Mci Settle Allegations Of False Labeling

Attorney General Spitzer today announced a multi-state settlement with one of the nation's leading telecommunications firms over falsely representing the company's fees to consumers.

MCI/Worldcom Communications, Inc. was accused by 24 states of falsely describing its self-assessed "National Access Fee" as a governmental tax.

"Competition is effective only when consumers' buying decisions are based on truthful information," Spitzer said. "MCI's misrepresentation of their self-imposed fee as a governmental tax purposefully understates the real costs of MCI's services, particularly when consumers attempt to compare their rates to those of other long distance carriers."

Starting in January, 1998, MCI billed its customers a new fee that was labeled a "National Access Fee" and placed it on the portion of the bill labelled for taxes and surcharges. When customers contacted MCI to inquire into this new fee, MCI representatives wrongly told them the fee was a tax assessed by the Federal Communications Commission which they were required to collect.

As part of the settlement, MCI has agreed to the following:

• not to use the term "National Access Fee" or any other like term which could mislead a consumer to believe that it is a tax or government-mandated charge;
• not to represent that its fees are authorized or required by the FCC or any other governmental agency, if it is not;
• not to place its "National Access Fee" in the governmental fees and taxes portion of a consumer's telephone bill; and
• not to represent to customers that MCI is required by the FCC or any other governmental agency to collect this charge, if it is not.

In addition, MCI has agreed to pay each state $55,000 for a total of $1.32 million to settle the charges.

Joining New York State in this multi-state settlement are the following states: Arizona, Arkansas, California, Colorado, Connecticut, Florida, Idaho, Iowa, Kansas, Maryland, Missouri, Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Vermont and Wisconsin.

This case was handled by Assistant Attorney General Jill Ellen Sandford of the Telecommunications and Energy Bureau, under the supervision of Mary Ellen Burns, Bureau Chief.