WorldCom Slammed for Slamming

Long-distance giant WorldCom will pay $3.5 million as part of an agreement with federal regulators to settle charges that it switched customers' telephone carriers without permission, the company said Tuesday.

The settlement with the nation's second largest long-distance carrier resolves an inquiry by the Federal Communications Commission into consumer complaints about the practice known as "slamming" -- changing customer's carriers without their permission.

The WorldCom settlement represents one of the largest enforcement actions in the FCC's history.

The complaint under investigation included allegations of deceptive action by sales representatives calling consumers to pitch their services.

Bernard J. Ebbers, WorldCom's chief executive officer and president, said the incidents highlighted by the FCC were perpetrated by a few sales employees who were terminated.

"Our zero tolerance policy for slamming is very real and we will take whatever steps necessary to prevent slamming from occurring," Ebbers said.

The company is making a voluntary payment of $3.5 million, which will go to the Treasury.

WorldCom also has agreed to bolster its consumer protection practices. It recently created a new 200-member team to focus on customer service issues.

FCC officials said it received 2,900 slamming complaints from consumers about WorldCom last year, making it the long-distance carrier with the most consumer complaints, the agency said.

Most of the calls concerned telemarketing, and the complaints came primarily from consumers and small businesses, officials said. For example, some consumers said they did not recognize the voice of the people who allegedly had approved the switch in their long-distance carrier. A third-party verifier typically keeps a tape to confirm that such a change has been authorized.

Under Tuesday's action, the company also has agreed to:

Establish a mandatory code of conduct for all phone sales representatives with a disciplinary system for violations.
• Create performance incentives to reward sales representatives based on the quality of their sales and to impose financial penalties for inappropriate sales conduct.
• Terminate immediately any sales representatives who intentionally deceive a customer.
• Enhance with additional audits the existing third-party verification system, used to ensure that customers have authorized a change in their service.