Attorney General Morrisey Files Suit Against Clear Rate Communications for Misrepresenting Itself to Customers
CHARLESTON — West Virginia Attorney General Patrick Morrisey announced today that the Office of Attorney General recently filed suit against Clear Rate Communications alleging the telecommunications company misrepresented who it was and then charged fees to customers when they tried to cancel their service.
“Our Office takes consumer complaints very seriously,” Attorney General Morrisey said. “In this situation, we received a number of calls within a few months of Clear Rate starting service in the state from consumers who said they were misled by the company and then could not terminate their agreement without paying fees and extra charges. West Virginians deserve better.”
The lawsuit, which was filed in Kanawha County 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 the lawsuit, Clear Rate Communications, a Michigan–based corporation, began selling telecommunication services to West Virginia consumers in January 2013. The Office’s filing alleges Clear Rate represented itself as Frontier when it solicited for customers, including portraying itself as Frontier on Caller ID. Consumers typically didn’t realize that they had purchased services from Clear Rate, and not Frontier, until after they received their first month’s invoice. 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. The carrier access charge is not explicitly authorized by the Federal Communications Commission, nor was it included in the tariff Clear Rate submitted to the West Virginia Public Service Commission. Rather, the charge is a discretionary fee that Clear Rate allegedly misrepresents as a regulatory tax and surcharge.
“It is fundamentally improper for a company to misrepresent itself as another company to solicit business from unknowing consumers,” Morrisey stated. “As reflected by our suit, this conduct will be challenged and penalties sought to prevent this type of misleading and deceptive conduct on West Virginia consumers.”
The West Virginia Consumer Credit and Protection Act prohibits an entity from unfair or deceptive acts, which includes “passing off goods or services as those of another.” W.Va. Code § 46A-6-102(7)(A). The Act further prohibits an entity from misrepresenting that it “has sponsorship, approval, status, affiliation or connection” that it does not have. W.Va. Code § 46A-6-102(7)(D). The suit alleges that Clear Rate purchased services from Frontier and then resold the services to consumers as Frontier.
To date, the Attorney General’s Office has been able to identify at least 4,231 West Virginia consumers that have purchased Clear Rate telecommunications services. The Attorney General 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.
Consumers who believe they have purchased services from Clear Rate should contact the Attorney General’s Consumer Protection Division toll free at 800-368-8808. Complaint forms also may be found online at www.wvago.gov.
A copy of the filing may be read by clicking here