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Verizon, marketer settle charges
By SCOTT BARANCIK © St. Petersburg Times, published April 26, 2001 Verizon Communications and a former subcontractor agreed to pay $3.1-million Wednesday to settle "slamming" allegations made by Florida's attorney general. Now, the two companies may fight over who pays the bill. Under the agreement, Verizon will pay $600,000 to settle charges that its predecessor, GTE, switched consumers to GTE's long-distance telephone plan without their permission. In addition, Verizon and Snyder Communications Inc. agreed to pay $2.5-million to resolve allegations that Snyder, a company hired by GTE to target African-American and Hispanic consumers, had "slammed" thousands more, in many cases by forging signatures. All $3.1-million is slated to go to the attorney general's legal affairs revolving trust fund. Verizon spokesman Bob Elek said that while a handful of "overzealous" employees at GTE's Phonemart had in fact slammed consumers in 1998, most of the slamming that took place was carried out by Snyder's employees and was in fact reported to regulators by GTE. As a result, Elek said, Verizon will pay the $600,000 but will refuse to contribute toward the $2.5-million it believes is Snyder's responsibility. Snyder representatives could not be reached for comment. "That's something that has to be worked out between our company and Snyder," Elek said. That's not all that remains unresolved. In another case stemming from the same slamming dispute, the Florida Public Service Commission accepted a $209,000 offer from Verizon in July to cover complaints by GTE customers. Later, however, the Florida Office of Public Counsel, which serves as a consumer advocate for utilities' customers, appealed the settlement, calling the amount insufficient. That case has not been settled. But Wednesday's agreement with the attorney general would allow Verizon and Snyder to subtract up to $500,000 from their $2.5-million payment and use it to pay off a future settlement with the Public Service Commission. Regardless of who pays how much, Snyder, a Bethesda, Md., subsidiary of France's Havas Advertising, won't be operating in Florida again any time soon. Under its agreement with the attorney general's office, the company's long-distance marketing subsidiaries can never again do business in Florida. And Snyder itself must cease soliciting customers directly for 10 years. - Scott Barancik can be reached at barancik@sptimes.com or (727) 893-8751.
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From the Times Business report
From the AP
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