PHOENIX — Qwest Communications will pay $3.75 million to the state and additional restitution to consumers to settle a fraud lawsuit against the telephone company, Arizona Attorney General Terry Goddard announced Monday.
Denver-based Qwest will pay the state for costs associated with the lawsuit and for a consumer education program. The $3.75 million is separate from restitution to thousands of individual customers.
The company also made numerous promises that include prohibitions against "cramming," the billing of consumers for products or services not ordered or authorized.
The promises include agreements to provide written confirmations, make new disclosures of complete terms of wireless agreements and not make inappropriate or excessive transfers of consumers' calls to Qwest.
"Arizona consumers are the big winners in this settlement," Goddard said. "Qwest's concessions will improve fundamental business practices and make it much more consumer-friendly."
Many of the promises included in the settlement already have been implemented, company spokesman Jeff Mirasola said. "We're pleased to resolve this matter so we can now continue our focus on delivering our 'spirit of service' to our customers."
Mirasola said transfers of calls were a particular source of aggravation to Qwest customers. The company is training service representatives so they can handle more matters, Mirasola said.
The company has made refunds or provided billing credits to 2,140 customers and is processing restitution for an additional 600, Goddard said. Other customers who want to seek restitution have 90 days to file written complaints.
Mirasola said he could not immediately say how much money was involved in the restitution to individual customers.
The lawsuit was filed in October 2001 by Goddard's predecessor, fellow Democrat Janet Napolitano, now Arizona's governor.
The suit alleged that Qwest defrauded customers by placing unauthorized charges on their phone accounts, refusing to provide refunds to customers and continuing to charge for unauthorized services even after customers complained or contested the charges.
Qwest did not admit wrongdoing in the settlement and initially contested the suit, arguing that the state had failed to prove a pattern of deceptive sales tactics.
Similar lawsuits in Colorado and Washington have been settled. A settlement to a lawsuit in Utah is also in the works, Mirasola said.