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California Investigates MCI Billing

May 31, 2005
The California Public Utilities Commission (PUC) is investigating MCI's billing practices after receiving hundreds of complaints from consumers who claim they were charged a "minimum usage fee" even though they are not MCI customers.

The PUC said it was "deeply concerned by MCI's apparent disregard for the welfare of California consumers" and for its disregard of previous PUC cease and desist orders.

"The usage fee is imposed as part of a basic default calling plan that MCI erroneously establishes for consumers, even though these consumers have not requested to be switched to MCI nor have they chosen to create a new account with MCI," the PUC said.

The commission said its staff found that MCI had billed consumers a monthly service charge after the consumers asked that their MCI long-distance service be terminated and also in cases where the consumers had never been MCI customers.

"The erroneous billing began on June 1, 2002 and continues to this day," the commission said.

The problem is not confined to California. ConsumerAffairs.com has received complaints from consumers nationwide who have experienced similar problems.

"This is infuriating, but even more so because we have chosen for several years to not have long distance service on our land line," said Alyssa of Spokane, Wash., who said she has been trying for six years to get MCI to stop billing her for service she did not order.

MCI apparently relies on certain codes that it receives from the local telephone company but is misusing the codes to erroneously begin billing customers, a PUC staff report found. "The codes MCI relies upon are not the proper codes to indicate that a subscriber intends to establish a new account," the report said.

The commission said it believes that MCI relies upon the codes and opens new accounts without making any attempt to contact the customer and verify the order, and that it fails to check its own records to determine whether the customer has terminated MCI service.

The PUC issued a staff order in March 2004 directing MCI to "cease, desist and/or mitigate the harm caused" but the company ignored the order, the commission charged.

California's Public Utilities Code states that a telephone bill may only contain charges for products or services that the customer has authorized. Charging for non-authorized service is commonly referring to as "cramming."

Additionally, the PUC said, MCI may be guilty of "slamming," the practice of switching a subscriber's service without obtaining confirmation from the subscriber.

In addition, the commission's report said it "often takes several months for MCI to respond to consumer complaints" and issue refunds. "Consumers express a great deal of frustration with the time and effort it takes ... to have these charges removed from their phone bill," the PUC said.

MCI faces potential fines and other penalties if the investigation concludes that it has violated commission rules.

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