Phone-services firm pays $28,000 in suit

Policies not deceptive,Telecom says

Attorney General Dustin McDaniel has ended three years of consumer-protection litigation against a Nevada-based phone-services provider for a $28,000 payment that also allows the company to continue doing business in the state.

State lawyers filed the agreement with Consumer Telcom Inc. on Tuesday in Pulaski County Circuit Court.

“This consent judgment has been negotiated in good faith, and … is fair, reasonable and in the public interest,” the eight-page agreement states.

In a 2010 lawsuit under the Deceptive Trade Practices Act, McDaniel accused Telcom of secretly enrolling long-distance customers into other company programs, such as phone-calling cards and “casual calling services,” without notifying them.

Customers who switched their long-distance service to another carrier would continue to be billed by Telcom for the remaining services unless they contacted the company to cancel, which is not the common practice in the industry, according to the lawsuit.

“Deception is CTI’s business model,” the lawsuit states, describing the practice as “bait and switch.”

Telcom denies any wrongdoing, disputes the state’s description of its operations and says that it has never violated the law, according to the settlement agreement.

The agreement states that none of the company’s customers were illegally deceived, and all of its operating policies were publicly disclosed - and approved by - the Arkansas Public Service Commission.

Customers will still have to contact the company directly to cancel long-distance services, according to the agreement.

But Telcom will alter its procedure for providing written documentation of its policies as part of the settlement, which requires new customers to be mailed a letter in an envelope that says “information on new service you just ordered” in at least 16-point type.

The suit had called for a $10,000 fine against the company for each violation, plus restitution for each aggrieved client. Telcom has 1,700 clients in Arkansas.

The settlement payment will go into the attorney general’s consumer education and enforcement fund as required by law.

Business, Pages 31 on 09/07/2013

Upcoming Events