LITTLE ROCK, Ark. (Legal Newsline) - Arkansas Attorney General Dustin McDaniel announced a settlement Tuesday with a Nevada-based telecommunications company that allegedly billed consumers after they cancelled their long-distance telephone services with the provider.
In 2010, McDaniel filed a consumer protection lawsuit against Consumer Telecom Inc., alleging the company charged for extraneous bundled services many Arkansans were unaware they had purchased. The suit alleged CTI violated the Arkansas Deceptive Trade Practices Act. CTI also allegedly continued to charge consumers the full amount of the bundled service package after consumers tried to switch long-distance providers.
CTI allegedly failed to disclose that termination of one part of the bundle did not cancel the entire package. Consumers were surprised by the continued charges, seeing as they did not know they had bought a bundled service and never used the other services in the bundle.
"Arkansas consumers were exposed to deceptive tactics and illegal obstacles in their attempts to cancel services they didn't even know they had agreed to purchase," McDaniel said. "Customers were subjected to a contract they never saw, read or accepted. My Consumer Protection Division will work to stop those types of practices that are both burdensome and costly to Arkansans."
Under the terms of the settlement, CTI agreed to change its business practices to make clear to Arkansas consumers what type of telephone services they are receiving and provide clear instructions on how to cancel any or all services. CTI will also pay the state $20,000 in addition to attorney and court costs.