Clear Rate denies allegation by AG’s office

By Chris Dickerson | Feb 20, 2014

CHARLESTON -- A Michigan telecommunications company denies allegations in a lawsuit recently filed against it by West Virginia Attorney General Patrick Morrisey.

Last month, Morrisey's office filed a lawsuit alleging Clear Rate Communications misrepresented who it was and then charged fees to customers when they tried to cancel their service.

In a response, Clear Rate says it complies with all federal and state regulations in obtaining a consumer’s consent to change providers. It says Clear Rate may be the only provider that implements a quality control process confirming customers have a full understanding of the sale.

Morrisey states his office “received a number of calls within a few months of Clear Rate starting service in the state.” Clear Rate’s says that number is 30 of more than 100,000 West Virginians marketed by Clear Rate. And of those 30 calls, it says only five involved allegations of confusion between Clear Rate and their former provider.

Also, Clear Rate says most of the complaints occurred after competitors ran effective negative publicity campaigns to create consumer fear and slow competition.

"Clear Rate has never experienced a single complaint about a Caller ID displaying 'Frontier," the company said in a statement to The West Virginia Record. "Clear Rate categorically denies this allegation and considers it a preposterous claim.

"Clear Rate fully discloses it is Clear Rate calling, it is a different telephone provider than Frontier and is actually competing for the consumer’s business. Clear Rate informs customers of the monthly charges including taxes and surcharges prior to initiating service. The focus on precisely how each and every charge is labeled and what section of the bill it appears is simply government overreach."

The company also claims it is being subjected to double jeopardy because the AG’s office "has decided to take on a matter that the West Virginia Public Service Commission has
already addressed."

Clear Rate says the PSC reviewed its marketing calls and stated in writing that, "[Staff] reviewed the Company’s [Clear Rate’s] sales script and TPVs [third party verifications], before determining there was no clear evidence that the Company had misled customers to switch services, as indicated by the questions asked on the TPV. ... Staff’s initial review of the TPV calls found no evidence of wrong doing on the part of the Company."

Clear Rate says its entry into the market has created competition that drives down
prices for West Virginians.

"Morrisey’s attempt to force Clear Rate to withdraw its services from West Virginia is exactly what the competition would like," the company states. "Clear Rate believes its competitors are encouraging former customers to claim misrepresentation which is artificially creating these issues.

"Clear Rate plans on vigorously defending itself and believes the facts will show no wrongdoing by Clear Rate.

"Ultimately, this case is about competition and the thousands of West Virginia residents who benefit from lower costs and better service. Even customers who do not switch benefit from more competitive prices as the existing provider now must reduce prices to retain customers.

Morrisey's lawsuit, which was filed in Kanawha Circuit Court, seeks to have the company prohibited from selling telecommunications services in the state. It also seeks to recover damages and penalties for thousands of consumers who enrolled with Clear Rate thinking they were signing up for service through Frontier Communications.

According to Morrisey's lawsuit, Clear Rate represented itself as Frontier when it solicited for customers. And it says when consumers attempted to cancel their Clear Rate service, they were told they would have to pay an early termination fee of $99. In addition, the suit alleges that Clear Rate improperly charged a carrier access fee and labeled it as regulatory taxes and surcharge.

Morrisey’s suit seeks restitution for the consumers, as well as reimbursement of the early termination fees and the misrepresented carrier access charges. The suit additionally seeks an order directing Clear Rate to close any and all of its West Virginia collection accounts so they have a zero balance and send notices to the credit agencies to remove any negative references on their customers’ records.

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