FCC Rules...

Source: FCC Website

C. Independent Third Party Verification Rules (August 15, 2000)

29. Background. In the Section 258 Order, we modified our rules regarding the independent third party method of verification to address some of the problems we have seen in conjunction with its use. Specifically, we strengthened the independence criteria under which third party verification entities operate to better ensure that the third party verification process is truly separate from both the carrier and the carrier's sales representative. Thus, we determined that the third party verifier should not be owned, managed, controlled, or directed by the carrier; the third party verifier should not be given financial incentives to approve carrier changes; and the third party verifier must operate in a location physically separate from the carrier. We concluded that these criteria, while not exhaustive, will inform the Commission's evaluation of the particular circumstances of each case. In addition, we clarified that the third party verification must clearly and conspicuously confirm the previously obtained authorization.

34. Despite these modifications, several parties requested further clarification of the independent third party verification option. Given the number and breadth of these clarification requests, we tentatively concluded in the Further Notice that we should revise our rules for independent third party verification. Accordingly, we sought comment on (1) whether the carrier's sales representative should be permitted to remain on the line during the verification of the change request; (2) the types of information that third party verifiers should be either required or allowed to provide during the verification; (3) whether we should permit an automated verification system that plays recorded questions and records the subscriber's answers; and (4) whether we should permit a "live-scripted" automated verification system, which records scripted questions posed by the carrier's sales representative, along with the subscriber's answers to those questions. We address each of these issues, in turn, below.

35. Discussion. The first issue we address is whether a carrier's sales representative should be permitted to remain on the line during the three-way verification call. NAAG raises concerns that the subscriber might remain under the influence of the sales representative during the verification process. NAAG argues that third party verification should be separated completely from the sales transaction, so that a carrier would not be permitted to connect the subscriber to the third party verifier by initiating a three-way call. Other commenters support allowing the carrier's representative to remain on the line during the three-way conference call.

36. As we stated in the Further Notice, the three-way call is often the most efficient means of accomplishing third party verification. We believe that subscribers may benefit from the convenience of authorizing and verifying the carrier change in one phone call. In addition, use of this method of verification minimizes the risk that the subscriber will not be available when the third party verifier calls to confirm the change.

37. Some commenters propose that the Commission impose certain limited restrictions on such calls to ensure that the verification process will not become tainted, cause subscriber confusion, or go forward without the subscriber's express consent. The proposed restrictions range from prohibiting carriers from remaining on the line once a connection is established with the third party verifier to requiring that all conversation on a three-way conference call be recorded.

38. We agree with NAAG and others that the Commission should delineate minimum requirements to ensure that verification ultimately involves only the consumer and the third party verifier. Given the convenience and cost-effectiveness of the three-way conference call as a verification method, we will retain the three-way call as a verification method, subject to one limited restriction. The carrier's sales representative may initiate the three-way conference call but must drop off the call once the connection has been established between the subscriber and the third party verifier. We believe that this limited restriction will help ensure the independence of the third party verification process and prevent the carrier's sales representative from improperly influencing subscribers, without burdening the verification process. Once the connection has been established between the subscriber and the third party verifier, there is no need for the carrier's sales representative to stay on the line.

39. With respect to the content and format of the third party verification, we asked parties in the Further Notice to comment on a possible requirement that all third party verifications include certain information, such as information on preferred carrier freezes or the carrier change process. We also asked parties to comment on any benefits that might be gained from permitting or requiring third party verifiers to provide subscribers with such additional information. This proposal generated both strong support and opposition. Although many commenters argue that requiring third party verifiers to follow a scripted format would impose unnecessary, additional rules on the carrier change process without producing a significant corresponding benefit, several other commenters ask the Commission for additional guidance regarding the format and content of the third party verification. For instance, Media One states that third party verifiers should be required to confirm the identity of the subscriber, to ascertain that the person contacted is authorized to make a change, and to frame the request for confirmation of the change as a simple yes/no question.

40. We decline to mandate specific language to be used in third party verification calls. In order to eliminate uncertainty as to what practices are necessary and acceptable, however, we adopt minimum content requirements for third party verification. We believe that having minimum content requirements for third party verification calls will provide useful guidance to the third party verifiers and carriers without locking carriers into using a set script. These requirements also allow for more streamlined enforcement because they will assist the Commission in determining the adequacy of steps taken by independent third parties in the verification process. Accordingly, we conclude that a script for third party verification should 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 change; the names of the carriers affected by the change; the telephone numbers to be switched; and the types of service involved (i.e., local, in-state toll, out-of-state toll, or international service). We note that these content requirements do not differ in substance from our rules regarding LOAs.

41. In addition, the third party verification must be conducted in the same language that was used in the underlying sales transaction. We also conclude that the entire third party verification transaction must be recorded, a practice that is already common in the industry. Consistent with our requirements under section 64.1120(a)(1)(ii), submitting carriers must maintain and preserve these recordings for a minimum period of two years after obtaining such verification. If a slamming dispute arises, having a recorded verification will help determine whether the subscriber was simply seeking information or was in fact agreeing to change carriers and, if so, which service(s) the subscriber agreed to change.

42. We further conclude that third party verifiers may not dispense information concerning the carrier or its services, including information regarding preferred carrier freeze procedures or other non-telecommunications services that the carrier may offer to the subscriber. Allowing third party verifiers to effectively market the carrier's services could compromise the third party verifiers' independence and neutrality because verifiers could easily be drawn into presenting the particular market viewpoints of carriers by whom they are retained. In addition, providing the verifier with certain carrier information could result in the disclosure of proprietary information to competing carriers. We also believe that incorporating information about preferred carrier freezes into the verification script is likely to be confusing to subscribers and would prolong the verification process unnecessarily.

43. Finally, we conclude that automated systems that preserve the independence of the third party verification process may be used to verify carrier change requests. The use of automated third party verification systems not only promotes consistency in the verification process and adequacy of the information provided to subscribers, but also gives carriers a cost-effective way to create a readily accessible record of each order confirmation. Moreover, the recordings generated by this automated process may be useful in addressing subscriber complaints of slamming. For instance, the recording can reveal whether the carrier change at issue was properly verified and whether an authorized person provided the verification. Automated systems may also help provide predictable and consistent service.

44. Although several commenters argue that using automated verification systems that record the verification should obviate the need for more detailed script requirements, we conclude that these systems should elicit, at a minimum, the same information that our rules currently require, as well as the information specified in paragraph 40 above. To reiterate, automated verification systems must 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 change; the names of the carriers affected by the change; the telephone numbers to be switched; and the types of service affected by the transaction (i.e., local, in-state toll, out-of-state toll, or international service). In addition, automated verifications must be conducted in the same language that was used in the underlying sales transaction and must be recorded in their entirety to ensure that there is a record of the verification in the event of a slamming dispute. As with the three-way conference call, and for the same reasons, a carrier's sales representative initiating the automated verification call may not remain on the line after the connection has been established. We further conclude that automated verification systems should provide subscribers with an option of speaking with a live person at any time during the call. We believe that, in situations where the subscriber cannot follow the prompts of an automated system (or has questions once the automated verification commences), the subscriber should be able to reach a live person who can complete the process. If the subscriber does not want to complete the verification process, or is unable to do so, the third party verifier must end the call, and the transaction must be treated as unverified.

45. We note that, although our rules do not generally prohibit automated third party verification systems, certain types of automated verification systems undermine the independence requirement and contradict the intent behind our rules to produce evidence, independent of the telemarketing carrier, that a subscriber wishes to change his or her carrier. In particular, we conclude that the "live-scripted" automated verification system is at odds with our rules because it permits the carrier's agent, who is not an independent party located in a separate physical location, to solicit the subscriber's confirmation. From a subscriber perspective, the "live-scripted" version may be appealing because the subscriber is interacting with a live person, even though that person is following a set script. The fact that the questions on the script are being read by the carrier's sales representative, however, compromises the independence of the verification. The risk that the sales representative may ask the questions in a pressuring or misleading manner is inherent in the "live-scripted" version. Because the carrier's sales representative is usually compensated for sales completed, and not for sales attempts, the sales representative could not be considered an unbiased third party that lacks motivation to influence the outcome of the verification process.

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