Las Vegas telecom firm NOS accused of fraud

Kevin Ferguson

Tuesday, April 3, 2001 | 11:11 a.m.

U.S. regulators on Monday proposed fining NOS Communications Inc. of Las Vegas and a subsidiary a combined $1 million, charging the long distance phone companies' telemarketers deceived some customers.

The Federal Communications Commission said it received 900 complaints since 1997 against NOS and its Los Angeles-based subsidiary Affinity Networks about an alleged "bait and switch" marketing scheme.

Consumers said the companies didn't make clear that some advertised rates were valid for two months only; after that the rates were raised based on a complex formula, the agency said in an order released Monday.

NOS lawyer Danny Adams said his client plans to file a response to the FCC within the next 30 days disputing the charges.

"The FCC is incorrect in its conclusion that our disclosure to customers have been inadequate," Adams said. "The scripts for telemarketers have made it clear that the cents-per-minute rate was a promotional rate."

Following the two-month promotional period, customers were billed based on a different complex formula, based on cents per "total call unit." The total call unit formula often resulted in rates that were twice the advertised cents-per-minute rate, the FCC alleged.

NOS Communications, headquartered at 4380 Boulder Highway, has about 120,000 customers throughout the 48 contiguous U.S. states, and employs a staff of about 1,500 people. The company was founded in 1989. It is a reseller of MCI Worldcom telecommunication services. It largely caters to business customers.

Besides the federal action, at least four states have also filed charges or complaints against the company alleging deceptive marketing practices. They are Connecticut, Florida, California and Wisconsin. Officials at the Nevada Attorney General's office couldn't be reached for comment on whether the state has taken action against NOS. Nevada officials last August said they had received complaints against the firm.

Wisconsin revoked NOS' certification to resell intrastate telecommunication services Feb. 23 because the company was operating under Quantum Link Communications, a name that is not registered with Wisconsin's Public Service Commission.

"We were getting complaints about Quantum's service by customers and realized they were not registered with us," said Chela O'Conner, a PSC senior rate analyst.

Adams said the company plans to appeal the Wisconsin action, claiming NOS sent the registration information accidentally to the secretary of state's office instead of the Public Service Commission.

Officials from California, Florida and Connecticut could not be reached for comment.