Cramming (Pub. Util. Code §§ 451 and 2890)
Position of Staff
Staff asserts that Accutel imposed charges, in violation of § 451, on consumers' telephone bills for a calling card not authorized by consumers. Staff contends that records from three different sources demonstrate such violations. Staff states that from January 1998 to May 1999, the Commission's Consumer Affairs Branch (CAB) received a total of 234 cramming/slamming complaints about Accutel. For the year 1998, Staff alleges that Pacific Bell (Pacific) logged 689 cramming complaints against Accutel. Additionally, from July 10, 1997, through August 8, 1999, Staff asserts that OAN Services, Inc. (OAN) billed and collected on behalf of Accutel 55,000 California Billing Telephone Numbers (BTNs) and of these credited 43,992 BTNs.
Staff also contends that even though Accutel asserts that it acted as a billing agent for several calling card companies, California customers were always billed in the name of Accutel. Further, Staff asserts that Accutel's operating authority never changed hands, and its contractual obligations with OAN remained unaltered, regardless of whether Accutel was billing for itself or a calling card company. Therefore, Staff concludes that Accutel is legally accountable for the cramming violations, regardless of the participation by other businesses.
Staff believes that Accutel breached the law and its contract with OAN when it processed billings for other companies. Staff asserts that by agreement with OAN and under law, Accutel was allowed only to charge for services or products that California customers had originated through Accutel. Staff contends that processing charges for services that Accutel had not sold or owned breached not only Accutel's contractual obligation to OAN, but also violated Commission rules and regulations.
Position of Accutel
Accutel contends that as a non-facilities based reseller of long distance services it provides both retail and wholesale products as well as billing services for calling card companies in California. Accutel maintains that it billed for its retail services and acted as a billing agent for its resellers and calling card companies through OAN Services.
Accutel states that in Spring 1998 it was contacted by Bonneville Marketing to act as a billing agent for Coral Communications, PCI, Veterans Association of America, Advantage Auto Club and American Network, and also to provide underlying carrier services for the companies' calling cards. Accutel acknowledges that in 1998, it provided billing and rating services for these calling card companies, including billing for the monthly service charge. Accutel contends that it executed the directions of the calling card companies and transmitted the data to OAN for billing on behalf of the calling card companies. Further, Accutel states that OAN processed the data and transmitted it to the local exchange carriers for billing to cardholders.
Accutel states that after it commenced billing the monthly service charges, consumers began complaining. Accutel argues that the complaints made in late 1998 and early 1999 relate primarily to the billings it processed on behalf of the calling card companies. In response to the complaints, Accutel states that it adopted a "no questions asked" policy and authorized credits to those consumers that complained. Further, Accutel states that it terminated its contracts with the calling card companies in late Summer or early Fall 1998. Accutel asserts that internal corrections of the problems caused by the calling card companies took at least two months to implement. Accutel also asserts that it terminated its contract with OAN in January 1999.
Accutel contends that evidence shows that it acted as a billing agent for calling card companies. Accutel argues that D.99-08-017 supports its position because the Commission found in D.99-08-017 that Accutel was acting as a billing agent for Coral Communications.
Discussion
The evidence supports a finding that Accutel imposed unauthorized charges on the telephone bills of some consumers. The evidence is also consistent with Accutel's position that these unauthorized charges coincided with the billing services Accutel provided to calling card companies. The evidence is also consistent with Accutel's explanation that it acted to cure the problem by ceasing to bill for the calling card companies. The evidence also shows that Accutel adopted a "no questions asked" refund policy. The majority of the evidence supporting Accutel's position was provided by witnesses sponsored by Staff.
For instance, Staff sponsored a witness from Pacific who stated that the number of complaints about Accutel declined dramatically in 1999. This decline follows the actions Accutel claimed it took to remedy increased consumer complaints. The last three months of recorded data concerning incidents of cramming reported by Pacific for Accutel were 3, 8 and 0. At hearing, counsel for Staff asked its witness from Pacific the following:
Q. What was the number of complaints to date that you've received for 1999?
A. 364.
. . .
Q. What was the amount of complaints that Pacific Bell adjusted in January of 1999?
A. 174.
Q. And in February of 1999?
A. 109.
Q. And the next month, March?
A. 62.
Q. April?
A. 8.
Q. May?
A. 3.
Q. June?
A. 8.
Q. July?
A. 0.
(R.T. 3/326, Staff/McGreevy.)
This decline is sharp enough for us to infer that Accutel's cramming problems that are the focus of this OII are traceable to billing services provided to certain calling card companies. Accutel's cessation of such services to those companies appears to have abated cramming problems. Staff's consumer witnesses also testified that when Accutel was contacted it was helpful and responsive. Staff's consumer witness Melodye LeVier testified that when she called Accutel, she spoke to its President, Donna Kim, and Kim was congenial and polite.
The record does not support Staff's allegation that 200,000 to 400,000 instances of cramming occurred. Staff introduced many exhibits, however, the usefulness or relevance of these exhibits is difficult to discern. For example, Staff requested admission into the record of whole transcripts from depositions as well as several compact disks containing unexplained data. Although Staff's briefs make reference to some of the exhibits it introduced into evidence, Staff's briefs do not provide the Commission with an analysis of the majority of the exhibits. Despite the exhibits introduced into evidence by Staff, we are uncertain how many consumers may have received unauthorized charges on their telephone bills.2 ALJs do not have the resources to sort out and analyze copious amounts of raw data. In the future, Staff should, prior to proceeding to hearing, thoroughly analyze its data and provide an expert opinion on the number of violations that it believes has occurred.
In its opening brief, Staff asserts that:
"Accutel claims to have 200,000 verification records. ... Accutel presented none of them. The conclusion is inescapable; Accutel has no records of authorization by California customers." (Staff's opening brief at pp. 15-16. Similar assertion also made at p. 2.)
In support of its premise that "Accutel claims to have 200,000 verification records," Staff inaccurately cites a statement made at a deposition. A careful review of the deposition3 reveals that despite frequent questioning, the Accutel deponent repeatedly articulated that the verification records were in the possession of a third-party verification company and that no promises could be made that the records could be obtained.4
We are also unconvinced that any substantial harm has occurred to the public since the majority of consumer witnesses that Staff sponsored also testified that they had been reimbursed for unauthorized charges. Similarly, most of the consumers interviewed by Staff stated that they had received credits for erroneous charges. Further, Accutel testified that as a matter of practice it made refunds to all consumers who requested credits. It also appears from some of Staff's exhibits that both OAN and Pacific provided credits to consumers.
In summary, the record indicates that some cramming occurred and that affected consumers received credits for unauthorized charges. The record also supports a finding that Accutel on its own initiative took remedial steps to eliminate future incidents of cramming.
2 Staff has indicated that Accutel has been unresponsive to data requests and that such non-responsiveness has made it difficult for Staff to provide a quantitative analysis. Specifically, Staff made such complaints at the second PHC. Accutel asserted that third parties held many of the records sought by Staff and that it was encountering difficulties compiling the requested documents. The ALJ then asked whether the hearing should go forward. Staff responded that the hearing should go forward as long as Accutel was precluded from introducing evidence that Staff had not had an opportunity to review and prepare rebuttal. 3 Exhibit 54, pp. 92-94. 4 Although we are mainly concerned about Staff's inaccurate citation, we note that pursuant to Pub. Util. Code § 2889.5(a)(7), a telephone corporation is required to retain verification records for one year. Further, these records must be made available to Commission staff upon request.
