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May 27, 2004

States Settle with Telecommunications Firm-New Access

New Access Agrees to Pay at Least $1 Million in Restitution And Fees, And Issue
$1 Million in Additional Credits to Customers

DES MOINES.   Attorney General Tom Miller today announced a ten-state settlement with New Access, LLC, a Minnesota-based reseller of local and long-distance phone services.

The ten states alleged that New Access engaged in a pattern of deceptive telemarketing practices including misrepresenting to consumers the actual price of New Access' services, its affiliation with a consumer's current provider, and the savings which consumers could realize if they switched to New Access. The states also alleged that New Access switched consumers' telephone service providers without the consumers' consent.

New Access denied the states' allegations but cooperated with the states in reaching an agreement which will make significant changes in its business practices and provide better protection to consumers against deceptive telemarketing tactics.

The settlement bars New Access from switching a consumer's telephone service without first obtaining express affirmative consent from the consumer and further bars the company from representing that it is affiliated with the consumer's current service provider, or that the consumer is required to switch to telephone service offered by New Access. It also requires New Access to:

  • Provide a toll free telephone number connecting to a live person for customer service for all new customers;
  • Make certain disclosures to consumers in a clear and prominent manner during telemarketing calls, including the average regulatory fees that will be added to the base price of service;
  • Obtain separate authorization from a consumer for each feature the consumer wishes to obtain from New Access, if that feature is not included in the package price being offered;
  • Implement a nationwide system for recording its telemarketing solicitation calls in their entirety and to maintain that system for one year from the date of the settlement.

In settling the case, New Access agreed to credit the bills of former customers in an amount the company estimated to exceed $1,000,000. The company also agreed to deposit $250,000 into a trust fund for consumer refund claims and then supplement that fund if additional monies are needed. Consumers who previously filed complaints about New Access' deceptive practices, or who file a complaint within 90 days of entry of the settlement, will be eligible for restitution. In addition to the $250,000 in initial funds for consumer restitution, the company agreed to pay the states an additional $750,000 for civil penalties, attorney's fees, costs, consumer education, litigation, public protection or local consumer aid funds.

Participating in this settlement with Iowa are the states of Minnesota, Colorado, Ohio, Michigan, Montana, Nebraska, North Dakota, Texas and Wisconsin.

For each consumer that has filed a complaint with New Access, the Consumer Protection Division will notify the consumer on the procedure for filing a claim and provide a claim form. In addition, both the Consumer Protection Division and New Access will provide claim forms and instructions to any consumer that files a complaint by August 24, 2004. Individuals with questions about the settlement with New Access are encouraged to call the Consumer Protection Division at (515) 281-5926 or visit the Attorney General's web site at:

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