AN ACT Relating to unauthorized changes and billing for telecommunication services; adding new sections to chapter 80.36 RCW; creating new sections; and prescribing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that changes in the rapidly changing telecommunications market are resulting in new consumer problems. The legislature further finds that unauthorized changes in telecommunications service, known commonly as slamming, and unauthorized billing for service on telecommunications bills, known commonly as cramming, are unfair and deceptive consumer practices. The legislature further finds that consumers should have options available to protect themselves against unauthorized service changes and billings. In addition, current penalties and remedies need to be increased to provide a more effective deterrent to these practices.

NEW SECTION. Sec. 2. (1) Every local exchange telecommunications company must offer to its customers, as a part of basic local service and at no additional cost, the following optional services:

(a) Preferred carrier freeze. Preferred carrier freeze procedures, including any solicitation thereof, must clearly distinguish among telecommunications services subject to a preferred carrier freeze. The carrier offering the freeze must obtain separate authorization for each service for which a preferred carrier freeze is requested. If a customer has subscribed to preferred carrier freeze, the local exchange company may not make changes to the customer's telecommunications services including without limitation local exchange service, intraLATA, interLATA, intrastate toll, interstate toll, or international toll service except on direct oral or written direction of the customer and shall reject any orders for change in service that are submitted on behalf of the customer; and

(b) Bill block services. Customers may block the billing of nontelecommunication products or services or telecommunication services provided by a company other than the customer's local exchange carrier or authorized long distance carrier. On request of bill block services by the customer, service providers that are not affiliated with the local exchange carrier shall not submit charges to the local exchange carrier for nontelecommunications products, services or nonpresubscribed intrastate or interstate toll services. For purposes of this subsection, nonpresubscribed intrastate or interstate toll services shall not include dial-around long distance or calling card services.

(2) Each local exchange telecommunications company must notify its customers of the services described in this section at the time service is established and at least once per year thereafter. The commission may prescribe the form of notice by rule.

NEW SECTION. Sec. 3. All lists of charges for services that appear on a customer's bill shall be clear, separate, and distinct. At a minimum, all bills must clearly identify on the bill the company making the charge, the specific product, service, or package of services being billed for, and a toll-free contact number for disputing a charge. The commission may prescribe the form of bill disclosure by rule.

NEW SECTION. Sec. 4. (1)(a) No person shall: (i) Cause a change in a customer's selection of telecommunications company without the customer's authorization as prescribed by the commission; and (ii) place or cause to be placed an unauthorized charge on a customer's telecommunications account.

(b) Any customer who is the victim of acts prohibited by this section is absolved of liability for (i) all charges imposed by the unauthorized carrier for products or services provided during the first thirty days after the unauthorized change, or for a longer period of time as permitted by the commission; (ii) all charges required to return the customer to his or her properly authorized carrier; and (iii) all other charges imposed in connection with the unauthorized change.

(2) The carrier that a customer contacts to report an unauthorized change, whether that entity is the customer's local exchange company, unauthorized carrier, or the customer's authorized carrier shall immediately take appropriate action to return the customer to his or her authorized carrier. The carrier that a customer calls to report an unauthorized change, whether that entity is the customer's local exchange company, unauthorized carrier, or the customer's authorized carrier is required to inform the customer that he or she is not required to pay for any unauthorized charges incurred for the first thirty days after the unauthorized charge. The unauthorized carrier shall remove charges, if any, from the customer's bill for charges incurred within the first thirty days of the unauthorized change and any charges required to return the customer to his or her properly authorized carrier. The local exchange carrier, when serving as the billing agent, may independently carry out the provisions of this subsection.

(3) If a customer disputes a charge for nontelecommunications service, or telecommunications services provided by a company other than the customer's local exchange carrier or authorized long-distance carrier, the local exchange company shall remove the charge from the bill. This subsection does not affect the ability of the charging company to independently collect legitimate charges.

(4) The commission may adopt rules necessary to enforce this section.

NEW SECTION. Sec. 5. In addition to any penalties provided by law, the commission may take one or more of the following actions:

(1) Order payment by an unauthorized service provider to the service provider previously selected by the customer in an amount not to exceed all charges billed to the customer by the unauthorized service provider for services provided during the unauthorized service period; and

(2) Order the unauthorized service provider to refund all payments made by the customer for services provided during the unauthorized service period.

NEW SECTION. Sec. 6. The legislature finds that the practices covered by section 4(1)(a) of this act are matters vitally affecting the public interest for purposes of applying the consumer protection act. A violation of section 4(1)(a) of this act is not reasonable in relation to the development and preservation of business and is an unfair or deceptive act in trade or commerce for the purpose of applying the consumer protection act, chapter 19.86 RCW. In any action under chapter 19.86 RCW, a person who proves any of the causes of action identified in this section is entitled to a presumption of injury and in addition to recovering costs and reasonable attorneys' fees, damages may be ordered in the amount of two thousand five hundred dollars.

NEW SECTION. Sec. 7. The Washington utilities and transportation commission and the attorney general shall assess and report to the legislature by June 2000 whether the practices of unauthorized service changes and billing have been deterred by this act and may make recommendations to the legislature with regard to enforcement.

NEW SECTION. Sec. 8. Sections 2 through 6 of this act are each added to chapter 80.36 RCW.

NEW SECTION. Sec. 9. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.