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The Almighty Buck Your Rights Online

PacBell To Be Hit With $27M Fine 31

Posted by timothy from the what-the-market-will-bear dept.
MImeKillEr writes: "The San Francisco Chronicle has an article that states PacBell is going to be hit with a $27 million fine for "incorrectly billing" between 30,000 and 70,000 users for DSL access they didn't request or recieve, or received but didn't work, or cancelled, tacking late fees onto disputed charges, etc."
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PacBell To Be Hit With $27M Fine More

PacBell To Be Hit With $27M Fine

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  • Because companies are in it for the money.

    This $27 million dollar figure isn't enough. In order to deter this sort of practice - to make sure companies don't do it - you need a ridiculous fine.

    Remember when that woman was awarded a hundred million dollars for scalding herself with McDonald's coffee? It was reduced somewhat on appeal. Was that ridiculous? Yes.

    However, every coffee cup in the country had a "don't burn yourself" warning attached to it for some time.

    If you apply that same logic to something important - as opposed to scalding coffee which is utterly trite - you can get similar results. Fine 'em a billion dollars. They've got it; and if you do that they won't dare try this again for a while.
    • This $27 million dollar figure isn't enough. In order to deter this sort of practice - to make sure companies don't do it - you need a ridiculous fine.

      No, you don't. You need a appropriate fine. If they made something like $27 million off the scammy practices, then punish them for twice the amount, not some huge number just because you can.

      Tobacco is a good example. Juries have no concept of a million dollars, much less a billion. Judgements have been awarded in cases where the punative damages were orders of magnitude higher than actual damages. This is just stupid.

      People are all for huge settlements until it's their employer that is getting sued. Maybe you don't realize that these companies are real employers, trying to provide real services. Their management may be sleezy, but an excessive award is not the cure for that.

      What if you were being sued because someone slipped on the sidewalk in front of your small shop? Would you want the jury to award the plaintiff 100 times actual damages? Maybe you really were negligent, maybe you didn't fix the steps even though you knew they were cracked, does that justify an unreasonable award?
      • Maybe you really were negligent, maybe you didn't fix the steps even though you knew they were cracked, does that justify an unreasonable award?

        That depends. If a reasonable award will motivate other shopkeepers to keep their steps repaired, then no, an unreasonable reward is not required. It depends a lot on how often these companies get caught. If a company only has a 1% chance of being caught doing X, then when they are caught the punitive cost must be hundreds of times the marginal benefit of doing X, or it isn't enough of a deterrent. Billing irregularities in the telecom industry happen all the time, and only a fraction are ever prosecuted. Therefore, when they are, the punitive damages need to be huge.

        If you have to drive one company out of business to keep an entire industry in line, you should do it. If you have some other means of reigning in the rampant corporate lawlessness in this country, I'd like to hear it.

        Companies can go under, and people can lose their jobs. Them's the breaks. I'll stand by the argument that more people will have better jobs if corporations obey the law; if some companies have to be punitively destroyed, so be it.
        • I'll stand by the argument that more people will have better jobs if corporations obey the law; if some companies have to be punitively destroyed, so be it.

          I agree, for the most part.

          I think it is more useful to argue for something like better FTC enforcement and peanalties, however. The FTC frequently only slaps companies on the wrist for major infractions. I see no need to pervert the intent of tort law, to accomplish goals that really should be addressed through other channels, like criminal ones.

          When case precedents get set, they apply equally to all companies that wind up in a substancially similar situation. For example, the insane tobacco rulings that have alleviated people from personal responsibility in their choices have now opened the doors for suing fast food companies for serving products that people want that are unhealthy for them.

          Everyone loses when our justice system works in a way that allows tort law to change in a way that eliminates personal responsibility in the use of voluntarily purchased products.
          While this isn't exactly the same case as the situation at hand with the telecoms, which were comitting outright fraud, allowing juries to set abnormally high punative damages carries over into other areas as well.

          Yes, it's a slippery slope argument, but it's a slope we are already sliding down, not just some speculation.
      • Ahh, yes. These places are employers. What typcially happens is that the company lays off boatloads of people to recoup the costs, allthewhile CEOs take hefty bonuses, salary increases, etc while guys like you and I get poked without the courtesy of a reach-around.

        What needs to happen is to find a way to hold the scumbags who are *personally* responsible accountable for their greed/stupidity.

        Of course, in a perfect world I'd be making double what I'm making now, terrorism would be non-existant, Leonardio DiCaprio would be dead, and Jennifer Aniston would be my love-slave.
    • Here [atlanet.org] is some information on the McDonald's scalding incident. The woman sought $20,000 to cover the cost of her operation, but McDonald's refused. A jury awarded her $200,000, not "a hundred million dollars."

      As far as ridiculous, well, I've pulled this paragraph out of the page:

      Further, McDonald's quality assurance manager testified that the company actively enforces a requirement that coffee be held in the pot at 185 degrees, plus or minus five degrees. He also testified that a burn hazard exists with any food substance served at 140 degree or above, and that McDonald's coffee, at the temperature at which it was poured into styrofoam cups,
      was not fit for consumption because it would burn the mouth and throat. The quality assurance manager admitted that burns would occur, but testified that McDonald's had no intention of reducing the "holding temperature" of its coffee.

      So tell me: deliberately selling a drink that was, by McDonald's own admission, "not fit for consumption" even though they knew that burns would occur--isn't that a little bit more ridiculous than the money the jury awarded her?

      • How many people do you know that gulp their hot coffee? McDonald's customers who didn't cover their hands in creamy butter liked that the coffee was hot. Those customers should be able to buy hot coffee if that's what they like. McDonald's was being a good company takeing care of what MOST of their customers wanted. Funny how they didn't take into account how much cooler the coffee got when poured into a cup, cream and sugar were added, it was left to sit for a while, or perhaps held to enjoy the heat on a cold morning, and how hot it would finally be when swallowed after having been stirred blown on then gingerly sipped.

        I've burned my mouth when I didn't blow on pizza enough, and the worst measure of whether the pizza was too hot was it's temperature when they put it in the special pizza deliver appliance. Hey, my teeth are really temperature sensitive too, I'm going to sue Ben and Jerry's for not making a more comfortable room temperature ice cream because I'm too stupid to learn and adapt unlike all the other mammals that preceeded me.
        • Funny--if you'd bothered to follow the link and read the piece, you'd see that even McDonald's didn't believe that people waited for the coffee to cool down, and that folks wanted something they could down in their cars while on the go. Note how they also admitted that most places served coffee at about 140 degrees, not 190, so the woman had a reasonable expectation based on common practice that her drink wouldn't cause third-degree burns if spilled. They'd also received hundreds of similar complaints over the years, and done nothing to change their practices. So no, McDonald's was not being a "good company" because they flat-out SAID this wasn't what their customers wanted. It was just easier for them to brew that way, customers be damned.

          The number of people who comment on this case without even looking up the most easily-found facts is staggering. It's not like it's an ink-blot test where you can make up whatever shit springs to mind. But let's make a list of your assumptions:

          1. Putting cream and sugar in coffee will lower the temperature by fifty degrees. (Ten degrees, I'll take. Fifty, no. Besides, she didn't get a chance to put anything in the coffee before it burned her.)
          2. McDonald's thought people would wait for their coffee to cool down. (They already stated that that's not what most people did.)
          3. February mornings are so cold in Albuquerque that people regularly warm their hands on a cup full of scalding beverage. (Albuquerque is roughly the same latitude as Phoenix and Amarillo, so unless they'd been experiencing an uncommonly cold spell, it wouldn't have been below fifty at the lowest.)
          4. The woman "gulped" her coffee. (No. As I said before, it spilled before she even got a chance to find out how hot it was.)
          5. The woman put "creamy butter" on her hands before opening the lid. (Oh--that was an attempt at being witty. Sorry. I'll ignore that one.)
          So, stripped of your flights of fancy, the fact remains that McDonald's knew this was, not only an accident waiting to happen, but an accident that had already happened to other people. They just sat on their hands, refusing to do anything until a case got so severe that they couldn't ignore it. That's "takeing" care of their customers? Right.
          • Your third point is shows that YOU don't check your facts very much either. Albuquerque, while being at the same latitue as Phoenix, is also 5000 feet higher. It is usually very cold in February, and you're lucky to have fifty as the high, much less the low. Thanks for making it easy to make you seem foolish with the bold Albuquerque.
            • Albuquerque's average daily high in February is around 55, and the low is around 28. You're right, I didn't check my facts. Still, let's assume it's halfway between the high and low, say 42 degrees. Still hardly finger-numbing weather. And that also doesn't let McDonald's off the hook.
    • Remember when that woman was awarded a hundred million dollars for scalding herself with McDonald's coffee? It was reduced somewhat on appeal. Was that ridiculous? Yes.

      NO, most definitely. The woman had third degree burns on her crotch and needed very extensive skin grafting and long hospitalization to recover. It was not a minor injury at all. And, there's no good reason for keeping the coffee that hot anyway. 180 degrees is far too hot to drink.
      • 180 degrees is far too hot to drink.

        Then why order a hot coffee? Oh wait, we need to have a safe society (well-legislated of course). We should force all coffee sold in the US to be of a safe temperature. Something like 80 degrees fahrenheit. That way you can't hurt yourself by dumping the thing in your lap. And to make sure that irresponsible people don't do this at home, it should be illegal to sell coffee pots that are capable of heating coffee above 80 degrees without a license demonstrating that you are a properly trained coffee technician. Heating coffee in a non-designated coffee heating device would be punishable by a $200,000 fine and/or 5 years in prison. This is to keep people from harming society by releasing coffee that has been heated to unsafe levels to the public. Because, you should remember, society is the one that pays for all of those burns caused by too-hot coffee.

  • I got billed for 6 months of DSL from pacbell before I got a refund. I ordered it, then moved before it was installed, because one of my cats peed on a pile of clothing sitting on top of the junction of two extention cords, and causing a nasty fire. It never got installed, but it did show up on the bill.
  • I tried to sign up for PacBell DSL about 2 years ago, but after a series of screwups on their end, called them up and cancelled everything and mailed back their DSL modem. About 6 months later, my phone bill starts tripling and I see I've been signed up. So I deal with ~3hrs of waiting on hold to talk to the right people... AND THEN IT HAPPENED AGAIN. To make a long story short, I think the fine should be larger.
  • ok, not PacBell, but MCI (you know, MCI/Worldcom, the company that had to restate earnings for last year from +2 billion to -2 billion, the company that was fined in 1997 for overbilling), and not DSL, but regular long-distance phone service...

    3-4 months ago, I switched from Verizon/MCI to a local company to provide both local & long distance service. Last week I recived a bill from MCI for $3.59 -- $3.00 "minimum usage fee" (when I was a customer, it was on a plan without a minimum usage fee) and $0.59 taxes. No wonder they can't tell if they're profitable or not. I forwarded a copy of the bill to the fcc and the state Attorney General. Maybe if I have a few hours to kill, I'll try to tell them I'm not a customer of theirs...

    The industry average for overbilling is 10%. Most telcos use "accrual" accounting. Money is reported as recieved when a bill is sent out, not when payment is recieved. By overbilling, the bottom line looks 10% larger than it really is.

  • So who gets the money? (Score:3)

    by ShaunC ( 203807 ) on Sunday July 07, 2002 @04:05AM (#3836121)
    PacBell is going to be hit with a $27 million fine for "incorrectly billing" between 30,000 and 70,000 users
    Suppose it was 30K users, the fine works out to $900 per user. Suppose it was 70K users, the fine works out to $386 per user. Suppose the median is a viable figure, at 50K users the fine works out to $540 per user. So who gets all this money? According to the article,
    If approved, the $27 million would go to the state's general fund.
    And I'm sure the state's general fund is going to reimburse everyone who was overbilled, or outright fraudulently billed for services they never received? Yeah, right:
    Pacific Bell, part of SBC Communications in San Antonio, agreed to give customers a $25 credit or one-month of free DSL service
    if it makes similar billing errors in the future.
    Once again, the consumer takes it up the ass. PacBell has to pay $27 MILLION DOLLARS to the state, who will undoubtedly use the money for the war on drugs, purchasing unnecessary Oracle licenses, or some similar "laudable" cause; but PacBell doesn't have to pay the overbilled customers jack unless it happens again. The improperly billed customers get no legal recourse, aside from fighting PacBell for the charges on their own. Wonderful.

    Color me unimpressed. Hey, California, how about standing up for your citizens instead of your own coffers?

    Shaun
  • But the really good part is that I didn't have DSL for over a year. Suddenly this popped up on my December bill, and they started charging me over $300 per month after that. It took quite some undoing. Everybody admitted that $1300 for DSL service from Dec 12 2001 through Dec 12 2001 was kinda strange, but nobody had any idea what to do about it.
  • Here's a good one:

    I was an early adopter of Verizon DSL in my area. I had it for a couple of years and then moved across town, cancelling the DSL in the process (moved to cable modem). My new bill looked fine for a month, then all of a sudden the DSL charges started up again! Because of the "deregulation" of the industry, Verizon had three different divisions I had to deal with and none of them could directly talk to each other. (They are the ISP, a company that provides the physical DSL link, and the phone company itself, I believe). So- these bills are showing up, and nobody can find where in the computer system they're coming from.

    I finally got the problem resolved: I called the two offending companies at the same time- one on my cell phone and the other on my land line (cordless). I got in the waiting queues, and lo and behold I got customer "service" reps on the line from both companies at the same time (about 20 minutes on hold). So I had one rep in each ear, and I was passing info from one to the other: "ask her to check out this entry... search on this code..." etc. Finally they were able to locate my information and cancel the billing. I guess my early adopter status put me in some obscure system that they had shifted away from or something like that. What a nightmare. Of course my cell phone has lousy reception indoors, so I was standing out on my lawn yammering into a phone on each ear. I suspect my new neighbors got quite a kick out of seeing this.

    I have to admit that the cable company has been much easier to deal with then the phone company, as scary as that sounds.

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