$50-Million Fine Sought Against PacBell

A consumer advocacy group Thursday asked the state Public Utilities Commission to fine Pacific Bell $50 million for improperly assessing late-payment and reconnect charges to thousands of California customers.

San Francisco-based Toward Utility Rate Normalization (TURN) said the telephone company deliberately chose to delay processing customer phone-bill payments rather than hire additional staff to handle them. As a result, TURN said, thousands of customers every day were assessed late-payment charges and were subject to having their phone service disconnected.

“Once again, Pacific Bell has shown that it can’t be trusted,” said Audrie Krause, TURN’s executive director. “Pac Bell managers care more about profits than they do about their customers.”

Pacific Bell, which earlier this year publicized the erroneously assessed late-payment fees statewide in a series of newspaper ads, called TURN’s charges “full of errors, misstatements and false conclusions.”

The company said the mistakes affected fewer than 100,000 customers, or less than 1% of its 10 million customers statewide. It said the problems were corrected, with the help of additional staff hired just for that purpose, when the firm was initially notified of the situation.

However, TURN charged that as many as 4,000 customers per day over at least two years--as many as 2 million total--were wrongly charged late-payment, reconnect and new-service deposit fees. In some cases, TURN said, the fees were assessed days after Pacific Bell had deposited a customer’s check.

Further, TURN said, Pacific Bell management knew about the improperly assessed late charges and chose to ignore the thousands of customer complaints it was receiving.

The $50-million fine being sought by TURN is equal to the amount of late-payment charges Pacific Bell collected last year, the phone company said.