Telecommunications giant CenturyLink faces a growing legal battle as the state of Minnesota on Wednesday filed a consumer fraud suit against the company, which already faced class-action suits in seven other states.
In the suit, Minnesota Attorney General Lori Swanson charges the Monroe, La.-based CenturyLink billed consumers higher monthly fees than sales agents had quoted for broadband and pay TV service. Within the complaint, the state lists 35 individual consumers, who were quoted prices but were ultimately charged sometimes two or three times the original price.
One customer mentioned in the suit had been quoted a $14.95 monthly rate for Internet service but said he was charged $29.95 instead. Another said he had been offered internet service for $19.95 monthly but was sent a bill for $367.33 including monthly Net service for $71. "The company is quoting one price and charging another for Internet and cable service," Swanson said in an interview.
CenturyLink spokesman Mark Molzen said in a statement that the company has been cooperating with Swanson's office "since its inquiry began and have provided all information requested. ... We take these allegations seriously and will review and respond in due course."
Lawsuits have been accumulating against the No. 3 landline wireline provider in the U.S. since last month when former CenturyLink employee Heidi Heiser filed a suit in Arizona saying she was wrongfully fired after notifying CEO Glenn Post about unlawful billing practices she had observed.
Subsequently, separate class-action suits have been filed against CenturyLink in seven states (Arizona, California, Colorado, Idaho, Nevada, Oregon and Washington). In those complaints, consumers say they were not only charged higher than quoted prices, but also billed for phone lines and services never requested, according to the complaints.
Also, some consumers who had left CenturyLink would find notifications of unpaid charges of $200 to $400 owed to a CenturyLink-affiliated entity on their credit reports months after ending service, said Ben Meiselas, an attorney at Geragos & Geragos, handling the suits. "The level of outrage has reached such a fever pitch our firm is literally being invited to other states and people are upset that we aren’t yet filed in their state," he said.
Damages to consumers could range from $600 million to $12 billion, based on CenturyLink’s 5.9 million subscribers, the suits charge.
About the suits, CenturyLink's Molzen said in a statement: "Unfortunately, these types of opportunistic follow-on claims are not unexpected. The fact that a law firm is trying to leverage a wrongful termination suit into a punitive class-action lawsuit, does not change our original position."
CenturyLink employees "know that if they have any concerns about ethics or compliance issues, we have an Integrity Line in place, 24 hours a day, seven days a week," he said.
Heiser "did not make a report to the Integrity Line and our leadership team was not aware of the alleged matter until the lawsuit was filed," Molzen said. "The allegations made by our former employee are completely inconsistent with our company policies, culture and Unifying Principles, which include honesty and integrity. We take these allegations seriously and are diligently investigating this matter."
Minnesota AG Swanson said her office served CenturyLink with a civil investigation demand last year after getting "hundreds of complaints," she said. The company gave the state more than 1,000 pages of documents, which it said were an “overview” of its pricing policies, the suit charges.
The AG's office found that CenturyLink’s pricing scheme involves more than 1,500 different scenarios for arriving at what to charge a consumer. The findings revealed "an incredibly complicated pricing scheme that they set up," Swanson said. "And to charge the right prices the salespeople have to understand it, number one, and then execute upon it and that clearly wasn’t happening."
Consumers often have only one option when it comes to broadband and pay TV service, although some customers had more and attempted to comparison shop. "It’s very difficult when the company doesn’t give straight answers about what the prices are," Swanson said.
These legal challenges come as CenturyLink aims to close its $34 billion acquisition of Internet backbone provider Level 3 Communications, announced in October 2016.
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