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Deceptive Business Practices Alleged

WorldCom Agrees to $8.5 Million Penalty

March 7, 2002
MCI Group has agreed to pay $8.5 million to settle charges that it tricked customers with misleading ads and billed consumers for services they had not ordered.

"The settlement represents a major victory for California consumers who are tired of getting ripped off by long-distance companies that try to gain residential and small-business customers by deceptive means,'' California Attorney General Bill Lockyer said. The state said it received thousands of complaints of false and misleading ads in 2000.

State Judge Alfred Chiantelli approved the settlement in San Francisco today, allowing the state to collect $8.5 million in penalties and reimbursements to pay for its investigation.

Lockyer and the California Public Utilities Commission sued MCI WorldCom in July 2000, accusing the company of billing customers for services they had not ordered and "slamming" -- the practice of switching customers' long-distance carriers without permission.

"We expect this judgment will serve as an industry model and as a wake-up call to other long-distance providers," Lockyer said.

Besides the penalties, the settlement requires WorldCom to provide more complete information about rates and directory assistance fees in its advertising.

MCI Group, based in Clinton, Mississippi, is the No. 2 long-distance carrier after AT&T Corp.

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