State looks at false bills from AT&T

Massachusetts utility regulators said yesterday that they are investigating a pattern of AT&T Corp. allegedly sending bogus bills to people who are not customers of the company, then trying to sell them AT&T phone service when they call to complain.

After similar concerns emerged in upstate New York last week, the Massachusetts Department of Telecommunications and Energy said yesterday it has received more than 30 complaints since January from Bay State residents who said they got bills from AT&T although they have never had AT&T service or canceled it months or years earlier.

Verizon Communications Inc., an AT&T competitor, said the phony AT&T bills account for roughly a tenth of all calls since Jan. 1 from consumers in the Northeastern United States complaining to Verizon about another carrier, which would indicate thousands of consumers have been affected.

AT&T spokeswoman Janet Wyles confirmed that the company was resolving "a billing error caused by some system issues" that she blamed on third-party companies whose names she would not disclose. But she denied it was a scheme to get around do-not-call laws banning telemarketing.

"Speculation that this was an intentional act to entice customers to call us is illogical and totally inaccurate," Wyles said. "Serving consumers with integrity and maintaining their trust has been and will always be of the utmost importance to AT&T."

Wyles added that "we believe we've identified the majority of consumers affected" and will automatically begin processing refunds to consumers who erroneously mailed in payments for bills that typically ranged from $4 to $7. A typical amount on false Massachusetts bills from AT&T is $6.01, officials said.

"This isn't something that we've seen before," said April Mulqueen, assistant director of the DTE's consumer division. "It's definitely a new and unusual complaint. One thing that the department is very concerned about is that at least some consumers appear to be paying the bills."

Mulqueen said agency officials have asked AT&T for more information about the problem and are far from launching a formal probe or considering penalties.

The AT&T situation appears to fall outside laws forbidding "slamming," or switching consumers' and businesses' telecommunications providers without their permission. Slamming violations can carry fines of up to $3,000 per incident and lead to companies being banned from offering service in the state if they are found guilty of more than 20 slamming violations in 12 months.

"We need to find out exactly how many customers have been affected by this," Mulqueen said.

Verizon spokesman Jack Hoey said that "many frustrated customers in Massachusetts and the rest of New England are calling us for help. We've seen a surge in complaints over the past two months here, as well as in New York."

Verizon competes with AT&T with several long-distance calling plans and now ranks as the third largest long-distance company nationally. AT&T, using local lines rented from Verizon and other Baby Bell carriers, offers local phone services in Massachusetts and other states to over 4 million customers, including more than 4 percent of the Bay State phone market.

Teresa A. Santiago, chairwoman of the New York State Consumer Protection Board, said Friday that "we have no information suggesting that this was a deliberate marketing strategy to circumvent the spirit of the New York State 'Do Not Call' law." But she said it was "a poor decision by AT&T to try to sell its services to consumers after they were bothered by unnecessary and unwanted bills."

Mulqueen said Massachusetts consumers with questions about erroneous AT&T bills can call the DTE consumer division at 617-305-3531 or in-state toll-free at 800-392-6066.

Peter J. Howe can be reached at howe@globe.com.