I. SUMMARY

Enforcement Staff (Staff) of the Public Utilities Commission's (Commission) Consumer Protection and Safety Division (CPSD) conducted an investigation into the business practices of Legacy Long Distance International, Inc. (Legacy). Staff gathered evidence through reviewing complaint files, analyzing call and billing records, obtaining verifications from carriers on whether certain calls traveled over their networks, interviewing and obtaining declarations from complainants, and, deposing Legacy President Curtis Brown. The weight of the evidence presented in this report supports the conclusion that Legacy violated the following statutes:

1. Public Utilities (P.U.) Code §2890(a) by placing unauthorized charges on consumers' telephone bills (also known as "cramming"). Specifically, Legacy charged California consumers for non-existent, fraudulent and unauthorized calls such as:

· Calls that did not occur, according to carriers' switch records;¹

· Collect calls consumers assert they did not accept nor make;

· Unauthorized third-party charges;

· Collect calls that did not connect well, were inaudible, static, were disconnected or connected to a wrong number;

· Collect calls which consumers specifically refused to accept; and

· Collect calls Legacy connected to consumers' answering machines.

2. P.U. Code §§2896(a) and 451, and the Federal Telecommunications Act of 1996 Section 226, by failing to provide consumers with sufficient rate information with which to make informed choices on whether to accept certain collect calls or not;

3. P.U. Code §489(a) by failing to file its complete tariff timely, and by charging consumers under rates it had not filed;

4. P.U. Code §532 by charging consumers in excess of rates posted in rate sheets; and

5. The Commission's Rules of Practice and Procedure Rule 1.1 by failing to disclose the numerous regulatory sanctions Legacy sustained in 16 other states.

CPSD requests that the Commission open an Order Instituting Investigation (OII) into these allegations and determine whether and how much penalties and refunds are warranted. Staff believes penalties are necessary based on the evidence.

¹ A "switch record" or Automated Message Accounting (AMA) record automatically records data regarding user-dialed calls. It provides electronic detail for billing telephone calls.