New Jersey Sues Verizon Over FiOS Marketing

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New Jersey's Attorney General has sued Verizon Communications, alleging the telco engaged in "deceptive and misleading" marketing, sales, billing and customer service practices related to its FiOS services.

The state, through its Division of Consumer Affairs, charged that Verizon failed to provide advertised promotional gifts -- such as flat-screen HDTVs -- when consumers signed up for FiOS service. New Jersey also alleged that Verizon charged consumers higher prices for service than prices quoted in door-to-door solicitations and ads, and charged activation fees after consumers were told that such would be waived.

"FiOS is touted for its clearer picture but Verizon obscured the truth from potential customers in its advertising and sales pitches," New Jersey attorney general Anne Milgram said in a statement. "Deception and misrepresentations have no place in the marketplace and we will hold businesses accountable when they violate the public's trust."

In a statement responding to the state's suit, Verizon New Jersey president Dennis Bone said: "We believe that the issues raised by the attorney general today are related primarily to the start-up of the FiOS business nearly two years ago in New Jersey and have been largely addressed. We will continue to work with the attorney general to resolve any remaining concerns and to ensure that our customers are fully satisfied."

The New Jersey Division of Consumer Affairs said it has received 266 consumer complaints related to FiOS marketing and sales to date. The agency has set up a FiOS complaint form and survey on its Web site at http://njConsumerAffairs.gov/fios.htm.

Last year, for example, Verizon angered new FiOS triple-play subscribers after telling them might have to wait nearly four months to receive the free 19-inch Sharp HDTV sets the telco promised as part of a promotion targeted to the New York area. The telco said its fulfillment partners had difficulty obtaining Sharp TVs to meet demand generated by the promotion.

The State of New Jersey filed suit Monday in the Superior Court of New Jersey for Essex County. In its four-count complaint, the state alleged Verizon violated the Consumer Fraud Act through "unconscionable commercial practices, misrepresentations and knowing omissions of material facts." Each violation of the state's Consumer Fraud Act carries a civil penalty of up to $10,000 and up to $20,000 for each subsequent violation.

Other actions the state accused Verizon of engaging in include: charging consumers for services, such as movie packages, that were never ordered; representing that movie packages were free, then billing consumers for such services; using the term "additional charges apply" in advertisements, without providing a description of those charges; failing to provide consumers with a copy of their signed contract; and failing to honor a consumer's request to cancel the FiOS service.

Deputy Attorney General Alina Wells of the Consumer Fraud Prosecution Section is representing the state in the suit. A copy of the complaint is available here.

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