State presses fraud case against Las Vegas phone company

Monday, Dec. 8, 2003 | 10:56 a.m.

CARSON CITY -- A state deputy attorney general told the Nevada Supreme Court today his office should be granted a permanent injunction against NOS Communications Inc., accused of "gross deceptive practices."

Deputy Attorney General John McGlamery argued the court should overturn a decision of District Judge Mike Griffin of Carson City, who declined to issue an injunction.

But Dan Reaser, a Reno lawyer representing NOS, argued Griffin deferred action on the case until the state Public Utilities Commission adopted regulations involving consumer protection involving communications services.

Reaser said the PUC was uniquely qualified to set the standards and the ruling by Griffin should be affirmed.

The state's Bureau of Consumer Protection filed a suit against NOS accusing the company of deceptive trade practices. It said the company used "unit calls" in billing customers rather than billing per minute.

It said it received complaints from customers who thought they were being billed for telephone service by the traditional minute. But the billing was by units. There were 2 to 2.5 call units per minute in the charges.

The court took the case under submission.

Justice Nancy Becker said Griffin made a mistake in his ruling in that he thought the pending issue before the Public Utilities Commission was an enforcement action against NOS Communications, rather than a case to set standards.

But she also said the state Bureau of Consumer Protection used the wrong procedures in filing its case against NOS.

McGlamery said NOS was based in Las Vegas but most of the complaints came from out-of-state businesses that felt they had been overcharged.

He argued he had made sufficient showing before Griffin of the deceptive trade practices to warrant a permanent injunction. And the decision by the Supreme Court is of "critical importance" in other cases where the state tries to stop a deceptive trade practice, said McGlamery.

He said the consumer bureau needs to step in when these violations occur.

But Reaser argued the PUC has the authority to rule in this case. He said consumers can submit complaints to the PUC. And he said the staff of the PUC can issue a show cause order for the PUC to consider whether there have been violations.

In fact, on Nov. 7 the PUC ordered an investigation into allegation that NOS violated deceptive trade statues.

NOS has run afoul of other regulatory agencies. It was fined $2.5 million by the state of Florida; the Federal Communication Commission imposed a $1 million fine in 2001 and the Wisconsin Public Utilities Commission revoked NOS' certification to operate.