Nick Rees Oct. 5, 2009, 6:50pm
ROCHESTER, N.Y. (Legal Newsline) - An agreement has been reached with a Rochester-based company to pay $50,000 in refund and credits for failing to notify consumers properly about substantial early termination fees for its services.
Attorney General Andrew M. Cuomo reached the agreement with Frontier
Communications, Inc., following a January investigation into the company and its subsidiaries prompted by dozens of consumer complaints arising from early termination fees.
"Frontier failed to spell out in its contracts the existence of costly fees," Cuomo said. "The company is now fixing the issue by providing written notices of these fees and paying back consumers who were wrongfully charged."
Between Jan. 2007-Sept. 2008, Frontier, a provider of high speed
broadband Internet service as well as local and long distance telephone service, sold bundles of its services under one-, two- and three-year agreements. The agreements, known as Price Protection Plans, offered a rate lower than month-to-month service and carried a promise that the subscription rate would not increase during the term of the plan.
Consumers who terminated a service plan prior to the end of the term,
however, were charged early termination fees that typically ranged from between $50-$400, Cuomo said.
During the course of the Cuomo's investigation, it was determined
that one-year bundle agreements did not come with a written notice of the term or of the existence of the early termination fee.
Consumers were also not notified in their monthly billing statement that early termination fees were part of their agreements, Cuomo said.
Because of this, the first time-consumers learned of the early termination fees was after canceling service when the fee would appear on a consumer's final bill, Cuomo said.
In addition to the $50,000 in refund and credits, Frontier has agreed to pay $35,000 in fees and costs. It will also send written notices to all customers who subscribe to new services about its early termination fees.
No early termination fees will be collected until after all of the notices have been sent.