McDaniel filed a consumer-protection lawsuit against Consumer Telcom, Inc., in 2010, alleging that the company charged for extraneous “bundled” services that many Arkansans were unaware they had even purchased. The lawsuit accused CTI of violating the Arkansas Deceptive Trade Practices Act.
In the settlement, the company agreed to change its business practices to make clear to Arkansas consumers exactly what type of telephone services they are receiving and provide explicit instructions on how to cancel any or all services. Consumer Telecom will also pay the State $20,000 and reimburse the State for attorneys’ fees and costs as part of the agreement.
“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.”
McDaniel alleged in the lawsuit that CTI continued to charge customers the full amount of its “bundled” service package after consumers attempted to switch long-distance providers. The company failed to disclose that cancellation of only one part of a bundle did not terminate the entire package of services.
Consumers were surprised by the continued charges, since they were unaware they had subscribed to a bundled service and had never used the other services offered in the bundle.
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