CenturyLink’s special committee probe finds no evidence of customer service fraud

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In June, a former CenturyLink employee raised the fraud issue when she sued the telco, claiming she was fired for alerting the company about charging customers out of millions of dollars for services they never ordered.

CenturyLink says a special committee of independent board members concluded there was no evidence that the service provider charged customers for services they did not order—a practice known as cramming—as alleged by a former employee.

During the past six months, the special committee, in tandem with independent counsel from O'Melveny & Myers LLP and forensic data analysts, collected and searched over 9.7 million documents as well as 4.3 terabytes of billing data consisting of over 32 billion billing records.

This group also interviewed more than 200 current and former company employees about its billing and sales practices.

RELATED: CenturyLink employee claims she was fired for accusing telco of fraudulent billing practices

While the committee found that CenturyLink’s management did not condone or encourage cramming, and the evidence did not show that cramming was common, the telco admitted that its “investment in consumer sales monitoring was not sufficiently effective in proactively detecting and quantifying potential cramming.”

The company maintains specific policies and procedures that prohibit cramming and are designed to prevent and deter it.

CenturyLink said that one of the key issues that may have led to how customers were handled was the structure of its products, pricing and promotions were complex and caused confusion. As a result, bills sometimes did not meet customer expectations. What’s more, CenturyLink added that limitations in the Company's ordering and billing software made it difficult to provide customers with estimates of their bills and confirmation of service letters that reflected all discounts, prorated charges, taxes and fees.

Specifically, human errors resulted in some customers not receiving an offered point-of-sale discount, which is something CenturyLink did not address in a “timely manner for some customers.”

Glen F. Post
Glen Post

“The investigation confirmed my long-held belief that there was no fraud or wrongdoing at the Company and that cramming was neither widespread nor condoned,” said Glen Post, CEO and chairman of CenturyLink, in a release. “However, we know there have been times when we haven't provided our customers the experience they deserve. We have identified a number of areas where we can improve the customer experience and have already made significant progress in addressing those areas."

To rectify future issues, CenturyLink began a price for life guarantee for consumers on three of its common internet speed tiers in an apparent move to attract and retain broadband customers from churning to cable, for example. After initially launching the price for life guarantee in Nevada, the service provider offers its customers throughout its entire network footprint.

CenturyLink

In June, a former CenturyLink employee raised the fraud issue when she sued the telco, claiming she was fired for alerting the company about charging customers out of millions of dollars for services they never ordered.

Heidi Heiser, who worked remotely for CenturyLink as a customer service and sales agent from August 2015 until October 2016,filed the lawsuit in Arizona State Superior Court. She said was fired shortly after pointing the issue out to the service provider’s CEO Glen Post during a company Q&A session.

But CenturyLink’s troubles with the fraud allegations did not end with Heiser’s lawsuit. Later in June, Los Angeles-based firm Geragos & Geragos filed lawsuits in Arizona, California, Nevada, Oregon, Washington, Idaho and Colorado.

Meanwhile, Minnesota’s attorney general Lori Swanson filed a separate lawsuit against CenturyLink (PDF), saying her office has also found evidence of repeated and systemic billing fraud at the company.

Joining Minnesota and the other states are a group of customers who filed a class action lawsuit seeking up to $12 billion in damages over claims of being overcharged for services and repairs.