NOS fined $2.5 million for misleading Fla. customers

Chris Jones

Tuesday, March 19, 2002 | 10:41 a.m.

A Las Vegas telecommunications company, already fined by federal regulators, has now paid a $2.5 million fine to the state of Florida to settle charges that it misled consumers about the cost of its long-distance telephone services and failed to easily let its customers switch to another carrier.

On March 6, the Florida attorney general's office said NOS Communications had agreed to pay the fine as well as to revise its marketing practices to settle its troubles with that state. After it received nearly 900 consumer complaints, the Federal Communications Commission last April fined NOS and its Affinity Network Inc. affiliate $1 million for similar violations it called "unfair and deceptive marketing tactics." An FCC spokesman said today that case is awaiting settlement pending an appeal from NOS.

Florida Attorney General Bob Butterworth said NOS and its affiliates sold long-distance telephone services to about 10,000 Florida businesses between Jan. 1, 1997, through Sept. 19, 2001. After customers signed on with the company, Butterworth said their bills were typically higher than promised because NOS calculated its charges using a complicated and uncommon "call unit" pricing structure instead of the standard cents per minute basis.

"Customers who signed up were told they would enjoy big savings by switching to NOS Communications' services," Butterworth said. "What they were not told is that any savings would likely come only during a relatively brief promotional period. They also were not adequately advised that they would be billed under a system so complicated and confusing that customers needed a conversion calculation to determine their per call cost."

As part of its agreement with Florida, NOS also agreed to provide current customers with a clear explanation of its billing methods and give them the opportunity to switch to another long-distance carrier at no charge, Butterworth said. A spokeswoman for NOS Communications declined to comment on the settlement.

State regulators in California, Wisconsin and Connecticut have also criticized the company's billing practices; Colorado officials pulled the company's operating license in 2000, and the Utah Public Service Commission last October denied NOS's application to provide telephone service in that state.

John McGlamery, a Deputy Attorney General for the Nevada Bureau of Consumer Protection, declined to comment on whether Nevada is investigating NOS. He said it does not sell its services to Nevada customers.

"We're very aware of the complaints and what the other states are doing. As far as any actions by this office, I can't comment at the present time," said McGlamery.