Let the buyer fight back

We've all heard the advice: Read the fine print. Which is generally pretty good advice, unless of course the fine print in question is written in such a way that no one from the general population can make any sense of what it says, much less what it means.

When that happens, it becomes a matter for the courts. NOS Communications is learning this fact the hard way as it comes under attack from customers concerning its billing practices and marketing pitches.

Several class-action suits filed against the company have been consolidated and are now in the hands of a federal judge in Las Vegas. The question is whether NOS is the architect of a devious bait-and-switch caper that has duped customers from coast to coast or simply more cunning than the average CLEC.

There's no doubt in Rachel Sumner's mind how NOS should be described. “They just lie,” said the NOS customer. “They set it up so that, if you read it quickly or don't read every single word—even if you do read every word—you don't realize you're being charged through the nose. We feel like we've been royally duped.”

The “it” to which Sumner is referring is the qualifying information contained in NOS marketing materials and order documents. This information references the tariff NOS has filed with the FCC to define its billing rates and practices. This language, as well as the tariff, is at the heart of the litigation against the company.

“The tariffs are at the root of the problem,” said Eric H. Gibbs, an attorney for the plaintiffs. “They are supposed to be documents you can review and understand. You're supposed to be able to compare the tariff to a company's marketing information. In the case of NOS, I don't think anyone can do this and figure out the rates they are actually being charged. Their tariff takes common everyday terms and redefines them.”

NOS refused to comment on the allegations, but current or former NOS customers interviewed for this story universally told the same tale: NOS would entice them with a low per-minute rate, generally in the 6¢ to 8¢ range. Then, after a couple of months, the company effectively would double or triple the rate by converting the standard of measurement from minutes to “total call units,” or TCUs.

Using a complex formula, NOS has determined that a call of one minute equals 2.5 TCUs. A two-minute call equals 4.5 TCUs, a five-minute call 10.5 TCUs, and so on.

Thus, for the first two months, a five-minute long-distance call would cost a user 35¢ at 7¢ per minute. After the first two months, that same call would cost 74¢—more than twice as much—using the TCU as the unit of measurement.

“That's how they disguise it,” said John Ullom, owner of Absolute Refinishing Technologies in St. Paul Park, Minn. “If you're not careful, a per-minute charge turns into a TCU and you never see it coming.”

One of the consolidated class-action suits filed against NOS subsidiary Affinity Networks alleged that the “defendant's tariff [is] so confusing that Affinity's rates are not discernible from the document,” and that “neither overly enthusiastic draftsmanship nor negligent omission can account for the indecipherability of Affinity's tariff.”

All of this is very confusing—and time consuming—for the customer, said Lincoln Stoller, president of Braided Matrix in Shokan, N.Y.

“As a customer, you have no idea what's going on because you can't translate the total call units back into time,” he explained. “So if they tell you you're being charged $30 bucks for 15 total call units, you have no idea what that corresponds to as a competitive rate or whether the bill is even correct.”

It's also expensive. Denise Du Val, an office administrator for Life Medical Equipment in Miami, said that her long-distance bill went from $1000 to $2000 per month to more than $4500 per month for a three-month period.

But that was just the beginning.

Du Val said that after she contacted NOS to complain about being overcharged, she was told first that she had made some sort of mistake or that her company's call volume had simply increased. After Du Val persisted, things took a nasty turn, she alleged.

“They started threatening us. You have no idea what we went through,” Du Val remembered. “After several months of fighting with them, I finally called and told them that if the harassment didn't stop, we would take more serious action. We went through hell.”

Ullom told a similar story but with a twist.“Here's where it gets weird,” he said. “Right underneath where they describe the TCU, it says I have to use their arbitration process for any dispute. So I said, ‘Okay, let's go. I want to do that.’ And their reaction was, ‘What?’ They had no idea what I was talking about.”

Eventually, after pursuing it further, Ullom received a call from a member of the company's legal department.

“He wouldn't reveal what the arbitration process was,” Ullom said. “He offered to settle and asked what it would take, and I said I wanted two-thirds of my money back. He wouldn't give it to me, so I repeated that I wanted to go through the arbitration process. That's when he got frustrated.”

Eventually, Ullom alleged that a higher-ranking NOS representative told him that he was free to take the company to court. “I really don't think there are any arbitration procedures,” he said.

Now a number of NOS customers have taken the company's advice. While it remains to be seen how the case will turn out, considerable damage already has been done, according to Du Val.