PacBell Violates Sales Rules, PUC Group Says


Pressured by aggressive new sales quotas, Pacific Bell employees are routinely misleading customers about phone services and features to ring up sales, according to an investigation by the public advocacy arm of the state’s Public Utilities Commission.

The Office of Ratepayer Advocates, which released its findings Thursday, found that PacBell is violating state sales and privacy rules. It urged the PUC, which regulates utilities, “to order Pacific to cease these improper sales practices immediately.”

After reviewing PacBell sales scripts and marketing materials and monitoring hours of customer calls to the company, the ORA concluded that PacBell employees violated privacy safeguards, did not discuss Caller ID blocking options and consistently pushed customers to buy features they didn’t need.

PacBell’s practices “compromise the safety, privacy, financial integrity and basic consumer protections and customer service requirements imposed by both public utilities codes and by basic business ethics,” the report says.


The company denied the allegations. “Pacific Bell has not violated any commission orders, and we don’t have any customers complaining” about the sales program, spokesman John Britton said.

The allegations mirror those highlighted earlier this year by a small labor union within PacBell and later by a consumer group.

At the time, PacBell acknowledged it had instituted sales goals and incentives, but it denied that the practices represented quotas or that they encourage employees to sell customers features they do not need or want.

Britton said the PUC’s consumer services division, which reviews customer complaints, dismissed the earlier allegations.


Bill Schulte, director of the division, said the consumer services unit looked into the issue but stopped investigating after discovering that it had not received any customer complaints about PacBell’s sales practices. However, he added, “That doesn’t mean there aren’t some policy issues there.”

Over several months, the ORA reviewed sales practices at PacBell, California’s largest phone company, as well as at GTE and two smaller phone companies in the state. It gave passing grades to all the companies except PacBell.

At PacBell “I heard exaggeration, I heard coercion, and heard a severely disabled and impoverished person being sold $30-a-month services,” said Kelly Boyd, senior telecommunications analyst at the ORA and author of the report. “She was a customer who had had her phone disconnected several times before and who stressed that she didn’t have a lot of money.”

In another case, a customer calling to find out where to pick up a phone directory had the PacBell employee try to persuade him to drop a feature that shields his phone number from people with Caller ID.


After repeated refusals from the customer, the sales agent tried to sell him other features and a local toll calling plan. The customer endured six minutes of sales pitches before getting the address of a store where he could get a PacBell directory.

It was unclear what action the PUC would take. Its options include a separate review, ordering changes to PacBell’s sales practices or doing nothing.

Lester Wong, telecommunications advisor to PUC President Richard Bilas, said Thursday that he is familiar with the issue but had not yet read the report.

“It does have our attention,” Wong said.