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Telephone Company Must Pay $3.9 Million, Suspend Its Operations

May 22, 1997|MICHAEL G. WAGNER | TIMES STAFF WRITER

State regulators Wednesday slapped a San Diego-based telephone company with a $3.9-million penalty for illegally switching customers from other carriers--a practice known as "slamming."

The Public Utilities Commission, on a 5-0 vote, forced Communications Telesystems International, known to its customers as WorldxChange, to immediately stop doing business in California for three years, and to return $1.9 million to 56,000 victims.

The commission ordered the company to pay a $2-million penalty to the state's general fund. The company also must notify customers that they need to find another long distance telephone company and bear the cost of helping them find one.

Company officials did not return repeated calls for comment. But in a news release, the company said it "intends to vigorously attack each aspect of the decision in appropriate federal and state courts."

The company, which is run by a former Orange County man, claims the state's action will have no effect on its interstate or international calling services. The company had annual revenue of $200 million, according to PUC testimony.

State regulators accused the company of slamming thousands of Latino and Asian immigrants in Orange, Los Angeles and San Diego counties, and then slamming them again after they canceled the service.

"The commission really intended to send a loud message that slamming just is not going to be tolerated here," said Wilson Lewis, supervising special agent of the commission's consumer services division.

Last year, two other companies reached settlements with the commission that resulted in business suspensions and refunds.

Regulators say Communications Telesystems was started by Roger B. Abbott, 39, of Rancho Santa Fe, who once served three years in state prison following a 1982 conviction for cocaine trafficking in Orange County.

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