FCC fines four long-distance service providers for 'slamming' and 'cramming' Hispanic customers.

The FCC Says This Phone-Service Scam Went After Customers With Hispanic-Sounding Names

The FCC Says This Phone-Service Scam Went After Customers With Hispanic-Sounding Names

Moneybox
A blog about business and economics.
Feb. 17 2016 5:25 PM

The FCC Says This Phone-Service Scam Went After Customers With Hispanic-Sounding Names

Trapped in the office talking on her phone
Every year, the Federal Communications Commission issues hefty fines against telecommunications companies that engage in “slamming” and “cramming,”

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Every year, the Federal Communications Commission issues hefty fines against telecommunications companies that engage in “slamming”—the act of changing a customer’s service without permission—and “cramming,” when a service provider adds unauthorized charges to a customer’s bill. These practices are infuriating for any customer. But a handful of recent alleged violations have any even nastier flavor than usual: The FCC wants to level more than $29 million in fines at four long-distance phone-service providers it accuses of targeting “consumers with Hispanic surnames.” The four companies, all related, have amassed more than 140 complaints against their practices in the past year.

How bad were the violations? According to the FCC, the companies “fabricated audio recordings that they then submitted to the FCC as ‘proof’ the consumers authorized these changes and charges.” In some cases, telemarketers allegedly posed as post office employees, inquiring about nonexistent package deliveries, to gather the information necessary to fake the authorization recordings. In other cases, the companies seemed to have straight-up impersonated the customers

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These kinds of tricks, however, are neither new nor limited to the likes of these four companies. In 2014, Sprint and AT&T mobility were charged upward of  $100 million for their complicity in cramming ploys. The discrimination against Latino customers goes back, too. As early as 2004, a Federal Trade Commission report on consumer fraud explains:

…although African Americans and American Indian or Alaska Natives have a significantly higher risk of being victims of frauds than non-Hispanic whites, the same is not true for their risk of being slammed. The only group that shows a significantly higher risk of being slammed is Hispanics.

The report goes on to suggest that Hispanic customers are more susceptible to slamming by unscrupulous service providers due to their perceived lack of proficiency with English. Data from that report did suggest that those Hispanics who spoke Spanish at home were more likely to be victims of slamming than Hispanics who did not. However, regardless of their actual proficiency with English, Hispanic customers on the whole were more likely than other customers to be victims of slamming schemes. They might also be targets because they’re perceived to be more likely to need long-distance service to communicate with family and friends abroad. And as the latest round of fines shows, this discrimination isn’t going away.