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             California Public Utilities Commission
505 Van Ness Avenue, Room 5301            San Francisco, CA 94102
CONTACT: William Schulte            October 25, 1995     CPUC-097
         415-703-2179
         Armando Rendon
         415-703-1366

      CPUC INVESTIGATES CHERRY COMMUNICATIONS FOR SLAMMING

     The California Public Utilities Commission (CPUC) opened a
formal investigation of alleged slamming practices of Cherry
Communications (Cherry), a long distance phone company
headquartered in Illinois.  The company is a division of Cherry
Payment Systems, Inc.
     A pre-hearing conference to set issues and dates for formal
hearings will be held on Monday, November 6, at 10 a.m. in the
CPUC State Building in San Francisco.  If Cherry requests, a
hearing could be held then on limited issues.
     The CPUC Safety and Enforcement Division staff has already
obtained evidence that Cherry has apparently violated state law
with forged signatures on authorization forms to switch carriers,
misrepresentations to consumers, and repeated slamming of the
same customers.  "Slamming" is taking over a person's long
distance phone service without that person's knowledge or
consent.
     The Commission stated that staff evidence is "good cause to
believe that this utility is operating in disregard of rules and
regulations applicable to long distance intrastate carriers and
that the pattern of conduct may be continuing and adverse to the
public interest."  It issued an order to show cause why it should
not impose fines and/or suspend or revoke Cherry's California
operating authority.
     Cherry allegedly slammed the phone lines of one San Diego
business six times without authorization.  During the first six
months of this year, at least 21 consumers complained to the CPUC
                            - more -
Consumer Affairs Branch of slamming by the company, and two
consumers claimed the company forged their signatures on
authorization forms.
    In July and August, 15 consumers, most of whom were ethnic
minorities, complained that they had been approached by
individuals sometimes claiming to represent Pacific Bell who
tried to persuade them to switch to Cherry for long distance
service.  Some discovered later that they had been switched
without their authorization.  It appears that by a very wide
margin, most users who complained about being switched to Cherry
are ethnic minorities.
    While Cherry may continue to operate in California pending
the outcome of this investigation, the seriousness of the
evidence obtained thus far and concern that violations may be
continuing led the Commission to impose these conditions to
protect Californians:

o  Until further notice, Cherry may not switch any more consumers
   to its service - and the CPUC will advise all local phone
   companies of this; however, customers can directly submit
   authorization forms if they wish to choose Cherry as their
   long distance service.
o  Cherry must stop filing lawsuits on billing issues in other
   states against customers residing in California.

    Cherry Communications has been the subject of similar
investigations in Illinois, Ohio, Louisiana, Florida and
Arkansas.  A 1993 Federal Communications Commission investigation
of Cherry resulted in its paying $500,000 to the U. S. Treasury
and being ordered for two years not to submit customer changes of
long distance phone company to local phone companies without a
valid letter from each consumer authorizing the change.

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