NTC Agrees to Pay $370,000 in Slamming Case

IRVINE — National Telephone & Communications Inc. has reached a tentative agreement with state regulators to pay $370,000 to settle claims that it switched the long-distance service of at least 10,000 consumers without their permission.

The pending settlement, which still must be approved by the state Public Utilities Commission, ends a nine-month investigation by the commission’s staff into consumer complaints against the Irvine telecommunications company.

The agreement marks the third time NTC has settled cases alleging illegal switching, a practice commonly called slamming.

Last month, it paid $1.25 million to end a civil fraud suit brought by the Orange County district attorney’s office. In July, the company paid nearly $56,000 to settle a case involving 41 consumers in Connecticut.

In both California cases, authorities accused NTC of forging signatures on forms authorizing changes in service. Some signatures allegedly were names of people who already had died.

The company did not admit wrongdoing in settling each of the three cases. Executives would not comment Thursday.

Under the agreement filed with the state agency this week, NTC agreed to pay $320,000 to reimburse thousands of California consumers who complained.

Customers whose signatures were allegedly forged--about 95 cases--would be paid $1,000 each, Public Utilities Commission officials said. The rest of the complainants would receive at least $20 each, according to the settlement.

In addition, the company agreed to spend as much as $50,000 to print brochures explaining telephone slamming and ways to avoid the problem. The commission would distribute the pamphlets.

Commission statistics show that during 18 months, ending in July, the company asked Pacific Bell to switch the long-distance service of about 200,000 Californians. About 10,000 of them later complained to Pacific Bell that they were switched without their consent.

“NTC knew they had a problem and were very cooperative with our investigation,” said Monica McCrary, a staff counsel for the state agency. “That’s why we were able to come to a settlement agreement so quickly.”

Among NTC’s alleged victims were an Orange County district attorney’s investigator and a dentist whose patients include state Sen. Steve Peace (D-El Cajon), who chairs a panel overseeing utilities.

As part of the settlement with the state, NTC agreed to dismiss current directors and officers who were part of the company’s board before Dec. 31, the peak period of its slamming complaints.

Privately held NTC refused to say whether any of those directors or officers remain. The company has until June 30 to fire them.

At least three new directors joined NTC’s board this year, and none of them is expected to leave.