PacBell Says Pay Now, Sue Later
Yellow Pages advertisers who want to sue Pacific Bell Directory over mistakes must pay in advance for the privilege.
The fee is hefty: With a minimum charge of $500, it can be up to twice the monthly cost of an ad. Small-business owners pay it, though, because omission from the Yellow Pages can hurt them.
Take Esther Ginsburg, owner of Golyesther, a Melrose Avenue vintage dress shop. She is paying Pacific Bell $703 for the right to sue the company for damages if it goofs up her $48.50-a-month ad in the Beverly Hills directory. (Her fee was set before the new rates went into effect.)
You might say Ginsburg is forking over money Pacific Bell might later use to settle or fight any disputes that arise. As Los Angeles copyright lawyer James W. Paul put it, “They are asking her to indemnify them.”
Pacific Bell and most other Yellow Pages publishers have clauses in their contracts to prevent lawsuits over mistakes. Generally, a directory publisher’s liability is limited to the cost of an ad. This means that if a mistake occurs, an advertiser will receive a refund at best. Directory publishers say the liability limits help them keep advertising charges low.
Pacific Bell’s contract is unusual in that it will waive the liability limit for customers that pay an extra fee.
“If the customer has purchased the waiver, they can take us to court and sue for as much damages as they can legally prove,” said Sandy Kivowitz, a spokesman for Pacific Bell Directory. “We are giving customers an opportunity to tailor the contract. . . . It is a good customer service step to take.”
The question for small-business owners is whether the right to sue Pacific Bell, an $8.9-billion company, is worth paying for. Paul says it isn’t.
“Collecting from them would be difficult and expensive,” he said, noting that an advertiser would have to hire an attorney and experts to assess damages.
Ginsburg said she paid the fee hoping Pacific Bell will be careful with her advertisement. She said the phone company omitted her bridal listing from its 1992 Greater Los Angeles Yellow Pages and that bridal sales plummeted 20%. All she got was a refund.
“They use this as a ‘gotcha,’ ” Ginsburg said. “If I don’t pay this fee, there is no penalty if they choose to be careless. On the other hand, I can’t afford to sue them if they are.”
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They have a point: No-points mortgages have been a better deal for home buyers in recent years than mortgages with points, according to the trade newsletter Bank Rate Monitor.
A point is a fee borrowers pay when a mortgage is issued. It is equal to 1% of the size of the loan. People who pay points are in effect prepaying a portion of the loan and so are charged lower interest rates than people who take out no-points mortgages.
But the newsletter found that when points are taken into account, mortgages with points actually cost more. In February, for example, the effective rate on no-points mortgages was 7.25%, while the effective rate on mortgages with points was about 7.3%.
The newsletter’s analysis covers 30-year mortgages issued between January, 1992, and February, 1994. The points were amortized over 10 years, the newsletter said, meaning it factored the effect of paying the points into the rate over that period.
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Apartment rents: Los Angeles ranks seventh in the nation in terms of apartment prices, a new survey shows.
The management consulting firm Runzheimer International said a Los Angeles renter earning $25,000 a year would pay 30% of that, or $7,880 a year, for a typical one-bedroom apartment. The average monthly rent for a one-bedroom apartment in Los Angeles was $657. According to census data, nearly six of 10 Los Angeles residents live in rental housing.
Honolulu ranked first in the survey, with an average monthly rent of $1,040. It was followed by San Francisco, at $773, and Washington, at $748.
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Your mother already knew this: The U.S. Environmental Protection Agency has decided that cedar wood products used to repel insects and mildew don’t pose risks to people after all. The agency this month said natural cedar products no longer need to carry warning labels, unless the wood has been chemically treated.
