ASSEMBLY, No. 2442
STATE OF NEW JERSEY
INTRODUCED OCTOBER 21, 1996
By Assemblyman SULIGA
An Act concerning long-distance telecommunications service and supplementing P.L.1960, c.39 (C.56:8-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Long-distance telecommunications service constitutes a service within the term "merchandise" as defined in section 1 of P.L.1960, c.39 (C.56:8-1), and the provisions of P.L.1960, c.39 (C.56:8-1 et seq.) concerning the advertisement and sale of merchandise shall have the same application to the advertisement and sale of long-distance telecommunications service.
2. It shall be an unlawful practice for a person to advertise or sell a long-distance telecommunications service:
a. If a subscriber's written authorization for a change in primary interexchange carrier is integrated into the inducement to change primary interexchange carrier; or
b. In a manner that purports to instruct a subscriber that the subscriber must take some action in order to retain the subscriber's current interexchange carrier.
3. In addition to the penalties provided in P.L.1960, c.39 (C.56:8-1 et seq.), as amended and supplemented, a person who violates the provisions of section 2 of P.L.19 , c. (C. )(now before the Legislature as this bill), directly or through an agent, shall be subject to a penalty of $5,000 for each telephone line the subscriber to which changed primary interexchange carrier as a result of the unlawful practice. In addition, if a subscriber who changed primary interexchange carrier as a result of an unlawful practice was charged for long-distance services, three times the amount billed for those services shall be returned to the subscriber.
4. This act shall take effect immediately.
STATEMENT
This bill addresses the practice known as "slamming" where telephone subscribers are tricked into authorizing a change in their long-distance telecommunications carrier. Often, forms authorizing a change in long-distance carrier are disguised as a sweepstakes entry or a check; the consumer signs to enter the contest or cash the check unaware that they are authorizing the change in carrier. Frequently, the new carrier charges higher rates than the subscriber's previous carrier. "Slamming" is widespread and often targets elderly and non-English-speaking subscribers. The Federal Communications Commission received over 4,000 "slamming" complaints in a recent two-year period.
This bill would supplement the State's consumer fraud law, P.L.1960, c.39 (C.56:8-1), to include long-distance telecommunications services within the definition of "merchandise" as defined by the act, thereby subjecting the advertisement and sale of long-distance telecommunications service to the general provisions of that act. Violators would be subject to the penalties set forth in the consumer fraud law which may include a fine of no more than $7,500 for a first offense and no more than $15,000 for any subsequent offense. In addition, the Attorney General is authorized to seek and obtain in a summary action an injunction prohibiting any violator from continuing the unlawful practice.
Further, the bill specifies instances where the advertisement or sale of long-distance services would be deemed unlawful practices under the consumer fraud law: if a subscriber's written authorization for a change in primary interexchange carrier is integrated into the inducement to change primary interexchange carrier or if the advertisement purports to instruct a subscriber that the subscriber must take some action in order to retain the subscriber's current interexchange carrier. The bill provides additional penalties for these violations consisting of a $5,000 penalty for each telephone line the subscriber to which changed primary interexchange carrier as a result of the unlawful practice and the return of three times the amount billed if a subscriber who changed primary interexchange carrier as a result of an unlawful practice was charged for long-distance services.
Prohibits certain deceptive advertising practices, known as "slamming," with regard to long-distance telecommunications services.