Complaint against Cingular regarding non-communications billing practices
BEFORE THE PUBLIC UTILITIES COMMISSION OF
THE STATE OF CALIFORNIA
UTILITY CONSUMERS’ ACTION NETWORK )
(UCAN) )
Complainant, )
v. ) Case No.________________
)
PACIFIC BELL WIRELESS LLC dba CINGULAR )
WIRELESS LLC, U-3060, U-4135 and U-4314, )
and related entities collectively "CINGULAR") )
)
Defendant. )
__________________________________________ )
COMPLAINT AND REQUEST FOR CEASE AND DESIST ORDER AGAINST CINGULAR WIRELESS LLC FOR FAILURE TO FOLLOW COMMISSION RULES REGARDING NON-COMMUNICATION CHARGES
Pursuant to Section 1702 of the California Public Utilities Code (the "Code"), this complaint is brought and hereby filed by the Utility Consumers’ Action Network ("UCAN") against Pacific Bell Wireless LLC dba Cingular Wireless LLC, U-3060, U-4135 and U-4314, and related entities (collectively "Cingular") for failure to properly address disputed phone bill charges as required by Commission rules, specifically those found in the CPUC rules and regulations currently in force and detailed below.
INTRODUCTION
This complaint addresses Cingular’s practices relating to the provision and billing of non-communications services through its network. “Non–communications services” refer to various additional products offered for use on cellular phones by Cingular and numerous third party vendors, such as ring tones, joke a day programs, wallpaper, screensavers and other forms of software. Cingular has been systematically violating California statutes (such as Public Utilities Code Section 2890), California Public Utilities Commission (CPUC) Interim Decision 01-07-030 (Interim Order, Order Instituting Rulemaking on the Commission’s Own Motion to Establish Consumer Rights and Consumer Protection Rules Applicable to All Telecommunications Utilities, Decision 01-07-030 (July12, 2001)(“Interim Order”) and General Order 168 Part 4 in numerous ways.
Cingular has failed to provide customers with the required process, notice, opt-in requirements and proof of authorization necessary to impose non-communications charges on customers’ monthly bills, and has also failed to engage in the required investigations relating to non-communications charges that are a prerequisite to permitting such charges to be included on such bills. Cingular representatives consistently represent to Cingular customers with questions regarding non-communications service charges billed through their Cingular wireless phone bill that Cingular has no responsibility and cannot assist customers with their inquiries, violating numerous CPUC requirements and specific provisions of the Interim Order. Cingular’s practices are particularly troublesome with respect to minors, who are targeted by these third-party services advertising schemes and thereafter enabled by Cingular’s lack of safeguards, notice, and proof of authorization to enter into unlawful contracts with third party non-communications providers. The Legislature and CPUC envisioned the potential for just such risks, as evidenced in the Comment to Section C(1) of the Interim Order:
Because billing for non-communications-related charges on telephone bills was previously prohibited by law, many subscribers initially will be unaware that they are now exposed to a new risk of having unauthorized charges for non-communications-related products or services improperly placed in their telephone bills. The Legislature has acknowledged that additional safeguards are necessary to protect consumers from the risk of being “crammed” with charges that are unrelated to telephone service or other communications services. (See Stats 2000, ch 931 (AB 994).) Consumers should not be exposed to this risk unknowingly.
In the alternative, if the Commission were to find that these charges were for communications-related services, Cingular has ignored the consumer protections established by both the Legislature and the CPUC that prohibit cramming. Cingular’s current illegal practices are discussed below with specific reference to CPUC rules violated and proposed remedies.
I. THE PARTIES
1. Complainant UCAN is a consumer advocacy organization at 3100 Fifth Ave., Suite B, San Diego, CA 92103, (619) 696-6966, which represents approximately 40,000 ratepayers in California.
2. Defendant Cingular is a corporation currently doing business in the State of California as a provider of mobile telecommunications services. Cingular’s principal California offices are located at 4420 Rosewood Dr., 4th Floor, Pleasanton, CA 94588. Cingular is subject to the jurisdiction of the Commission.
3. Attorneys and representatives for UCAN include Michael Shames and Alan Mansfield.
4. Attorneys and representatives for Cingular are as follows:
STEEFEL, LEVITT & WEISS, P.C. ONE EMBARCADERO CENTER, 30TH FLOOR SAN FRANCISCO, CA 94111
GEORGE GRANGER Cingular Wireless4420 Rosewood Dr., 4th Floor,
Pleasanton, CA 94588
II. BASIC FACTS
5. The California Public Utilities Commission licenses Cingular Wireless as a facilities based Cellular Carrier (CEC), under license No. U-3060-C.
6. Cingular is certified by the California Public Utilities Commission to offer mobile cellular telecommunication services.
7. Cingular markets and sells such mobile services in the State of California.
8. Cingular provides its own non-communications services, as well as access and billing to third party non-communications services, to California customers.
9. Cingular allows third party non-communications charges to be billed directly on a subscriber’s monthly wireless bill.
10. Third party providers of non-communications services as described above include Jamster, Joke-A-Day, M-Qube, and Kargo and many others.
11. Cingular subscribers have the capability, through the use of SMS technology(also known as text messaging), of enabling third party non-communications services and accompanying charges to be provided to consumers by simply sending a text message through their mobile phone to the non-communications provider. UCAN has received a number of complaints from customers regarding this practice. For purposes of this complaint, UCAN offers the documented experiences of Ms. Cervantes’ and Mr. Newman’s cases, detailed below. UCAN has also intervened and has documented illegal responses by Cingular employees. For example, on July 15, 2005, Cingular customer service representative Antonia told UCAN investigators, as other Cingular representatives consistently have reiterated, that “as long as they have text messaging,” customers have enabled third party non-communications charges such as “ringtones, screensavers, wallpaper, and more.” She also stated that Cingular customers can be billed for non-communications charges from the beginning of their service with Cingular without specific authorization from that customer. These representations are contrary to the provisions of the Interim Order, which require Cingular obtain affirmative customer consent in advance and require Cingular to implement a specific and separate opt in protocol before such charges can be imposed on customer’s bills.
12. A number of these third party services advertise on television by providing codes and numbers to subscribers, who may them simply enter them into their Cingular phone to begin service. A significant number of these advertisements run on cable television channels targeting children and young adults. For example, Jamster runs ads for its ringtone services on cable television stations such as Nickelodeon. Such advertisements often claim to provide the subscriber with a free ring tone or other non-communications service product, without adequately or at all disclosing that such entities may subsequently enroll the subscriber into daily, weekly, or monthly payment programs.
13. Despite the mandates of the Interim Order, Cingular has intentionally configured its phones so that the use of SMS text messaging enabling non-communications services and third party non-communications charges, as well as Cingular’s own non-communication service Subscription Club, allow the user to simply text message a number, such as “2727” for Cingular’s Subscription Club, and then type “yes” in the text box, to enable non-communication services such as ringtones and screensavers.
14. A significant number of Cingular subscribers have purchased third party non-communications charges using SMS technology in the State of California.
15. A separate threat exists for pre-paid wireless phone plan subscribers. These plans allow the subscriber to pay the phone company up front for mobile cellular telephone service instead of paying for monthly service. Subscribers to pre-paid phone service have their pre-paid accounts debited automatically for non-communications charges, even though they have not knowingly authorized and are not on notice that non-communications charges may be billed through their pre-paid phone plans. UCAN believes that such customers may be subjected to these unauthorized charges without being informed of them.
III. Customer-Specific Facts Asserted
Diane Cervantes (See Exhibit A attached)
16. Ms. Cervantes’ 16 year-old daughter was using a phone that was part of Ms. Cervantes’ Cingular Wireless mobile plan. Ms. Cervantes’ daughter, sometime in January 2005, began downloading music, ringtones, and wallpaper on her Cingular phone from various third party non-communications services. These third party non-communications charges began being included by Cingular on Ms. Cervantes’ monthly bill for Jamster.com and m-Qube in late January 2005. Ms. Cervantes had not previously authorized or opted into being billed for such non-communications services through Cingular, as was a precondition for Cingular billing for such services under the Interim Order. Jamster.com charged her $5.99 for each of three monthly subscriptions going back to February, 2005, even though the advertisements Ms. Cervantes’ daughter responded to represented that she could download free ring tones from that website.
17. Ms. Cervantes called Cingular on March 10, 2005 to request that all text messages, internet and downloading services to her three phones be restricted. Cingular representatives told Ms. Cervantes that blocking of non-communications services was not available, even though under the Interim Order there is a specific way to do so that Cingular is required to implement.
18. Cingular also did not inform, nor has it subsequently ever informed Ms. Cervantes of her right under the Interim Order to have future non-communications charges removed from her wireless bill and to negate any “opt in” authorization that may have been improperly recorded for her plan.
19. Cingular did not offer, and subsequently never has offered, to provide any proof of authorization of Ms. Cervantes having opted in to permit authorization for either the specific charges in question or for general authorization to include non-communications charges on her wireless bill, as required by the Interim Order.
20. Ms. Cervantes’ daughter claims to have ceased making any non-communications charges in March, 2005.
21. When Cingular was not responsive to her requests and stated that she had to work directly with Jamster, Ms. Cervantes called Jamster in April 2005 After being transferred to three different representatives for over 45 minutes, she received a commitment from Jamster that it would credit her charges within two weeks. The credits never appeared on her Cingular bill. Three weeks after having received the commitment to credit such charges, Ms. Cervantes attempted to contact Jamster again. Ms. Cervantes tried twice a day for two weeks in a row, and was NEVER able to reach a representative.
22. Ms. Cervantes thereafter contacted Cingular again, on May 13, 2005, to dispute further charges by M-Qube, and was given credit for two charges and denied credit for four other charges..
23. Ms. Cervantes contacted Cingular again, on June 22, 2005, and with significant additional effort was able to obtain further credits, bringing her total credits to nearly $155. Ms. Cervantes requested that all future charges be removed and cancelled from her phone bill, but was told by Cingular representatives that Cingular did not know how to stop the non-communications charges. Upon receiving her next wireless bill, early July, 2005, Ms. Cervantes found over $6.00 in additional charges from third party non-communications providers. Ms. Cervantes called Cingular back again, asking if she would have to call back every month to dispute non-communications charges for the rest of her contract. Cingular told her they did “not know any other way ,” even though the Interim Order provides that Cingular must provide for an opt in requirement that was never invoked and can be revoked at any time.
Stephen Newman
24. Mr. Newman’s 12 year-old son was watching cartoons, when an advertisement appeared on the television offering a Joke-a-Day to be delivered to his cellphone. The son called the number using his Cingular phone and began to receive daily text message jokes from Blink Joke. Mr. Newman had not previously authorized or opted into the ability to receive and be billed for such services by Cingular, as was a precondition for Cingular billing for such services under the Interim Order.
25. Mr. Newman only discovered this unauthorized billing when his Cingular bill contained a charge for $0.99/day for this service. Mr. Newman called Cingular immediately to dispute such charges. He was put on hold repeatedly, only to be told by Cingular representatives said it was not their problem as they were “not the provider.” According to Cingular representatives, despite the requirements of the Interim Order Cingular was not responsible as it was just “passing through the bill.” Cingular gave Mr. Newman a contact number for Blink Joke that was not in service at the time, 800-303-1162. They also gave him a number to “cancel the service,” (866) 784-7712, but that the number had no representatives to assist Mr. Newman. Cingular did not provide Mr. Newman with any additional assistance or instructions, despite the requirements of the Interim Order. Mr. Newman’s invoice of 6/29/05 billed him for a Joke-a-Day for 27 days.
26. Cingular did not inform, nor has it subsequently ever informed, Mr. Newman of any right to have future non-communications charges removed from his wireless bill or that he could not be charged unless he affirmatively opted in or provided authorization for such billing, as required under the Interim Order.
27. Cingular did not offer, and subsequently never has offered, to provide any proof of authorization or that Mr. Newman had opted into being charged for either the specific charges in question or had provided general authorization to include non-communications charges on Mr. Newman’s wireless bill, as required by the Interim Order.
28. On July 7, 2005, Mr. Newman called Cingular Customer Care to dispute such charges. Mr. Newman was advised by UCAN on how to proceed with requesting non-communications charges, including Joke-A-Day charges, be removed from his wireless bill under the terms of the Interim Order. Mr. Newman disputed the non-communications charges and demanded to be opted out from future non-communication billings, or that any prior opt in that may have been erroneously recorded be cancelled. The Cingular Customer Service Representative (CSR) he spoke with offered him the phone number of the company placing the charges,, Mr Newman informed the representative that he did not want the phone number; rather, he wanted the disputed charges removed by Cingular and sent back to the billing company, as he would deal with the company directly about the disputed and unauthorized charges. Mr. Newman was placed on hold for the CSR to speak to someone else. The CSR returned and stated that the charges were valid since they could only have been incurred by using his phone.
29. Mr. Newman then, as instructed by UCAN, specifically mentioned CPUC rules, including the Interim Order, that require that he opt in before any on-communications charges could be placed on his bill, and that there was no record that he had opted in to permitting such charges. He was again placed on hold so that the CSR could speak to her supervisor. The CSR finally returned and said that no further charges would be billed due to his request, but he was still required to pay current charges. Mr. Newman asked to speak to the supervisor and was told he would have to wait an additional half an hour. Mr. Newman requested that the Supervisor call him. Finally, on July 8, 2005, the disputed charges were credited, but apparently only because he knew of the requirement of the Interim Order and informed the CSR of such requirements.
IV. VIOLATIONS OF LAW 30. In California, the CPUC has promulgated specific regulations regarding under what circumstances non-communications charges may be imposed on consumers’ wireless cell phone bills, and requiring the use of specific and separate opt in procedures before such charges may be imposed. The rules currently in effect are found in Order Instituting Rulemaking on the Commission’s Own Motion to Establish Consumer Rights and Consumer Protection Rules Applicable to All Telecommunications Utilities, Decision 01-07-030 (July 12, 2001), specifically the “Interim Opinion adopting Interim Rules Governing the Inclusion of Non-Communications-Related Charges In Telephone Bills,” and Appendix A “Interim Rules Governing Non-Communications-Related Charges on Telephone Bills” (Interim Rules) contained therein.
31. Though non-communications charges were previously prohibited from being charged to consumers through a telephone bill, the Legislature opened up telephone bills to non-communications charges early this century. Envisioning the potential for abuse, the Legislature authorized regulations in California Public Utilities Code Section 2890, which reads in part “(a) A telephone bill may only contain charges for products or services, the purchase of which the subscriber has authorized.”
32. The Interim Rules, closely tracking proposals for permanent rules under General Order 168, Part 4, put responsibility on the phone company to require specific authorization of any non-communication charge. As stated in the Interim Rules Section C, authorization is two pronged, requiring in Section C(1), general authorization from the customer to the phone company to allow non-communications charges on the customer’s bill, and in Section C(2), specific authorization at point of sale to allow the specific charge. According to the Interim Rules:
“An unauthorized charge is a non-communications-related charge included on a subscriber’s bill when the subscriber (1) has not authorized the billing telephone company, directly, to include non-communications-related charges on that subscriber’s bill; or (2) has not authorized that particular charge. A charge placed on the subscriber’s bill by a person who does not have actual, implied, or apparent authority to place such a charge, and which confers no benefit upon the subscriber, is an unauthorized charge.”
33. As stated in Interim Rule Section C(1)(a), “In obtaining authorization to bill for non-communications charges, billing telephone companies must disclose in a clear and conspicuous manner all material terms and conditions related to this service. Material terms and conditions include any applicable fees and charges, including late payment penalties and interest; any available options for limiting authorization (for example, to a dollar amount per month); how a subscriber may dispute a charge; the fact that the billing telephone company may not terminate basic local service, file an adverse credit report, or charge interest or finance charges on disputed amounts; how a subscriber may revoke authorization; and how a subscriber’s confidential information is protected. Cingular subscribers, such as Ms. Cervantes and Mr. Newman above, never were informed of any of the above requirements and options by Cingular, and in fact were provided with contrary information. Both learned of their accrued non-communications charges after the first bill with non-communications charges arrived. At this point, when a wireless subscriber receives a bill with non-communications charges, the damage is done. Cingular’s failure to follow CPUC rules has resulted in an as yet unknown amount of unauthorized charges for its subscribers.
34. As stated in Comment 2 to Section C(1)(a),
“Regardless of the manner in which written permission is given, billing telephone companies must provide sufficient information to enable consumers to make informed decisions about whether to allow non-communications charges on their telephone bills, and must abide by those decisions. (See § 2896.) They must disclose all material terms and conditions, and must not mislead subscribers in an effort to convince them to authorize the use of their telephone bill for non-communications-related charges. (See Id. and Business and Professions Code § 17500.) Companies that do so will be subject to sanctions by the Commission for violating the Public Utilities Code and these rules. Such practices may also lead to court-ordered penalties pursuant to California’s Unfair Competition Law (Business and Professions Code §§ 17200 and 17500).”
35. As stated in Comment 3 to Section C(1)(a), “ If a subscriber disputes a charge on the ground that the subscriber had not authorized the billing telephone company to include non-communication-related charges on the subscriber’s bill, the billing telephone company bears the burden of proving that the subscriber did in fact provide such authorization.”
Further, Section C(3) states “Subscribers may not be held liable for unauthorized charges. Subscribers must make a reasonable, good-faith effort to notify the billing telephone company promptly when the subscriber becomes aware of a probability of unauthorized use of the subscriber’s account. If the billing telephone company is unable to verify authorization, a charge is deemed unauthorized.”
Additionally, Section 2890 provides that a telephone bill “may only contain charges for products or services, the purchase of which the subscriber has authorized.” The comment to C(3) states that “this provision[2890] mandates a “zero-liability” rule for unauthorized charges.”
Subscribers such as Ms. Cervantes and Mr. Newman disputed the charges on their bills promptly after receiving notice of the charges and numerous times thereafter. They were uniformly told by Cingular representatives that Cingular had no responsibility for non-communications charges. However, pursuant to California law and Commission rules, Cingular had the responsibility to have proof of authorization available and the burden was on Cingular to provide proof of authorization to the customer. Yet Cingular has consistently failed and refused to do so. Cingular, instead, sent subscribers who disputed their charges to third party non-communications service providers whose contact phone numbers were either not working, were not reachable or failed to follow through with their promises, or who simply stated that they have no authority or ability (with the qualified exception of Jamster) to credit the subscriber for non-communications charges. Even when customers returned to Cingular customer service after talking to third party providers who stated they could do nothing, Cingular continued to pass the buck by claiming it had no responsibility for non-communications charges contained on its wireless bills, despite the requirements of the Interim Rules to the contrary.
36. Third party non-communications charges, as well as Cingular’s own non-communication service Subscription Club, allow the user to simply text message a number, such as “2727” for Cingular’s Subscription Club, and then type “yes” in the text box, to enable non-communication services such as ringtones and screensavers and any billing therefor. Without putting in place another clear opt-in authorization, this method of enabling non-communication services violates CPUC authorization rules by not providing sufficient notice that the customer’s bill is now capable of receiving non-communication charges. It is particularly troublesome because children are capable of easily enabling the service through text messaging without permission, theoretically opening up the entire bill for any non-communications charges, without having received legitimate advance opt in authorization by the parent customer.
37. As stated in Interim Rules Comment (1) to Section C(2), “The primary goal of Sections 2889.9 and 2890 and of these rules is to ensure that only authorized charges are billed to subscribers, i.e., to deter “cramming. Billing telephone companies, billing agents, and vendors all are responsible for ensuring that only authorized charges are billed.” This is contrary to Cingular’s consistent claim that it is not responsible for such charges.
38. As stated in Comment 2 to Interim Rules Section C(2), “Whatever the security procedure used, it should be at least as reliable as a PIN number, however. In the event a subscriber claims that a charge was unauthorized, the billing telephone company may not require the subscriber to pay the charge until the billing telephone company has obtained proof of proper authorization from the vendor or from the billing agent that submitted the charge for billing.” Allowing SMS text messaging to enable non-communications charges on a subscriber’s wireless bill ignores the CPUC’s requirement of providing safety measures equivalent to a PIN number and advance and separate opt in authorization.
39. In addition, any authorization, according to Interim Rule Section G(4), “is fraudulent if it is inauthentic (not given by the subscriber) or obtained from the subscriber based on false or misleading information.” Therefore, as the advertising and marketing of non-communications providers that targets children in part, and uses false or misleading claims of free services without disclosing material facts to the contrary, violates state laws governing engaging in fraudulent and misleading advertising and business practices. Subscribers must receive a refund for any charges related to any such marketing. Cingular has an independent obligation under these rules to determine if such third parties are engaging in disseminating false and misleading information, and must take appropriate action if they are. Cingular is failing and refusing to satisfy that obligation.
40. As stated in Interim Rule Section C(1), “Opt-in authorization information or confirmation, including any assigned or confirmed PIN, must be sent to the subscriber’s billing address even if the authorization lists a different address for delivery of products or services.” Neither Ms. Cervantes nor Mr. Newman ever were given separate notice that they had opted-in to authorize non-communications charges on their wireless bills, not even after they incurred their first non-communications charges through their wireless bills. Indeed, as stated above, Cingular representatives consistently stated that a subscriber is generally opted in to such programs automatically when their service plan begins. However, even if Cingular were to claim that subscribers do somehow generally authorize non-communications charges despite the specific requirements of the Interim Rules, Cingular is still failing to fulfill the CPUC’s requirement that notice be sent to the billing address to make subscribers aware they are subject to non-communications charges on their wireless bills.
41. Cingular is also failing to respond to customer requests to be opted out of non-communications charge authorization, as required by law. As stated in the Interim Rules Section D(1) and General Order 168 Part 4 §D,
“Subscribers may revoke authorization to allow non-communications charges on their bills at any time without charge. They may do so by notifying their billing telephone company, by telephone, in writing, or via the Internet, that they no longer wish to allow non-communications charges on their telephone bill. The billing telephone company must confirm the revocation in writing within 10 business days. This written confirmation shall indicate the date and time the subscriber notified the billing telephone company that authorization was revoked. Billing telephone companies must allow subscribers to revoke authorization by telephone 7 days a week, 24 hours a day. The right to revoke authorization to allow charges includes charges from standing authorizations previously made by the subscriber, such as charges for monthly dues or subscription service. This right is in addition to any other right that the subscriber may have to cancel the transaction that gave rise to the billing charge.”
Customers such as Ms. Cervantes and Mr. Newman called numerous times and talked to numerous Cingular CSRs about dropping charges from their bill and blocking such charges in the future, with either no or limited success. When the customers asked for non-communications services to be blocked, Cingular should have had its CSRs properly trained to block future non-communications charges. Indeed, even while Ms. Cervantes received a credit in late June for her non-communications charges, her request at the same time (as she had requested in the past) to not have any future charges on her wireless bill was ignored, resulting in additional charges in July 2005. Worse, she was told that nothing could be done, despite the law to the contrary. Cingular has failed to provide the ability to opt-out for subscribers “7 days a week, 24 hours a day.” Cingular’s claims to subscribers that it can do nothing about charges currently on the bill are not true for monthly and subscription charges, as the applicable CPUC rules clearly allow subscribers to remove monthly and subscription charges, and Cingular failed to let subscribers do so unless they apparently make specific reference to such rules.
The comment to Interim Rules, Section D(1) states that “As with credit cards, the consumer must be able to revoke authorization at any time to protect the subscriber in the event of attempted fraudulent use of the subscriber’s account. As subscribers cannot be held liable for unauthorized charges, this provision protects the billing telephone company as well.” This is particularly applicable to cases in which children under 18 have signed up for non-communications services without parent permission based on advertisements targeting such minors .
42. Revocation can be provided by consumers by simply notifying the telephone company over the telephone; a writing is not necessary. This rule also suggests that a properly addressed email could also revoke authorization of non-communication charges. Even if she had originally authorized non-communications charges (which she disputes), Ms. Cervantes was not informed of her right to revoke authorization, despite her inquiries, and in fact was uniformly provided false and misleading information to the contrary, as was Mr. Newman.
43. As stated in Interim Rules E(1), “Billing telephone companies must take reasonable precautions to screen vendors and billing agents before agreeing to provide billing services for them, in order to screen out unreliable or untrustworthy business entities.” It is telling that most other wireless companies do not do business with many of the companies that Cingular allows to bill subscribers for non-communications charges through its wireless bills. For example, T-Mobile is the only other company known to use Jamster as a non-communications provider.
44. As stated in Interim Rules E(3):
“Contracts to provide billing services for vendors and billing agents must provide that the billing telephone company will require proof of authorization for all charges disputed by subscribers, including but not limited to the nature, time, place and fact of the authorization; the nature, qualities and price of the product or service; and other charges of any and every kind, such as taxes, charges for other products and services, shipping expenses, interest, and penalties; and the legal basis for any such charge, and that without such proof, the subscriber will be credited for the charge and the corresponding amount withheld from the vendor or billing agent. Billing telephone companies may impose fees on these vendors and billing agents for the cost of investigating and resolving subscriber complaints.”
This means that Cingular, according to CPUC rules, must require proof of authorization from third party non-communications providers prior to biling consumers for such charges. To compensate for its additional responsibilities, CPUC rules state that Cingular can also charge vendors and billing agents for the cost of investigating and resolving subscriber complaints. Instead of complying with these legal requirements, Cingular refuses to meet its burden to subscribers regarding non-communications charges.
45. Cingular has additional duties to monitor third party non-communications providers that it has failed to fulfill. As stated in Interim Rules Section E(4)
“Billing telephone companies must monitor the performance of the vendors and billing agents for whom they provide billing services, promptly investigate subscribers’ complaints, whether written or verbal, of unauthorized charges and other billing errors, and promptly suspend billing on behalf of a vendor or billing agent whose charges are generating a significant percentage of complaints (over five percent in two out of three consecutive months), or if the billing company has any other reason to believe unauthorized billings are being presented to it. A billing telephone company may resume billing for a vendor or billing agent after investigating the alleged billing errors, if it has determined that the problem(s) underlying the errors have been resolved.”
Cingular, instead of promptly investigating subscribers’ complaints as required by the law, disavows any responsibility and merely pushes subscribers over to third party providers of non-communications services.
46. The CPUC has the ability to request and review complaints to Cingular regarding non-communications charges. As stated in Section E(5) “Billing telephone companies must keep records of all subscriber complaints, both written and verbal, of unauthorized non-communications charges and other billing errors related to those charges for at least four years, and be able to categorize those complaints by vendor and by billing agent. Billing telephone companies will make this complaint information available to Commission staff or the California Attorney General upon request.”
The comment to this section encourages further deterrents to cramming, stating that:
“…billing telephone companies are encouraged to consider including escalating fee provisions in their contracts with billing agents and vendors, so that those vendors whose charges generate a large number of complaints quickly suffer financial consequences. The purpose of such provisions is to make cramming unprofitable for vendors and billing agents, thereby eliminating the incentive to engage in the practice and reducing the harm to consumers, as well as the number of complaints addressed to billing telephone companies and the Commission.”
Cingular has done nothing to discourage the third party providers it bills for from cramming charges on subscribers’ wireless bills, despite receiving a great number of complaints about such companies. Cingular, on the other hand, has enabled and encouraged such cramming practices by falsely stating to subscribers that it can do nothing for subscribers regarding non-communications charges.
47. In addition to authorization and notice requirements, Cingular has responsibilities to investigate a customer’s inquiry regarding non-communication charges and bears the burden of showing those charges are authorized and that the separate opt – in requirements have been fulfilled, as well as the responsibility of presenting proof of authorization to the customer, eliminating/crediting non-communication charges for which Cingular has insufficient proof, and removing future charges from the bill upon customer request.
48. Even assuming Cingular maintains a record of sufficient separate authorization, which does not exist based on Cingular’s described method of practice, Cingular is not meeting its responsibilities to handle complaints, provide proof of authorization for charges, remove charges for which there is insufficient proof, and block and remove future charges once a customer revokes a prior opt-in authorization.
49. When a customer calls Cingular inquiring about non-communication charges, Cingular has a duty under Interim Rule Section G(1) and General Order 168 part 4 Sections (E) & (G) to do more than simply tell the customer to talk to the third party service provider.
50. Under the Public Utilities Code §2895-2897 et seq. (Telecommunications Customer Service Act of 1993), the Legislature authorizes the CPUC, specifically in §2896(c), to establish reasonable quality service standards, including standards regarding customer service and billing.
Interim Rule Section G(3) states that
“The billing telephone company is responsible for ensuring that subscriber complaints about non-communication charges on its bills are processed as required by these rules. Subscriber questions and complaints concerning non-communications-related charges should be addressed to the billing telephone company, or to its agent, as designated on the bill. The telephone bill must include a prominently displayed toll-free customer service number for this purpose. The toll-free number must be adequately staffed by personnel with sufficient training and authority to answer questions, investigate complaints, and adjust bills in favor of subscribers when appropriate.
Telephone carriers such as Cingular are required to provide adequate customer service as a telecommunications provider (see the Telecommunications Customer Service Act of 1993, codified at Sections 2895-2897). They must ensure that the additional customer service required of them in connection with non-communications charges does not negatively impact telephone customer service.
This provision does not envision a wireless provider consistently passing the buck by simply providing subscribers with phone numbers to third parties who are either consistently unavailable or incapable of handling the non-communications charge inquiry. Indeed, third parties such as m-Qube, Kargo, and Joke-A-Day, when contacted, state that they have no authority to adjust a subscriber’s billing. They are trained to send the subscribers in a loop, back to Cingular customer service, who in turn states that it is the third party’s responsibility. The numbers provided for these third parties is NOT what the Legislature and CPUC envisioned. The legislature and CPUC envisioned a specific phone number with trained personnel who are authorized to handle complaints regarding non-communications charges. Neither Cingular’s customer service phone number nor the phone numbers of these third parties meets this requirement.
51. Customers are correct in calling Cingular under G.O. 168 §G(1), which states that “subscriber questions and complaints concerning non-communications-related charges should be addressed to the billing telephone company.” The telephone bill must include “a prominently displayed toll-free customer service number for this purpose[non-communications charges],” and the “number must be adequately staffed by personnel with sufficient training and authority to answer questions, investigate complaints, and adjust bills in favor of subscribers when appropriate.”
Cingular is not meeting any of these requirements. Cingular does at least display the non-communications charges with a number for the third party service provider. However, as stated above these phone numbers are largely useless, and there does not appear to be any prominently displayed telephone number that has the stated purpose of handling non-communication charge inquiries.
52. Even if the general Cingular customer service number is considered to be the non-communication charge inquiry phone number, staff at this number appear to be inadequately trained in the responsibilities of Cingular regarding non-communications charges and the requirements imposed by CPUC requirements and the Interim Order. By way of example, Ms. Cervantes, inquiring about her non-communications charges and requesting immediate disabling of non-communication features, was immediately told to call third party non-communications provider Jamster, without the additional service and investigation required, as discussed above. Mr. Newman was initially provided similar information.
53. Under Interim Rule E(3) and General Order 168, Section E(3), Cingular has the responsibility to do more than direct customers to the third party non-communications providers. Section E(3) reads, as stated above:
“Contracts to provide billing services for vendors and billing agents must provide that the billing telephone company will require proof of authorization for all charges disputed by subscribers, including but not limited to the nature, time, place and fact of the authorization; the nature, qualities and price of the product or service; and other charges of any and every kind, such as taxes, charges for other products and services, shipping expenses, interest, and penalties; and the legal basis for any such charge, and that without such proof, the subscriber will be credited for the charge and the corresponding amount withheld from the vendor or billing agent. Billing telephone companies may impose fees on these vendors and billing agents for the cost of investigating and resolving subscriber complaints.”
The CPUC intended to make non-communications charges on telephone bills possible, while ensuring that customers were protected from the very real possibility of cramming of charges on these bills. This means that the telephone company, in this case Cingular, is enlisted by the CPUC in this effort to protect the customer from the abuse of non-communication charges. Cingular benefits financially from its arrangement with Jamster and other third party non-communications providers, and with this benefit the CPUC imposes the responsibility and clearly gives Cingular the authority, under section E(3) to cancel any charges for which Cingular lacks proof of authorization as detailed above.
At the very least, Cingular is required by law to have authorization on file for each non-communications charge, to provide such information to any customer who inquires about non-communication charges. Cingular simply fails to maintain such information. Additionally, section E(3) requires that if Cingular cannot provide this proof of authorization, they are required to credit the charge to the customerand withhold payment to the third party. Cingular has failed to do so.
54. As stated in Interim Rule G(2), “Billing telephone companies or their agents shall promptly investigate subscribers’ complaints of billing errors. Within 30 days of receiving a complaint of a billing error unrelated to the subscriber’s telephone service, the billing telephone company must either credit the disputed charge to the customer or acknowledge, in writing, receipt of the complaint, and must verify the validity of the charge. Billing telephone companies must resolve such complaints within 60 days.”
As stated in Interim Rule G(4), “The billing telephone company or, if the vendor is handling the complaint, the vendor, will notify the subscriber in writing of the result of its investigation. If the vendor has failed to provide proof of authorization within the time allowed, the billing telephone company will credit the charge to the subscriber.”
As an example of how Cingular systemically violates these provisions, Cingular never offered Ms. Cervantes or Mr. Newman proof of authorization, and also never subsequently credited their accounts within 30 days.
55. In the event that the Commission determines that these charges are communications-related, Pub. Util. Code § 2890(a) states that “ A telephone bill may only contain charges for products or services, the purchase of which the subscriber has authorized.” Also, Pub. Util. Code § 2890(e) states that “If an entity responsible for generating a charge on a telephone bill receives a complaint from a subscriber that the subscriber did not authorize the purchase of the product or service associated with that charge, the entity, not later than 30 days from the date on which the complaint is received, shall verify the subscriber's authorization of that charge or undertake to resolve the billing dispute to the subscriber's satisfaction.” Cingular systematically failed to adhere to these “cramming” rules in its treatment of Ms. Cervantes, Mr. Newman and other affected customers.
V. RELIEF SOUGHT
WHEREFORE, UCAN respectfully request that the Commission:
1. Order Cingular to immediately cease and desist from each and every violation alleged in paragraphs 15 through 55 effective upon receipt of this complaint through the issuance of an injunction.
2. Order Cingular to undertake such steps as are necessary so as comply with state law.
3. Order Cingular to make and pay any and all reimbursements and penalties available under Code Sections 2107, 2108 and 2113 to similarly situated customers..
5. Order Cingular to pay commensurate punitive damages upon finding of intentional misconduct.
6. Order all other remedies and penalties and cost as the Commission may determine just and equitable.
Respectfully submitted, Dated: July 20, 2005
_________________________
Michael Shames
Alan Mansfield
Utility Consumers’ Action Network (UCAN)
3100 5th Ave. Suite B
San Diego, CA 92103
(619) 696-6966
Fax: 696-7477
mshames [at] ucan [dot] org
ATTORNEYS for Complainant
Verification
I, Michael Shames, am an officer of complainant corporation herein, and am authorized to make this verification on its behalf. The statements in the foregoing document are true and of my own knowledge, except as to the matters which are herein stated on information and belief, and as to those matters I believe them to be true. I declare under penalty of perjury that the forgoing is true and correct. Executed on July 20, 2005 at San Diego, California.
_____________________
Michael Shames, Declarant
| Attachment | Size |
|---|---|
| Cingular ringtone complaint 7-20-05.doc | 71.5 KB |
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Energy Billing Fraud Charges vs Multiut owned by Nachshon Draima
Energy Billing Fraud Charges vs Multiut owned by Nachshon Draiman!
Multiut Admitted to holding money belonging to customers
Chicago Metro Area Consumers are taken for a ride by Multiut – Nachshon Draiman – Energy Billing fraud
In a Class Action proceeding initiated in November 2001 - The case after numerous delays by Multiut, is now proceeding.
Gore vs Multiut - IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS Case No. 01 CH 19688
Posted on September 21st, 2007:
IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS
COUNTY DEPARTMENT - CHANCERY DIVISION
FILED
JACK GORE on behalf of himself and all ) NOV 28, 2002
other persons or entitles similarly situated, |
•
vs. No. 01 CH 19688
DOROTHY 8ROWN CLERK OF CIRCUIT COURT
MULTIUT CORP, an Illinois corporation, } Judge Stephen A, Schiller
Defendant ) Courtroom 2402
RESPONSE TO §2-619.1 MOTION TO DISMISS J/
Plaintiff JACK GORE (“Gore”). by his attorneys LARRY D DRURY LTD., hereby responds to the Motion to Dismiss 2nd Amended Complaint, pursuant to 735 ILCS 5/2-615 and 619, brought as a combined 2-619.1 motion by defendant MULTIUT CORP. (“Multiut”).
Introduction
Multiut is trying to time-bar this case by transforming express a written agency-service contract drafted by Multiut into a contract for sale of goods, and by disputing Gore's allegations as to concealment and discovery of the wrong – but without submitting any Rule 191 affidavit or documentation. This is a class action arising out
of a written contract drafted by Multiut, attached here and to the 2nd Amended Complaint as Exhibit A and B collectively referred to herein as the "contract" or "agreement “ unless otherwise indicated by context): (1)
(A) A service contract to act as Gore's "purchasing representatives" in obtaining natural gas from “off system" suppliers. This contract, entered into on or about December 1990, was titled “Agreement," Exh. A 1, 3-6, 10. And,
{B} A series of supplemental agency contracts to act as Gore’s agent, in so doing with respect to various Properties. These were entered into contemporaneously with the service contract and thereafter, and titled "Natural Gas Purchasing and Agency Agreement.” Exh.-B. (2)
(1) Similarly Multiut refers to them collectively as “the agreement” in its brief (Mem. p. 2, fn. 1). Although the documents are on separately filed pages, they are mutually inclusive and one could not be entered into without the other; e.g. the service contract refers to and incorporates the agency contracts, wherein Multiut refers to itself as Gore's 'exclusive natural gas purchasing agent'. See Exh. A, third introductory paragraph and 16-17; Exh. B 1,
(2) Exh. 8 one of the series, is dated 1998, Exh. C is Gore’s §2-806 affidavit as to the others. Gore has stated he does not have a copy of each, they are inaccessible to him i.e. no longer in his possession, whether missplaced or otherwise, and cannot be located or returned. 2nd Amd.. Compl. {4; Exh, C, in the 1st Amd. Complaint, Count 4 for breach of oral contract was voluntarily dismissed without prejudice after Gore's deposition of May 8,- 2002, when the service contract and the 1998 agency contract were produced by Multiut and adequately established, Exhs, A-B are the same Exhs. 1-2 attached to the Gore transcript, excerpts of which are attached herein as Exh. D, Similarly the missing agency agreements are likely in Multiut’s possession and will be produced in discovery.
The contract was drafted by Multiut, it unequivocally defines Multiut's role in the transactions, and shows that this case is not governed by the UCC. What is at issue here is not the "good" that Multiut obtained for Gore, but the service Multiut provided as his purchasing agent. Gore is suing upon the service and agency contract – not the natural gas - and has alleged that Multiut breached its duties in two respects;
{1} By falsely and intentionally charging and retaining for its own use funds that were to be applied to a City of Chicago 8% gross receipts tax (“Tax”), which it had promised would be placed in escrow and forwarded to the City. Between December 1990 and January 1995 (after the City of Chicago changed the Tax), Multiut collected approximately $14,000 from Gore and at least $1 million to $1.5 million from the Class, for this Tax that was not actually imposed upon Multiut. 2nd Amd. Compl. 7-9, '3! Multiut not only failed to inform Plaintiff and
the Class that the money collected was not so applied or escrowed, but also failed to escrow, account for, and refund the funds with interest.
(2) By overcharging for the service of providing natural gas. Multiut was to charge for natural gas actually supplied to Gore and the Class on a set per therm cost basis, plus an amount equal to 1/2 of their respective per therm cost savings per month, instead, Multiut overcharged and billed Gore at least $100.000 and the class millions of dollars and refuses to provide an accounting and refund with interest. Id. 10-11.
Gore has further alleged that Multiut prevented him from discovering the wrongs by intentionally concealing them until at least December 2000, when he discovered the truth and could not reasonably have done so earlier. (Gore testified at his deposition on May 8, 2002 that he first discovered the discrepancies in his bills, the overcharges, the taxes, and failure to escrow the taxes, in December 2000. See Exh, D, pp. 25-28,) Thereafter he was unable to obtain any refund and based thereon, terminated Multiut’s services on or about June 2001, However, the wrongful acts are continuing to date, in that Multiut continues to 'refuse to provide an accounting and refund with interest to Gore and the Class, all to their detriment and damage. They seek imposition of constructive trust (id. 22), an accounting and damages in not less than the foregoing amounts plus interest (id, 9-13, 23).
Gore filed the original Class Action Complaint on Nov. 20, 2001, and in lieu of responding to a motion to dismiss, filed the 1st Amended Class Action Complaint Feb. 14, 2002, setting forth 4 counts for (1) breach of
3-: The City did not and will not collect the 8% Tax, presumably because of U.S. constitutional restrictions as to the interstate commerce clause and exceptions for interstate pipelines and out-of-state suppliers. As a result in 1994 the City changed the tax from an 8% gross receipts tax to a flat rate tax of 1.4 to 1.5 cents per therm. 2nd Amd. Comp. P 8. in Multiut’s response to First Request to Admit {attached hereto as Exh. F), it has admitted the following statements about this Tax; (8) that Multiut collected approximately $14,000 in Tax from Gore between 1991-1994; and (9) that Multiut spent its customers Tax payments on business expenses.. Yehuda Draiman testified to the same effect in his deposition 1-10-02 See transcript excerpts attached hereto as Exh. E, at pp, 36-37,40, 68, and Exh, 6 thereto.
Activity Date: 8/15/2007 Participant: GORE JACK
CASE SET ON STATUS CALL
Court Date: 8/29/2007
Court Time: 0930
Court Room: 2402
Judge: BRONSTEIN, PHILIP L.
August 30th, 2007 at 2:25 pm
RE: MULTIUT CORP. FORMER CUSTOMERS!
Multiut owner is Nachshon Draiman of Cook County, Illinois
PLEASE BE ADVISED THAT YOU ARE PROBABLY DUE A REFUND PLUS INTEREST FOR SALES TAX ON NATURAL GAS WHICH WAS COLLECTED FROM YOU AND WITHHELD BY MULTIUT CORP. TEL # 847-982-0030 at 7514 N. Skokie Bl. Skokie, Illinois.
MULTIUT IS HOLDING APPROXIMATELY OVER ONE MILLION DOLLARS THAT MAY BELONG TO CUSTOMERS.
MULTIUT HAS OVERBILLED CUSTOMERS ON SHARED SAVINGS FOR THE PAST 14 YEARS.
THERE IS CURRENTLY A CLASS ACTION SUIT AGAINST MULTIUT.
I STRONGLY SUGGEST THAT YOU HAVE ALL YOUR BILLS THAT WERE ISSUED BY MULTIUT CORP. AUDITED THOROUGHLY THERE MAY BE STORAGE CREDITS DUE YOU AND ERRORS IN BILLING WHICH CREDITS MAY BE DUE YOU.
Multiut has admitted in Court that they are holding the money.
Gore vs Multiut 01 CH 19688 Circuit Court of Cook County, Illinois
A concerned citizen
For honesty in billing
Dynegy Mkg & Trade v. Multiut Corp, Nachshon Draiman et al
On August 16th, 2007:
Dynegy Mkg & Trade v. Multiut Corp, Nachshon Draiman et al 1:02-cv-07446.
Multiut Corp and Nachshon Draiman dba Future Associate of Skokie, IL. are withholding evidence of fraudulent activities in the Energy industry and inflated Medicaid billing to the government for Nursing Home patients. Also Bank fraud against their bank by presenting fraudulent and inflated receivable reports in order to get and keep a credit line, Nachshon Draiman was a large stock holder of the bank. Draiman Nachshon • SC 13G • Success Bancshares Inc • On 2/17/98
Filed On 2/17/98 • SEC File 5-53545 • Accession Number 950137-98-586
Court: United States District Court Northern District of Illinois -
Case Title: Dynegy Mkg & Trade v. Multiut Corp, Nachshon Draiman Future Associates et al
Case Number: 1:02-cv-07446
Judge: Hon. John A. Nordberg
Filed On: 10/16/2002
SUMMARY
Case Number: 1:02-cv-07446
Referred To: Honorable Michael T. Mason
Jury Demand: Defendant
Demand: $9999000
Nature of Suit: Contract: Other (190)
Jurisdiction: Diversity
Cause: 28:1332 Diversity-Breach of Contract
Case Updated: 01/20/2005
NAMES
Party Name: Multiut Corporation an Illinois Corporation,
Party Type: Defendant
Attorney(s): Paul Thaddeus Fox
(312) 456-8400
Firm Name: Greenberg Traurig, LLP.
Firm Address: 77 West Wacker Drive
Suite 2500
Chicago, IL 60601
Alan Jay Mandel
847-329-8450
Firm Name: Alan J Mandel Ltd
Firm Address: 7520 North Skokie Blvd
Skokie, IL 60077
03/30/2007 225
NOTICE of Motion by Ira P. Gould for presentment of motion to withdraw as attorney224 before Honorable John A. Nordberg on 4/19/2007 at 02:30 PM. (Gould, Ira) (Entered: 03/30/2007)
04/18/2007 226
MINUTE entry before Judge John A. Nordberg: Motion of Ira Gould to withdraw his appearance on behalf of Multiut Corporation 224 is granted. The motion will not be heard on 4/19/07 as noticed. Mailed (vmj, ) (Entered: 04/19/2007).
See: www.antidefamationusa.com or www.antidefamation.us
Gore vs. Multiut Corp. - IN THE CIRCUIT COURT OF COOK COUNTY, IL
IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS
COUNTY DEPARTMENT - CHANCERY DIVISION
FILED
JACK GORE on behalf of himself and all ) NOV 28, 2002
other persons or entitles similarly situated, |
•
vs. No. 01 CH 19688
DOROTHY 8ROWN CLERK OF CIRCUIT COURT
MULTIUT CORP, an Illinois corporation, } Judge Stephen A, Schiller
Defendant ) Courtroom 2402
RESPONSE TO §2-619.1 MOTION TO DISMISS J/
Plaintiff JACK GORE (“Gore”). by his attorneys LARRY D DRURY LTD., hereby responds to the Motion to Dismiss 2nd Amended Complaint, pursuant to 735 ILCS 5/2-615 and 619, brought as a combined 2-619.1 motion by defendant MULTIUT CORP. (“Multiut”).
Introduction
Multiut is trying to time-bar this case by transforming express a written agency-service contract drafted by Multiut into a contract for sale of goods, and by disputing Gore's allegations as to concealment and discovery of the wrong – but without submitting any Rule 191 affidavit or documentation. This is a class action arising out
of a written contract drafted by Multiut, attached here and to the 2nd Amended Complaint as Exhibit A and B collectively referred to herein as the "contract" or "agreement “ unless otherwise indicated by context): (1)
(A) A service contract to act as Gore's "purchasing representatives" in obtaining natural gas from “off system" suppliers. This contract, entered into on or about December 1990, was titled “Agreement," Exh. A 1, 3-6, 10. And,
{B} A series of supplemental agency contracts to act as Gore’s agent, in so doing with respect to various Properties. These were entered into contemporaneously with the service contract and thereafter, and titled "Natural Gas Purchasing and Agency Agreement.” Exh.-B. (2)
(1) Similarly Multiut refers to them collectively as “the agreement” in its brief (Mem. p. 2, fn. 1). Although the documents are on separately filed pages, they are mutually inclusive and one could not be entered into without the other; e.g. the service contract refers to and incorporates the agency contracts, wherein Multiut refers to itself as Gore's 'exclusive natural gas purchasing agent'. See Exh. A, third introductory paragraph and 16-17; Exh. B 1,
(2) Exh. 8 one of the series, is dated 1998, Exh. C is Gore’s §2-806 affidavit as to the others. Gore has stated he does not have a copy of each, they are inaccessible to him i.e. no longer in his possession, whether missplaced or otherwise, and cannot be located or returned. 2nd Amd.. Compl. {4; Exh, C, in the 1st Amd. Complaint, Count 4 for breach of oral contract was voluntarily dismissed without prejudice after Gore's deposition of May 8,- 2002, when the service contract and the 1998 agency contract were produced by Multiut and adequately established, Exhs, A-B are the same Exhs. 1-2 attached to the Gore transcript, excerpts of which are attached herein as Exh. D, Similarly the missing agency agreements are likely in Multiut’s possession and will be produced in discovery.
The contract was drafted by Multiut, it unequivocally defines Multiut's role in the transactions, and shows that this case is not governed by the UCC. What is at issue here is not the "good" that Multiut obtained for Gore, but the service Multiut provided as his purchasing agent. Gore is suing upon the service and agency contract – not the natural gas - and has alleged that Multiut breached its duties in two respects;
{1} By falsely and intentionally charging and retaining for its own use funds that were to be applied to a City of Chicago 8% gross receipts tax (“Tax”), which it had promised would be placed in escrow and forwarded to the City. Between December 1990 and January 1995 (after the City of Chicago changed the Tax), Multiut collected approximately $14,000 from Gore and at least $1 million to $1.5 million from the Class, for this Tax that was not actually imposed upon Multiut. 2nd Amd. Compl. 7-9, '3! Multiut not only failed to inform Plaintiff and
the Class that the money collected was not so applied or escrowed, but also failed to escrow, account for, and refund the funds with interest.
(2) By overcharging for the service of providing natural gas. Multiut was to charge for natural gas actually supplied to Gore and the Class on a set per therm cost basis, plus an amount equal to 1/2 of their respective per therm cost savings per month, instead, Multiut overcharged and billed Gore at least $100.000 and the class millions of dollars and refuses to provide an accounting and refund with interest. Id. 10-11.
Gore has further alleged that Multiut prevented him from discovering the wrongs by intentionally concealing them until at least December 2000, when he discovered the truth and could not reasonably have done so earlier. (Gore testified at his deposition on May 8, 2002 that he first discovered the discrepancies in his bills, the overcharges, the taxes, and failure to escrow the taxes, in December 2000. See Exh, D, pp. 25-28,) Thereafter he was unable to obtain any refund and based thereon, terminated Multiut’s services on or about June 2001, However, the wrongful acts are continuing to date, in that Multiut continues to 'refuse to provide an accounting and refund with interest to Gore and the Class, all to their detriment and damage. They seek imposition of constructive trust (id. 22), an accounting and damages in not less than the foregoing amounts plus interest (id, 9-13, 23).
Gore filed the original Class Action Complaint on Nov. 20, 2001, and in lieu of responding to a motion to dismiss, filed the 1st Amended Class Action Complaint Feb. 14, 2002, setting forth 4 counts for (1) breach of
3-: The City did not and will not collect the 8% Tax, presumably because of U.S. constitutional restrictions as to the interstate commerce clause and exceptions for interstate pipelines and out-of-state suppliers. As a result in 1994 the City changed the tax from an 8% gross receipts tax to a flat rate tax of 1.4 to 1.5 cents per therm. 2nd Amd. Comp. P 8. in Multiut’s response to First Request to Admit {attached hereto as Exh. F), it has admitted the following statements about this Tax; (8) that Multiut collected approximately $14,000 in Tax from Gore between 1991-1994; and (9) that Multiut spent its customers Tax payments on business expenses.. Yehuda Draiman testified to the same effect in his deposition 1-10-02 See transcript excerpts attached hereto as Exh. E, at pp, 36-37,40, 68, and Exh, 6 thereto.
Activity Date: 8/15/2007 Participant: GORE JACK
CASE SET ON STATUS CALL
Court Date: 8/29/2007
Court Time: 0930
Court Room: 2402
Judge: BRONSTEIN, PHILIP L.
Jay Drai AKA Yehuda "Jay" Draiman" wrote on August 8th, 2007
malicious, false, meritless, and contrived. These baseless accusations are the fabrications of a disgruntled former employee, Yehuda "Jay" Draiman, a convicted felon who has been found guilty of charges leading to millions of dollars in judgments by the Illinois and federal court system.
Left with no legal or rational alternative, "Jay" has resorted to conjuring up false stories and contrived meritless accusations on the internet and public forums, to attempt to smear his former employer.
These facts can be verified by court records available from a Google search for "Multiut v. Yehuda".
Yehuda Jay Draiman is a former employee who was terminated in 2001 from Multiut Corporation when he was discovered diverting clients and funds of the company. He was subsequently found guilty of breaches of fiduciary duty, consumer fraud and deceptive trade practices and conspiracy, and a judgment in excess of $1.5 million was entered against him, in addition to several findings of contempt, by the Cook County Circuit Court & upheld by the Appellate court (ruling 1-03-0857).
http://www.state.il.us/court/Opinions/AppellateCourt/2005/1stDistrict/Ju...
Federal courts have also entered subsequent judgments against Yehuda and his wife Miriam for committing false bankruptcy filings in yet another attempt to defame his former employer. Federal courts declared the judgments to be non-dischargeable due to the fraud involved by Yehuda Draiman, for abusing the court system in a manner similar to the way he now attempts to abuse the internet. These facts can be verified by federal court records available from a Google search for "Doyle Draiman".
http://www.ilnb.uscourts.gov/JudgeDoyle/Opinions/Draiman_Yehuda.pdf
Public documents verify that 'Jay' was also convicted of 10 counts of wire and mail fraud during the 1980's. Nachshon, Yehuda’s brother, originally provided Yehuda with a job in the Multiut company subsequent to general assistance he provided to help Yehuda and his family following Yehuda‘s first stint of a four year sentence to the federal penitentiary for that conviction in the 80's. See United States v. Draiman, 784 F.2d 248 (7th Cir. 1986)
http://caselaw.lp.findlaw.com/data2/circs/7th/023922p.pdf
Yehuda Draiman was also the subject of a special investigation conducted by the Illinois Legislative Investigating Commission for the Illinois General Assembly (see:4/22/75 Illinois Nursing Homes: A Report to the Illinois General Assembly). “Jay” was barred from serving in the nursing home field after he defrauded a resident under his care of more than $40,000. The report cites testimony from a resident stating that Yehuda offered to return her money if she took a ride with him to his “bank”, and instead left her stranded in a deserted cornfield in the dead of winter in 8 degree weather. Only by luck was she spotted by a passerby who reported the incident to the McHenry County Sheriff’s Department. When the sheriff’s office interviewed Yehuda, he claimed “when they got out into the country she asked to be let out. He let her out and drove back to Chicago…and found her purse in the back seat.” In these instances, as well as the recent litigation, Yehuda Jay Draiman's tactic has been to invent illegalities to accuse his victims of, in order to shift the focus of attention away from him.
http://multiut.com/responses_to_YJD /IL_Assembly_Report_04_75.pdf
The current posting is just another example of Yehuda Jay Draiman's tactics.
For more information about defamation attempts by Yehuda Jay Draiman, see www.Illinoisantidefamation.com or www.IllinoisDefamationProtection.com
INCREASING COST OF ENERGY and INFLATED FRAUDULENT BILLING
INCREASING COST OF ENERGY and INFLATED FRAUDULENT BILLING
It is not enough that consumers are paying higher cost for energy – Gas, Electric, Tel., Etc.
Due to the market volatility and the increase demand for energy worldwide and the manipulation of market conditions by various corporation.
Deregulation, which was designed to save the consumer on the cost of energy. Many new companies have started selling gas and electric in the past 20 years, as a result of this deregulation. We now have numerous deregulated third party suppliers of Gas and Electric that are gouging the consumers – billing prices higher than the regulated utility companies, inflating the bill, billing for product never delivered, billing phantom tax on the product, reneging on fixed price contract – when market prices go beyond the fixed contract. In short any way they can cheat, deceive and defraud the consumer is fair game.
Among the companies that practice such tactics is MULTIUT CORP or Multiut LLC of Skokie, Illinois the owner of the company Nachshon Draiman is well connected, one of the previous owners of Multiut was a federal judge and therefore has gotten away with numerous over billing and deceptive practices, there are numerous lawsuits for fraud pending against Multiut Corp and its owner Nachshon Draiman among them a Class Action Suit and Dynegy Mkg & Trade v. Multiut Corp, Nachshon Draiman et al 1:02-cv-07446 The Federal Court has imposed numerous contempt orders against Multiut and its owner and its owner Nachshon Draiman is involved in numerous other fraud in the Nursing Home business (defrauding the state Nursing License with false documents to obtain a Nursing Home License) and a hotel project where he committed a fraud of $45 million dollars and numerous other fraud and deception too numerous to mention. (Especially since Multiut and its owner Nachshon Draiman is represented by Jack Abramoff Law Firm – which has clout).
Another Company is Santana Energy out of Texas. Some utility companies were forced to refund the consumers hundreds of million of dollars due to manipulation of pricing and billing – many of those shenanigans stem from the Enron debacle some precede it and continue on to date.
Many of these suppliers of Gas and Electric who are promoting saving are actually charging higher prices than the local utility company which defeats the intent of deregulation – Multiut’s billing shows 20% to 30% higher cost and billing for gas that was never delivered. Not to mention Multiut’s billing for non existent City of Chicago Tax on Natural gas and inflated billing for lighting retrofit to various Nursing Homes which inflates the Medicaid billing to the government.
Corporate CEO and other higher ups in the corporate world have been convicted of fraud and sentenced/fined (WorldCom, Enron, Adelphia, Etc.). But it seems that some companies can continue to defraud the public without being hindered by the authorities.
Other frauds by Gas Electric suppliers are: Centerpoint Energy Inc.,
Pending lawsuits are: AG files fraud suit against Sempra affiliate alleging Enron-like games.
JD
This article is presented by Citizen for Honest and Fair Billing
PS
THREE FORMER NICOR ENERGY EXECUTIVES AND OUTSIDE
LAWYER INDICTED IN ALLEGED CORPORATE FRAUD SCHEME
CHICAGO -- Three former executives of Nicor Energy L.L.C. and an outside lawyer for the Lisle, Ill.-based company were indicted today for allegedly engaging in a corporate fraud scheme to obtain $400,000 in bonuses and other benefits for themselves by inflating revenues - at times by as much as $6 million - and understating expenses to make the company appear more profitable than it actually was in 2001. The defendants allegedly fraudulently deprived Nicor Energy - a retail energy marketing company established in 1997 as a 50/50 joint venture by Nicor Inc. and Dynegy Inc. - of their honest services and caused a loss to investors in publicly-traded Nicor, Inc. and Dynegy. On July 18, 2002, Nicor Inc. issued a press release announcing that its financial results for the second quarter and first half of 2002 were negatively affected by several factors, including irregularities in accounting at Nicor Energy, and the following day, the stock price of Nicor Inc. fell approximately 40 percent. Nicor Energy is currently in the process of final liquidation.
The five-count indictment returned by a federal grand jury charges Kevin Stoffer, formerly Nicor Energy's President and Chief Executive Officer; Andrew Johnson, former Director of Financial Services; John Fringer, former Vice President of Major Markets and Power Services; and outside counsel Michael Munson, announced Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois
MADIGAN, DALEY ANNOUNCE $196 MILLION SETTLEMENT WITH PEOPLES ENERGY; CUSTOMERS OF PEOPLES GAS AND NORTH SHORE GAS TO RECEIVE $100 MILLION IN CREDITS
Chicago – Attorney General Lisa Madigan and Mayor Richard M. Daley today announced that Peoples Energy has agreed to more than $196 million in consumer credits and benefits as part of a settlement that will provide much-needed relief to current Peoples Gas and North Shore Gas customers, establish a more than $25 million program of conservation and weatherization assistance for low- and moderate-income households and reconnect customers who have been disconnected from their heating services due to an inability to pay the high gas prices.
MADIGAN, DALEY, CUB ANNOUNCE REFUND CREDITS TO APPEAR ON NEXT GAS BILL FOR CUSTOMERS OF PEOPLES GAS AND NORTH SHORE GAS
Chicago — Attorney General Lisa Madigan, City of Chicago Mayor Richard M. Daley and Citizens Utility Board (CUB) Executive Director David Kolata today announced that as a result of their settlement agreement with Peoples Energy more than one million current customers of Peoples Gas and North Shore Gas will see refund credits on their next gas bills.
To compensate for over billing consumers between 2000 and 2004, Peoples Energy has agreed to provide a refund credit to each of the 1,014,071 current customers of Peoples Gas and North Shore Gas. The credits – totaling $100 million – will be included on the first bill received by customers after April 24.
“These refund credits cannot change the conduct of Peoples Energy, but they will help consumers who suffered as a result,” Madigan said. “This is an appropriate response to Peoples' conduct.”
“We are pleased that consumers are finally receiving the refunds that they deserve,” said City of Chicago Corporation Counsel Mara Georges. “Consumers should not have to pay for bad planning and business decisions by Peoples Gas.”
WEDNESDAY, JUNE 13, 2007
Justice Department Investigating NY Energy Markets
New York's wholesale energy market is being investigated for possible antitrust violations, according to a recent news report. A Newsday story indicates that a subject of the investigation may be possible withholding of capacity from the market, to drive prices up. This revelation has raised further questions regarding the proposed merger of National Grid and Keyspan, which controls significant amounts of generation capacity in the New York City markets.
2007.08.13
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