Long-Distance Charges Confuse Many

Thursday, July 13th 2000, 12:00 am

By: News On 6

WASHINGTON (AP) — Consumer complaints to state regulators about long-distance phone bills for the top two carriers nearly tripled over the past two years, according to data released Wednesday.

The information, collected by the National Association of Regulatory Utility Commissioners, shows that customers of AT&T and WorldCom filed more than 37,000 complaints with 28 state regulators in 1999. That compares with about 14,000 complaints in 1997.

Together, AT&T and WorldCom's MCI brand control about 80 percent of the total long-distance market.

Regulators said that many of these complaints dealt with consumer confusion over charges on bills and advertising. In some cases, consumers said they thought they were signing up for a plan at a certain rate, but were surprised by some of the charges that appeared on their bills.

``They didn't understand the advertising or read the fine print,'' said Bill Gillis, chair of NARUC's Committee on Consumer Affairs and a regulator in Washington state. While the long-distance market might be the most competitive segment of the telecommunications industry, ``consumer complaints have increased at an alarming rate,'' he said.

According to a separate study being released Thursday by AARP, the nation's largest organization of older adults, not all consumers may be aware of the best long-distance calling options for them.

Fewer than half of all respondents in a survey of 1,908 long-distance callers had shopped around for the best long-distance price before signing onto a plan. Only 61 percent were aware that a company's ``basic rates'' are not always their ``cheapest rates.''

``Many Americans are uninformed or misinformed about long-distance calling costs and could save as much as several hundreds dollars by choosing a better calling plan,'' said Christopher Baker, senior policy adviser with AARP.

The NARUC data reveals that in all but a handful of states, consumer complaints to regulators about the two companies increased during the span. Complaints about the nation's largest long-distance carrier, AT&T, increased from 8,125 in 1997 to 19,534 in 1999.

AT&T spokeswoman Rochelle Cohen said the raw numbers have to be placed in context, given that the company has 60 million residential customers.

A plan recently adopted by federal regulators and endorsed by AT&T will consolidate some of the myriad of line-item charges on phone bills, helping to reduce customer confusion, Cohen said. The company also eliminated its monthly minimum charge for basic rate customers.

``We've already taken steps to make phone bills simpler,'' she said.

Consumer complaints to regulators about WorldCom increased from 5,629 in 1997 to 18,316 in 1999. But the figures from the first half of 2000 — about 7,200 complaints — point to a possible decline this year.

Company officials credit a new customer service initiative implemented in December 1999. That plan established a mandatory code of conduct for all phone sales representatives, with a disciplinary system for violations. WorldCom also upgraded its third-party verification system and boosted by 10 percent its service staff.

``We recognize that quality, courteous service is as important as low rates if a carrier is going to be successful,'' said WorldCom spokeswoman Claire Hassett.

NARUC said it is working with the two companies on ways to address consumer concerns, including developing a template so phone bills are clearer and more understandable.

The AARP report also recommends such policy measures as uniform disclosure of monthly charges to help consumers comparison shop.

International Communications Research of Media, Pa., conducted the telephone survey of long-distance callers above age 18. The margin of error is plus or minus two percentage points.


On the Net: NARUC site: http://www.naruc.org/

AARP site: http://www.aarp.org/

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