Phone company accused of unlawful charges

The Associated Press
Friday October 06, 2000

LOS ANGELES — A lawsuit charges that Verizon, formerly GTE Corp., ripped off the elderly by charging $4 to $6 per month for the customers to rent their rotary telephones, listing the charge as rental equipment. 

The lawsuit, reported in Thursday’s Orange County Register, covers consumers that have been charged the rental fees in any of the past four years. 

Last year, records show Verizon charged as many as 116,000 Californians for renting phones. Another 19,763 customers last year found the charge and either returned the phone to the company or asked to have the charges stopped. 

The Superior Court lawsuit was filed by attorney Marc Coleman on behalf of customers such as Eva De Bruin, 58, of Los Alamitos. De Bruin was dismayed last month when she discovered the equipment rental charge on her bill. 

She contacted Verizon and the company offered her a $40, one-year refund because De Bruin could not prove she had returned the rotary phone. De Bruin believes she’s been paying a monthly charge for nearly three decades. 

Coleman sued Verizon for negligence and unjust business practices, claiming it collected at least $5 million annually since 1987. He said many of the jilted customers were elderly residents who rented rotary phones. 

A Verizon spokesman on Wednesday declined to discuss the case with the Orange County Register, citing a policy that restricts the company from commenting on pending litigation. 




Coleman also claimed Verizon unjustly enriching itself because consumers paid much more than the retail cost of the rotary phones, now worth about $20. The lawyer claims the company misled consumers by listing the charge as an equipment rental, rather than a household phone rental. 

The practice dates to the period before telephone deregulation in 1984, when it was common for consumers to rent phones from their local phone company. Pacific Bell, now a unit of SBC Communications, eliminated its rental equipment charges between 1985 and 1988. 

Kelly Boyd, a senior telecommunications analyst at the Office of Ratepayer Advocates, an arm of the state’s Public Utilities Commission, said Verizon recently formed a committee to examine its practice of charging customers to rent phones. Verizon offers phones customers can rent for $4.95 to $16.95 a month. It continuously collects the rental fees even after the consumer has paid for the retail cost of the phone. 

“I thought everyone had the charge on their bill,” said Jennifer Cundiff, of Long Beach, another plaintiff in Coleman’s case. “I assumed it was for equipment boxes or wiring or something.”