WorldCom Will Settle Suit With California
WorldCom Inc. will pay $8.5million to settle a lawsuit by California that claims the long-distance phone company used deceptive business practices to gain customers.
State Judge Alfred Chiantelli in San Francisco approved the settlement Thursday, allowing the state to receive $8.5 million in penalties and reimbursements to pay for its investigation.
Atty. Gen. Bill Lockyer and the state’s Public Utilities Commission sued WorldCom in July 2000, accusing the company of billing customers for additional services and switching their long-distance providers without permission.
“We expect this judgment will serve as an industry model and as a wake up call to other long-distance providers,” Lockyer said.
The settlement calls for Clinton, Miss.-based WorldCom to provide more information about rate restrictions and directory assistance fees in its advertising. Executives at WorldCom, the No.2 long-distance carrier after AT&T; Corp., weren’t available to comment.
Shares of WorldCom, which bought MCI Communications in 1998 to create MCI WorldCom and dropped “MCI” from its name in 2000, fell 24 cents to $8.40 on Nasdaq.
