Friday, July 6, 2001 | 11:03 a.m.
Lawyers for Las Vegas-based long-distance phone company NOS Communications are pushing for arbitration to resolve numerous lawsuits alleging fraud in the way it markets its services.
No way, said lawyers for eight companies suing NOS, during a pretrial hearing last week.
"(Pushing for arbitration) is an attempt by the company to avoid having the case judged on its merits," said Daniel Girard, a lawyer for Omnipure Filter Co.
NOS lawyers say the firm's governing documents filed with regulators state that binding arbitration is the method customer disputes must be resolved.
U.S. District Judge Lloyd George is expected to rule this Fall on the arbitration dispute, Girard said.
Girard and the other lawyers suing NOS say their clients have been victimized by an alleged fraudulent billing system.
NOS claims its billing practice, which is based on "total call units" rather than the typical cents-per-minute method, is defined in the governing documents it filed and had approved by state regulators.
The billing formula is also outlined in the material potential customers receive before they sign up, NOS lawyers said.
But the lawyers suing NOS say calculating a "call unit" is nearly impossible for the average person.
"(The contract) might as well be written in an Eastern European language," Girard said.
NOS's billing method is at the heart of troubles the company has had with the Federal Communications Commission (FCC) and state regulators from Florida, Wisconsin, California and Connecticut.
Florida utility officials were close to yanking NOS' operating license last year, but in August NOS and Quantum Link Communications, a sister company, agreed to file a new tariff, or governing document, that simplified their billing methods.
Dick Durbin, regulatory supervisor for the Florida Public Service Commission, said 125 complaints had been filed against NOS and Quantum Link since August 1999.
Durbin said complaints are still coming in, but not nearly as frequently as before it filed its new tariff in September.
"It appears that they are in good standing now,' Durbin said.
Nevada regulators have had only a few complaints in the past few years by NOS customers, said Rick Hackman, manager of consumer complaints with Nevada's Public Utilities Commission.
Hackman said his department received one complaint about NOS since January, two in 2000 and 10 in 1999.
Colorado officials pulled the company's operating certificate late last year because NOS failed to file with the state its annual report, which is supposed to list the company's corporate officers. It's still delinquent, said Alberta Bennett, records administrator for Colorado's Secretary of State.
In the pretrial hearing in Las Vegas last week, lawyers against NOS said monthly bills are often two or three times larger than what their customers expected because of the way the company calculates a call unit.
The company said NOS and its affiliates have a combined 120,000 customers throughout the 48 contiguous United States.
NOS also offers long-distance phone service through businesses called Affinity Network Inc., Horizon One, NOSVA Limited Partnership, Inetba, Zero Plus, CierraCom Systems and iVantage Network Solutions.
When asked why the company markets itself under so many different names, NOS lawyer Danny Adams said the different names are businesses that offer different rate plans.
"It uses the different names to market the plans so that customers don't get upset when they see ads for lower rate plans (compared to the plan they joined)," Adams said.
In April, the FCC fined NOS and Affinity Network Inc. a combined $1 million after the federal agency determined they engaged in unfair and deceptive marketing tactics.
NOS has not paid the fine. Instead, the company denies any wrongdoing and has filed an appeal with FCC officials and is waiting for a response, Adams said.
The plaintiffs' lawyers moved to consolidate the eight cases into one trial. George set a date of July 27 for the lawyers suing NOS to file a brief explaining the merits of consolidation.
NOS lawyers will have 30 days after that to file a reply, George said.
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