State regulators say the $209,000 penalty is sufficient, but the agreement's critics vow to seek harsher action.
By MICHAEL BRAGA
© St. Petersburg Times, published July 12, 2000
The Florida Public Service Commission accepted a $209,000 offer Tuesday from Verizon Communications to cover customer complaints that its predecessor, GTE, illegally changed their long-distance telephone service without permission.
But critics say the phone company and its marketing company, Snyder Communications Inc., are getting off too easily for the practice known as "slamming," and they vow to appeal the Public Service Commission's decision.
"This is just a tentative decision, and we will contest it," says Charlie Beck, deputy public counsel for the Florida Office of Public Counsel, which represents the interests of Florida consumers. "We believe GTE knew what was going on a long time before they did anything about it."
The matter was originally referred to the Public Service Commission after 209 people said GTE had switched their long-distance service without authorization between December 1997 and September 1999.
But GTE, which has since merged with Bell Atlantic to form Verizon, denied its employees had perpetrated any illegal act. Instead, the company blamed Snyder Communications, a publicly traded, Maryland-based company. Calls to Snyder's headquarters in Bethesda were not returned.
To resolve the matter, GTE already has paid a total of $20,000 to the consumers who filed the complaints. Now, Verizon must pay $209,000 -- $1,000 per complaint -- to the Florida's General Revenue Fund.
The Public Service Commission staff said that first-time slamming offenders have paid anywhere from $800 to $2,127 per violation over the past two years, and that $1,000 per violation was reasonable in GTE's case.
Beck, however, says the penalty should be higher because Snyder Communications "was involved in the forgery of customer signatures. And GTE was aware that the forgeries were going on for a long time before they stopped using Snyder as its direct marketing company."
Since 1997, the state attorney general's office has been investigating Snyder Communications on allegations of forgery, theft and schemes to defraud telecommunication customers. As part of its settlement, Verizon promised that it would not allow Snyder Communications to interact with its customers in the future. But Verizon has not broken all ties with the company.
"We still have a contract with Snyder," says Verizon spokeswoman Briana Gowing. "We use them for some back office work. But they do not do any face-to-face marketing for us."
For its part, Snyder Communications continues to advertise on its Snyder.com Web site that GTE Communications is one of its principal customers.
Says Gowing: "We told them to take that off."
TALLAHASSEE -- Utility regulator Susan Clark said Tuesday she will resign from Florida's Public Service Commission at the end of the month to practice law.
Clark, who makes $117,000 a year as a member of the regulatory panel, said she was ready for a change. She said she planned to pursue a career in private practice.
Clark was appointed to the PSC in 1991, then was reappointed twice. Her current four-year term would have run until 2003. Gov. Jeb Bush was to appoint Clark's successor from a list of candidates that a nominating commission will prepare.