CCC PPPPP U U CCC N N EEEEE W W W SSS C C P p U U C C NN N E W W W S S C P P U U C N N N E W W W S C PPPPP U U C N N N EEE W W W W SSS C P U U C N N N E WW WW S C C P U U C C N NN E W W S S COC P UUUU CCC N N EEEEE W W SSS California Public Utilities Commission 505 Van Ness Avenue, Room 5301 San Francisco, CA 94102 CONTACT: Robert Cagen, CPUC November 21, 1995 CPUC-108 415-703-2197 Margaret Reiter, Deputy Attorney General 213-897-2635 CPUC, ATTORNEY GENERAL SETTLE MULTISTATE SLAMMING CASE The California Public Utilities Commission (CPUC) and the state Attorney General (AG) today announced a tentative settlement of the telephone "slamming" case filed against Sonic Communications, Inc., in a bankruptcy proceeding in Georgia. Californians are expected to receive credits on their bills totaling from about $350,000 to a million dollars. If any consumers have outstanding balances to their bills for Sonic charges, they do not have to pay them. They should contact their local telephone company to have the Sonic charges deleted. The proposed settlement includes the more than $1.2 million Californians have already received through bill adjustments, cash refunds directly from Sonic, and long distance service provided at no charge as a result of CPUC preliminary orders and in an AG action against Sonic in Los Angeles Superior Court. Sonic slammed consumers by switching long distance service electronically after sending what appeared to be $10.00 rebate checks. The CPUC and AG alleged that Sonic switched customers whether or not they endorsed the checks. The checks contained nearly illegible light grey type on the back that Sonic claimed authorized the switch. Once consumers were slammed, Sonic charged them double or triple what they had been paying for long distance service. Owners of Sonic, John Buffa and his family, were also found to be swiftly depleting Sonic's assets. The joint efforts of the CPUC and the AG in February froze Sonic funds held by local telephone companies and prevented Sonic -more- from billing any more "slammed" service. California cooperated with Attorney Generals in Illinois, Georgia, New York, and Texas so that additional funds could be frozen and John Buffa's property in Georgia held as security under court order. The settlement involved AGs and public utility commissions in the four states, the bunkruptcy trustee for Sonic, Sonic's underlying carrier, West Coast Telecommunications, and several private class actions that reflect the AG allegations against Sonic. Californians will receive about 35-40 percent of funds to be distributed to consumers nationwide. The amount actually returned to California consumers will depend on how much the bankruptcy court awards the class action counsels for attorneys' fies, how many consumers reject the settlement and how much the bankruptcy trustee is able to recover from the Buffas. In just over seven months, Sonic slammed about 90,000 Californians. Sonic was not unique, however. Slamming has become an increasing problem. The CPUC and AG warn consumers to review carefully their telephone bills to be sure their local or long distance service has not been switched without their knowledge. To help stop electronic switching by companies such as Sonic, the CPUC and the AG also suggest that consumers ask their local telephone companies to provide them "PIC-freeze" forms which they can fill out to return to their local telephone company. These forms prevent their telephone service from being switched without the customer's written request to the local telephone company. -###-