpage containing only the authorizing language described in subsection (e) of this section having the sole purpose of authorizing a telecommunications carrier to initiate a preferred carrier change. The letter of agency must be signed and dated by the subscriber to the telephone line requesting the preferred carrier change.

(d) Notwithstanding subsections (b) and (c) of this section, the letter of agency may be combined with checks that contain only the required letter of agency language as prescribed in subsection (e) of this section and the necessary information to make the check a negotiable instrument. The letter of agency check shall not contain any promotional language or material. The letter of agency check shall contain in easily readable, bold-face type on the front of the check, a notice that the subscriber is authorizing a preferred carrier change by signing the check. The letter of agency language shall be placed near the signature line on the back of the check.

(e) At a minimum, the letter of agency must be printed with a type of sufficient size and readable type to be clearly legible and must contain clear and unambiguous language that confirms:

(1) The subscriber's billing name and address and each telephone number to be covered by the preferred carrier change order;

(2) The decision to change the preferred carrier from the current telecommunications carrier to the soliciting telecommunications carrier;

(3) That the subscriber designates the submitting carrier to act as the subscriber's agent for the preferred carrier change;

(4) That the subscriber understands that only one telecommunications carrier may be designated as the subscriber's interLATA preferred interexchange carrier for any one telephone number. For the selection of additional preferred carriers, such as local exchange, intraLATA/intrastate toll or interLATA/intrastate toll, the letter of agency must contain separate statements regarding those choices, although a separate letter of agency for each choice is not necessary; and

(5) That the subscriber may consult with the carrier as to whether a fee will apply to the change in the subscriber's preferred carrier.

(f) Any carrier designated in a letter of agency as a preferred carrier must be the carrier directly setting the rates for the subscriber.

(g) Letters of agency shall not suggest or require that a subscriber take some action in order to retain the subscriber's current telecommunications carrier.

(h) If any portion of a letter of agency is translated into another language then all portions of the letter of agency must be translated into that language. Every letter of agency must be translated into the same language as any promotional materials, oral descriptions or instructions provided with the letter of agency.

(i) Letters of agency submitted with an electronically signed authorization must include the consumer disclosures required by federal law.

(j) A telecommunications carrier shall submit a preferred carrier change order on behalf of a subscriber within no more than sixty days of obtaining a written or electronically signed letter of agency.
§24-2E-4. Carrier liability for slamming.

(a) Any submitting telecommunications carrier that fails to comply with the procedures prescribed in this article shall be liable to the subscriber's properly authorized carrier in an amount equal to one hundred fifty percent of all charges paid to the submitting telecommunications carrier by such subscriber after such violation, as well as for any additional amounts provided for in section seven of this article. The remedies provided in this article are in addition to any other remedies available by law.

(b) Any subscriber whose selection of telecommunications services provider is changed without authorization verified in accordance with procedures set for in this article is liable for charges as follows:

(1) If the subscriber has not already paid charges to the unauthorized carrier, the subscriber is absolved of liability for charges imposed by the unauthorized carrier for service provided during the first thirty days after the unauthorized change. Upon being informed by a subscriber that an unauthorized change has occurred, the authorized carrier, the unauthorized carrier, or the executing carrier shall inform the subscriber of this thirty-day absolution period. Any charges imposed by the unauthorized carrier on the subscriber for service provided after this thirty-day period shall be paid by the subscriber to the authorized carrier at the rates the subscriber was paying to the authorized carrier at the time of the unauthorized change in accordance with the provisions of section six-e of this article.

(2) If the subscriber has already paid charges to the unauthorized carrier, and the authorized carrier receives payment from the unauthorized carrier as provided for in subsection (a) of this section, the authorized carrier shall refund or credit to the subscriber any amounts determined in accordance with the provisions of section seven-c of this article.

(3) If the subscriber has been absolved of liability as prescribed by this section, the unauthorized carrier shall also be liable to the subscriber for any charge required to return the subscriber to his or her properly authorized carrier, if applicable.

(e) Nothing in this article shall be construed to impose any liability on a local exchange carrier who executes, in good faith, an order for a change in a subscriber's telephone service provider submitted to it by the subscriber or by a submitting carrier, who otherwise attempts to comply in good faith with the obligations of an executing carrier under this article, or who in good faith offers a preferred carrier freeze to a subscriber.
§24-2E-5.Procedure for resolution of unauthorized changes in preferred carrier.

(a) Executing carriers who are informed of an unauthorized carrier change by a subscriber shall immediately notify both the authorized and allegedly unauthorized carrier of the incident. This notification must include the identity of both carriers.

(b) Any carrier, executing, authorized, or allegedly unauthorized, that is informed by a subscriber or an executing carrier of an unauthorized carrier change shall direct that subscriber to the public service commission for resolution of the complaint.

(c) Upon receipt of an unauthorized carrier change complaint, the public service commission shall notify the alleged unauthorized carrier of the complaint and order that the carrier remove all unpaid charges for the first thirty days after the slam from the subscriber's bill pending a determination of whether an unauthorized change has occurred, if it has not already done so.

(d) Not more than thirty days after notification of the complaint, or such lesser time as is required by the public service commission, the alleged unauthorized carrier shall provide to the public service commission a copy of any valid proof of verification of the carrier change. This proof of verification must contain clear and convincing evidence of a valid authorized carrier change. The public service commission has the authority to determine whether an unauthorized change has occurred using such proof and any evidence supplied by the subscriber. Failure by the carrier to respond or provide proof of verification is presumed to be clear and convincing evidence of a violation.

(e) The public service commission may not adjudicate a complaint filed pursuant to this article involving an alleged unauthorized change while a complaint based on the same set of facts is pending with the Federal Communications Commission, unless the Federal Communications Commission has deferred to the public service commission on the matter.
§24-2E-6. Absolution procedures where the subscriber has not paid charges.

(a) This section shall only apply after a subscriber has determined that an unauthorized change has occurred and the subscriber has not paid charges to the allegedly unauthorized carrier for service provided for thirty days, or a portion thereof, after the unauthorized change occurred.

(b) An allegedly unauthorized carrier shall remove all charges incurred for service provided during the first thirty days after the alleged unauthorized change occurred from a subscriber's bill upon notification that such unauthorized change is alleged to have occurred.

(c) An allegedly unauthorized carrier may challenge a subscriber's allegation that an unauthorized change occurred. An allegedly unauthorized carrier choosing to challenge such allegation shall immediately notify the complaining subscriber that the complaining subscriber must file a complaint with the public service commission within thirty days of either, the date of removal of charges from the complaining subscriber's bill in accordance with subsection (b) of this section, or the date the allegedly unauthorized carrier notifies the complaining subscriber of the requirements of this section, whichever is later, and a failure to file such a complaint within this thirty-day period will result in the charges removed pursuant to subsection (b) of this section being reinstated on the subscriber's bill and, consequently, the complaining subscribers will only be entitled to remedies for the alleged unauthorized change other than those provided for in section four of this article. No allegedly unauthorized carrier shall reinstate charges to a subscriber's bill pursuant to the provisions of this subsection without first providing such subscriber with a reasonable opportunity to demonstrate that the requisite complaint was timely filed within the thirty day period described in this subsection.

(d) If the public service commission determines after reasonable investigation, that an unauthorized change has occurred, it has the authority to issue an order providing that the subscriber is entitled to absolution from the charges incurred during the first thirty days after the unauthorized carrier change occurred, and neither the authorized or unauthorized carrier may pursue any collection against the subscriber for those charges.

(e) If the subscriber has incurred charges for more than thirty days after the unauthorized carrier change, the unauthorized carrier must forward the billing information for such services to the authorized carrier, which may bill the subscriber for such services using either of the following means:

(1) The amount of the charge may be determined by a re-rating of the services provided based on what the authorized carrier would have charged the subscriber for the same services had an unauthorized change not occurred; or

(2) The amount of the charge may be determined using a fifty percent proxy rate. Upon receipt of billing information from the unauthorized carrier, the authorized carrier may bill the subscriber for fifty percent of the rate the unauthorized carrier would have charged the subscriber for the services provided. However, the subscriber shall have the right to reject use of this fifty percent proxy method and require that the authorized carrier perform a re-rating of the services provided, as described in subdivision one of subsection (e) of this section.

(f) If the authorized carrier received payment from the subscriber for services provided after the first thirty days after the unauthorized change occurred, the obligations for payments and refunds provided for in section seven of this article shall apply to those payments. If the public service commission determines after reasonable investigation that the carrier change was authorized, the carrier may re-bill the subscriber for charges incurred.
§24-2E-7.Reimbursement procedures where the subscriber has paid charges.

(a) The procedures in this section shall only apply after a subscriber has determined that an unauthorized change has occurred and the subscriber has paid charges to an allegedly unauthorized carrier.

(b) If the public service commission determines after reasonable investigation that an unauthorized change has occurred, it has the authority, in addition to any other authority to grant remedies, to issue an order directing the unauthorized carrier to forward to the authorized carrier the following:

(1) An amount equal to one hundred fifty percent of all charges paid by the subscriber to the unauthorized carrier; and

(2) Copies of any telephone bills issued from the unauthorized carrier to the subscriber. This order shall be sent to the subscriber, the unauthorized carrier, and the authorized carrier.

(c) Within ten days of receipt of the amount provided for in subdivision one of subsection (b) of this section, the authorized carrier shall provide a refund or credit to the subscriber in the amount of fifty percent of all charges paid by the subscriber to the unauthorized carrier. The subscriber has the option of asking the authorized carrier to re-rate the unauthorized carrier's charges based on the rates of the authorized carrier and, on behalf of the subscriber, seek an additional refund from the unauthorized carrier, to the extent that the re-rated amount exceeds the fifty percent of all charges paid by the subscriber to the unauthorized carrier. The authorized carrier shall also send notice to the public service commission that it has given a refund or credit to the subscriber.

(d) If an authorized carrier incurs billing and collection expenses in collecting charges from the unauthorized carrier, the unauthorized carrier shall reimburse the authorized carrier for reasonable expenses.

(e) If the authorized carrier has not received payment from the unauthorized carrier as required by subsection (c) of this section, the authorized carrier is not required to provide any refund or credit to the subscriber. The authorized carrier shall, within forty-five days of receipt of an order as described in subsection (b) of this section, inform the subscriber and the public service commission if the unauthorized carrier has failed to forward to it the appropriate charges, and also inform the subscriber of his or her right to pursue a claim against the unauthorized carrier for a refund of all charges paid to the unauthorized carrier.

(f) Where possible, the properly authorized carrier must reinstate the subscriber in any premium program in which that subscriber was enrolled prior to the unauthorized change, if the subscriber's participation in that program was terminated because of the unauthorized change. If the subscriber has paid charges to the unauthorized carrier, the properly authorized carrier shall also provide or restore to the subscriber any premiums to which the subscriber would have been entitled had the unauthorized change not occurred. The authorized carrier must comply with the requirements of this section regardless of whether it is able to recover from the unauthorized carrier any charges that were paid by the subscriber.
§24-2E-8. Reporting requirement.

Upon request of the public service commission, each provider of telephone exchange and/or telephone toll service shall submit to the public service commission a copy of any periodic slamming report submitted to the Federal Communications Commission.
§24-2E-9. Preferred carrier freezes.

(a) A preferred carrier freeze prevents a change in a subscriber's preferred carrier selection unless the subscriber gives his or her express consent to the carrier from whom the freeze was requested. All local exchange carriers who offer preferred carrier freezes shall comply with the provisions of this section.

(b) All local exchange carriers who offer preferred carrier freezes shall offer freezes on a nondiscriminatory basis to all subscribers, regardless of the subscriber's carrier selections.

(c) Preferred carrier freeze procedures, including any solicitation, must clearly distinguish among telecommunications services, such as local exchange, intraLATA/intrastate toll and interLATA/intrastate toll, subject to a preferred carrier freeze. The carrier offering the freeze must obtain separate authorization for each service for which a preferred carrier freeze is requested.

(d) Solicitation and imposition of preferred carrier freezes are governed as follows:

(1) All carrier-provided solicitation and other materials regarding preferred carrier freezes must include:

(A) An explanation, in clear and neutral language, of what a preferred carrier freeze is and what services may be subject to a freeze;

(B) A description of the specific procedures necessary to lift a preferred carrier freeze, an explanation that these steps are in addition to the verification rules in section two and three of this article for changing a subscriber's preferred carrier selections, and an explanation that the subscriber will be unable to make a change in carrier selection unless he or she lifts the freeze.

(2) No local exchange carrier shall implement a preferred carrier freeze unless the subscriber's request to impose a freeze has first been confirmed in accordance with one of the following procedures:

(A) The local exchange carrier has obtained the subscriber's written or electronically signed authorization in a form that meets the requirements of this article; or

(B) The local exchange carrier has obtained the subscriber's electronic authorization, placed from the telephone number on which the preferred carrier freeze is to be imposed, to impose a preferred carrier freeze. The electronic authorization should confirm appropriate verification data, such as the subscriber's date of birth or social security number, and the information required in this subdivision of subsection (d). Telecommunications carriers electing to confirm preferred carrier freeze orders electronically shall establish one or more toll-free telephone numbers exclusively for that purpose. Calls to the number will connect a subscriber to a voice responses unit, or similar mechanism that records the required information regarding the preferred carrier freeze request, including automatically recording the originating automatic numbering identification; or

(3) A local exchange carrier may accept a subscriber's written and signed authorization to impose a freeze on his or her preferred carrier selection. Written authorization that does not conform with this section is invalid and may not be used to impose a preferred carrier freeze.

(A) The written authorization shall comply with subsections (b), (c), and (h) of section three of this article concerning the form and content for letters of agency.

(B) At a minimum, the written authorization must be printed with a readable type of sufficient size to be clearly legible and must contain clear and unambiguous language that confirms;

(1) The subscriber's billing name and address and the telephone number to be covered by the preferred carrier freeze;

(2) The decision to place a preferred carrier freeze on the telephone number and particular service. To the extent that the public service commission allows the imposition of preferred carrier freezes on additional preferred carrier selections, such as for local exchange, intraLATA/intrastate toll and interLATA/intrastate toll service, the authorization must contain separate statements regarding the particular selections to be frozen;

(3) The subscriber understands that she or he will be unable to make a change in carrier selection unless she or he lifts the preferred carrier freeze; and

(4) The subscriber understands that any preferred carrier freeze may involve a charge to the subscriber.

(e) All local exchange carriers who offer preferred carrier freezes must, at a minimum, offer subscribers the following procedures for lifting a preferred carrier freeze:

(1) A local exchange carrier administering a preferred carrier freeze must accept a subscriber's written or electronically signed authorization stating his or her intent to lift a preferred carrier freeze; and

(2) A local exchange carrier administering a preferred carrier freeze must accept a subscriber's oral authorization stating her or his intent to lift a preferred carrier freeze and must offer a mechanism that allows a submitting carrier to conduct a three-way conference call with the carrier administering the freeze and the subscriber in order to lift a freeze. When engaged in oral authorization to lift a preferred carrier freeze, the carrier administering the freeze shall confirm appropriate verification data, such as the subscriber's date of birth or social security number, and the subscriber's intent to lift the particular freeze.
§24-2E-10.Authority of public service commission; interpretation.

The public service commission has the exclusive authority to administrate and to enforce the provisions of article, and the primary jurisdiction over any conduct that may violate this article.

NOTE: The purpose of this bill is strengthen the West Virginia Code provisions against unauthorized telephone service provider changes.

Article two-E of chapter twenty-four has been completely rewritten; therefore, strike-throughs and underscoring have been omitted.

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