Orange County District Attorney Settles Slamming Lawsuit

For Immediate Release
December 17th, 2002
Contact: Deputy District Attorney
Andrea L. Burke
(714) 347-8739

Orange County District Attorney Settles Slamming Lawsuit

SANTA ANA – October 22, 2002 – The Orange County District Attorney’s Consumer Protection Unit announced today the settlement of a consumer protection lawsuit against Talk America, Inc.  The company is a switchless reseller of long distance telephone service operating in California with corporate headquarters in Reston, Virginia.

The lawsuit alleges that Talk America, Inc. engaged in a practice known as “slamming,” which is the unauthorized switching of a customer’s long distance provider.

The lawsuit also alleges the defendant did not use a sole source document for the letter of agency authorizing a switch of long distance service; did not use an independent third party to verify the customer’s change in long distance providers; and during telephone solicitations made misleading representations that they were employees of the customer’s local access telephone provider.

Without admitting wrongdoing, Talk America, Inc. has agreed to the terms of a permanent injunction and final judgment designed to insure compliance with various provisions of the California Public Utilities Code and Business and Professions Code.  As part of the settlement, the defendant is ordered to pay $500,000 in civil penalties and reimbursements for the costs of investigation.

Orange County District Attorney Tony Rackauckas highlighted the importance of stopping crimes like this one in saying, “It is critical to prosecute these crimes against consumers in order to ensure companies engage in fair and legal business practices and not steal customers from competitors illegally.”

Investigation of the matter was conducted by the Orange County District Attorney’s Consumer Protection Unit in cooperation with the Public Utilities Commission.  The California Attorney General’s Office was a signatory on the judgment.  Restitution was handled through administrative actions brought by the California Public Utilities Commission, which required defendant to reimburse subscribers $25 for each telephone line illegally switched.