Conn. AG Slams Telecom Companies

He Accuses Them Of Cheating Customers

The attorney general of Connecticut tells Steve Kroft that vicious competition has led even the most reputable telecom companies to try to trick consumers into giving them their business.

"Competing by cheating has become a way of life for the telecommunications industry, for many of these corporations, many of the most reputable of them," Blumenthal says. The attorney general listed examples of cheating, including continuing to send bills after service is terminated, billing for services never ordered by the customer, and television commercials whose attractive claims are undercut by small type that appears briefly on the screen. "Because it's done by AT&T, MCI or Sprint, people are reluctant to use that word, but when all is said and done, these are scams," he says.

Blumenthal has sued AT&T for billing people who aren't their customers and Qwest for stealing their competitors' customers by forging their signatures – a practice called "slamming." Many of the allegations of slamming are against phone companies like Qwest.

They are represented by the U.S. Telecom Association, whose vice president says slamming is being done by third-party firms unbeknownst to his telecom clients who hire them. "Local telephone companies have nothing to do with slamming violations…These are all done through rogue third-party marketers," the vice president, David Bolger says. But Blumenthal disagrees: "We think the corporation has to have knowledge of a lot of these problems, even if they're done by third-party distributors. We hold the corporation responsible."

Bolger maintains that local phone companies provide good service and high quality for an affordable rate. Blumenthal believes the opposite. "My experience is that the companies are not meeting the standards…imposed on them officially or informally…that consumers have a right to expect."

Bolger, who left the trade association after his interview, was the only telecom executive who would speak to Kroft, despite many requests for comment and interviews with most of the U.S. telecom companies.

Says Blumenthal, "When I first became attorney general 10 years ago, we were investigating boiler rooms in Las Vegas. Now we’re investigating huge multinational corporations for many of the same kinds of scams and schemes."

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