CBSN

WorldCom Sued For False Advertising

WORLDCOM
AP
WorldCom was sued by six states Thursday for allegedly tricking consumers with false and misleading ads.

The lawsuits were part of a multi-state effort that also targeted fellow long-distance powerhouses AT&T and Sprint in a nationwide crackdown on alleged deceptive advertising used to lure customers.

WorldCom, the nation's second-largest long-distance carrier, is accused of deceptive advertising in its promotion of long-distance services and forcibly switching customers to its long-distance service without their permission, a practice known as slamming.

The Clinton-based company was sued by attorneys general in California, Minnesota, Missouri, Connecticut, New Jersey and Maine. Each lawsuit seeks injunctions, civil penalties and restitution.

"Pepe LePew isn't the only thing that stinks about MCI's plan," said Connecticut Attorney General Richard Blumenthal. "Customers deserve the truth as big and clear as a Michael Jordan slam dunk - not the dunking they now get from these companies."

WorldCom's ads for its services feature characters from Warner Bros. cartoons, as well as Jordan.

The lawsuits claim WorldCom has failed to disclose monthly fees and charges for its 5 Cents Everyday plan. Blumenthal said the plan also restricts the low rates to night-time calling only.

A spokeswoman for WorldCom, which recently changed its name from MCI WorldCom, said the company does not comment on pending litigation.

Lawsuits making similar allegations of deceptive advertising were filed Thursday against Sprint Communications by Illinois and Connecticut attorneys general.

Illinois is the lead state in a multistate investigation into the allegedly deceptive practices of three major long-distance phone companies that has led to lawsuits against the top three long distance carriers: AT&T, WorldCom and Sprint.

The state attorneys general decided to divide up the labor: Connecticut also named AT&T and Sprint in that state's lawsuit against the major telephone companies. Maine added AT&T to its complaint, while Illinois' lawsuit only targeted Sprint. Idaho filed a lawsuit only against AT&T.

Illinois' lawsuit against Sprint, the nation's No. 3 long distance carrier, alleges that the company's rates are much higher than advertised due to hidden costs or regulations that are not disclosed to consumers.

"Sprint, we are alleging, used various nationwide ads, one featuring actress Sela Ward, to lure consumers with promises of services for pennies per minute when, in reality, the bills involved nickels, dimes, quarters and much more per minute," Illinois Attorney General Jim Ryan said.

Lydia Steinberg, a Sprint spokeswoman, said company officials had not seen the lawsuit and could not yet comment on Ryan's specific allegations. But she said Sprint stands behind its advertising practices.

"We are confident that our ads are clear and accurate," Steinberg said.

AT&T spokesman Mark Siegel said he could not omment directly on the lawsuits because the company had not yet seen them. But he added AT&T was open with its customers regarding charges.

"We have a long-standing policy of providing all our customers with clear and direct communications about all their rates and charges," he said. "To do anything else in a highly competitive market place would simply not make sense."

Officials at the Federal Communications Commission in Washington declined to comment on the legal action against WorldCom.

The rash of suits comes about 5 weeks after WorldCom agreed to pay $3.5 million as part of an agreement with federal regulators to settle charges that it switched customers' telephone carriers without permission.

Earlier this month the company also canceled its $120 billion merger plan with fellow long-distance telephone company Sprint Corp. over opposition from U.S. and European regulators.

CBS Worldwide Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press and Reuters Limited contributed to this report