Long-Distance Telemarketer Settles VT Charges

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Long-distance provider DirectONE agreed to offer consumer refunds to settle charges of fraud by the Vermont attorney general's office involving its telemarketing activities, the state attorney general said yesterday.

DirectONE, based in California, hired 26 telemarketing agencies to market its long-distance service as a free-to-pay upsell offered at the end of sales pitches for other clients, the attorney general's office said. The long-distance provider's telemarketers billed Vermont consumers without authorization and made misleading statements as part of the telemarketing scripts they read to consumers, according to the attorney general.

The telemarketers' use of the words "free" and "no obligation" misled consumers because they were obligated to cancel to avoid being billed, the attorney general said. In addition, DirectONE's claims that consumers would pay 3.9 cents per minute were misleading because they were accurate only if consumers used all of the minutes available in "fixed minutes" plans -- for example, 1,024 minutes monthly for $39.95 a month -- offered by the provider, the attorney general said.

DirectONE admitted no wrongdoing but agreed to pay refunds to 110 Vermont consumers and to change its disclosure and billing practices. The refunds averaged about $70 per consumer, the attorney general's office said.

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