General Bill Lockyer and the California Public Utilities Commission
(PUC) recently announced the settlement of a major consumer
protection lawsuit against long-distance service provider MCI
WorldCom Communications Inc., and its parent company, WorldCom
March 7 by San Francisco Superior Court Judge Alfred G. Chiantelli,
the judgment requires MCI to pay a total of $8.5 million in
penalties and reimbursements to the Attorney General's Office
and the PUC for the costs of the investigation.
settlement represents a major victory for California consumers
who are tired of getting ripped off by long-distance companies
that try to gain residential and small-business customers by
deceptive means," Lockyer said. "We expect this judgment
will serve as an industry model and as a wake-up call to other
long-distance providers that we will not tolerate slamming,
cramming or other underhanded business practices."
Loretta Lynch said the settlement would ensure that customers
know the terms of their offers before they sign up and before
they get their first bill. "Under this judgment, MCI will
have to stop the deceptive practices that resulted in thousands
of complaints from California consumers," she said.
and the Attorney General's Office sued MCI in July 2000 after
investigating thousands of complaints from consumers about the
company's deceptive business practices. The investigation revealed
that MCI routinely engaged in "slamming," or changing
long-distance service providers without permission or through
deception, and "cramming," which involves billing
for add-on services the consumers have not authorized. The investigation
also found the company continued charging consumers after they
cancelled their MCI service and hid the actual costs of services
authorizes the PUC and the Attorney General's Office to monitor
MCI for compliance with the terms of the settlement, and to
ensure that MCI makes major changes in its advertising practices.
requires MCI to prevent the practice of switching a customer's
long-distance service provider without their permission or through
deception, billing for add-on services without a consumer's
authorization, and continuing to charge consumers for services
agreed to track and promptly resolve complaints from California
consumers, and the company is barred from attempting to collect
on bills still in dispute. The company also agreed to clearly
and conspicuously disclose to consumers certain information
about its advertised rates and promotional programs.
MCI must provide its customer service representatives with the
training and authority they need to answer customers' questions
and resolve complaints. MCI telemarketers will be required to
provide complete and accurate information about MCI services they
are trying to sell. The company also must develop formal scripts
for use by telemarketers and monitor sales calls to ensure telemarketers
are not violating terms of the court judgment.