Qwest Communications International Inc. agreed to pay $1 million to the state, along with an undetermined amount of restitution to customers, to settle complaints it engaged in deceptive marketing of its telephone services.
The settlement was announced Tuesday by Colorado Attorney General Ken Salazar, whose office began investigating Qwest’s marketing and customer service practices last year after fielding hundreds of complaints.
Qwest spokesman Skip Thurman did not know how much the company expected to pay in customer restitution, which may appear as credits on the Qwest bills of customers who filed formal complaints. He said payments would start 30 to 40 days after a four-month period to review additional complaints.
But Salazar estimated the restitution could total $1 million that Qwest must pay in addition to the $1 million it is paying the state, which will be used to offset costs of the investigation, enforcement of the settlement and consumer education.
Consumers complained that Denver-based Qwest failed to adequately inform them of the cheapest telephone service that was available, instead encouraging them to buy more expensive packages.
Others complained of poor customer service, saying that when they called Qwest with questions, they were bounced from person to person without getting answers.
Thurman said an investigation of similar complaints in Oregon was settled in February for $575,000. He said similar investigations were under way in two other states, but he would not name them.
“Our focus going forward is improving the customer experience,” Thurman said.
Salazar said Qwest cooperated with the investigation and demonstrated that the company, under the new leadership of chief executive Richard Notebaert, was willing to change its sales tactics.
Thurman said that to improve customer service, Qwest has launched an effort to resolve customers’ inquiries on the first phone call.
He said Qwest has already improved service in its 14-state region this year, with complaints in the first six months down 23 percent from the same period last year, to 3,763.
Under terms of the settlement, Qwest agreed to implement several service improvements including providing full disclosure of the cheapest options available for basic phone service and not “cramming” customer accounts with unauthorized charges.
Additionally, the settlement called for an independent third-party to monitor calls to about 20 of Qwest’s customer service centers and issue quarterly reports to the attorney general’s office.
The settlement was expected to be filed in Denver District Court by the end of the week.