Consumers in Washington state whom Qwest Communications billed for unwanted telephone, wireless and DSL services can get a refund under terms of an unprecedented settlement announced yesterday.
In the past two years, state agencies have heard from more than 7,000 customers who say Qwest charged them for services they didn’t want. Some of those can expect several hundred dollars back from Qwest. The company has 2 million customers in Washington.
Attorney General Christine Gregoire points out how a Qwest customer’s bill reflects the service charges he had to pay for a “package” deal.
State Attorney General Christine Gregoire said the telephone company has also agreed to pay the state an additional $1.3 million to settle an investigation into unfair business practices.
“Consumers believe they have been misled, mishandled and misadvised by Qwest,” Gregoire said. “This settlement requires Qwest to provide the kind of service consumers need, want and deserve, and it stops the hard sell for products they don’t want, don’t need or can’t afford.”
Yesterday, the state began a zero-tolerance policy to put an end to Qwest’s practice of pushing unwanted services on its customers. “A lot of times, customer service only increased customer frustration,” she said.
Qwest’s president for Washington state, Kirk Nelson, said the settlement was positive for his company, putting its mistakes behind it. He added that he was looking forward to repairing relationships with disgruntled consumers and promoting better customer service initiatives also included in yesterday’s settlement.
Customers who filed complaints with the state Attorney General’s Office or the Utilities and Transportation Commission since Nov. 1, 2000, will get their money back for unwanted services. The company that resulted from the merger of Qwest and U S West began its telemarketing push around that time.
Other unhappy customers who were charged for unwanted or useless services have until mid-March to contact the Attorney General’s Office.
Complaints often involved a practice known as telephone cramming, when a company “crams” unwanted services onto a customer’s bill.
Those services usually cost an extra $1 to $3 a month each, and include such features as call waiting, caller ID and call forwarding.
Consumers complained that they suffered months of high bills and hours of waiting on hold for a Qwest representative to get their bills corrected. The process was so excruciating that customers stopped calling the company for bills that didn’t amount to large sums of money each month.
Gregoire said that she could not estimate how much restitution could cost the financially troubled telecommunications company. She said, however, that the average monthly bill from disgruntled customers showed an overcharge of about $20, the cost of what was called the “custom choice” package. That could amount to nearly $400 for someone who has paid for unwanted packages since complaints began rolling in two years ago.
Under the settlement, Qwest has agreed to pay restitution to:
Residential telephone customers who were charged for extra features when all they wanted was the $12.50 basic service.
Wireless customers who tried to cancel their service at the end of a so-called “free trial” period or were charged for plans not ordered.
DSL customers who paid costs not disclosed to consumers for special modems and more expensive types of service than were ordered.
Among other service agreements, Qwest has agreed to hire customer-service representatives in Washington state to handle customer concerns. Before, in-state representatives were all commissioned sales people.
The company will also make it easier for customers to cancel services at the end of free trial periods by setting up a toll-free number and e-mail address where customers can leave messages.
Skeptical consumer attorneys also compelled the company to pay for an independent observer who will monitor no fewer than 100 customer calls each month and investigate any call in which a customer complains about unwanted services appearing on a bill.
As a condition of a merger in 2000, Qwest and U S West promised state regulators that the new company would improve U S West’s dismal service record, for which the company faced fines in this state and elsewhere.
Consumers will be happy with Qwest’s new customer-service promises, “assuming all of this is real,” Gregoire said.
“The jury’s out on whether they’ll be able to change their company culture.”
Nelson said that he and the company are not dwelling on mistakes because they are too busy improving the company for the future.
“What we’re talking about is past practices,” Nelson said.
Customers besieged the company and state regulators with complaints earlier this year when Qwest sent out letters notifying customers that the company would share such information as their names, telephone numbers and willingness to buy new services over the phone with other businesses. Qwest quickly reversed its plan in all 14 states it serves.
The issue compelled the state Utilities and Transportation Commission to adopt strict telephone privacy rules, which take effect in January.
Qwest also replaced its top leadership, most notably hiring Chief Executive Officer Richard Notebaert, who took over in June. Since then, Notebaert has been selling assets to help pay down debt, reported as $26.1 billion in September.
The company also changed its corporate slogan from “Ride the Light,” which emphasized new technology, to “Spirit of Service.”