For several years between 1996 and 2000, MCI charged subscribers of its long-distance telephone service non-subscriber rates in certain circumstances. The non-subscriber rates – up to $3.00 per minute at certain points in time – were 20 times greater than the subscriber rates that should have been charged. Users who received larger-than-allowed bills were deemed “casual callers” by the company and were billed far above their agreed rate.
Representing MCI subscribers who were charged non-subscriber rates, Seeger Weiss was a member of the Plaintiffs’ Steering Committee and Chaired the Discovery Committee in several Federal actions that were coordinated for pre-trial proceedings. Ultimately, Plaintiffs achieved an $88 million settlement – to that point, the largest-ever settlement of a consumer telecommunications claim.
The large settlement was the first of its kind and was far and above the amount that would have come from a regulatory fine, which was how previous violations had been handled.
Later MCI Settlements
A record-breaking $88 million settlement in 2001 in the class action lawsuit affected hundreds of thousands of customers and legal experts and consumer advocates interpreted the settlement as sending a message to telecommunications companies, reminding them to treat their customers fairly. Unfortunately, it was not the first or last legal challenge the company would face.
Prior to the class action lawsuit, the company had settled a number of antitrust lawsuits and in 2003, MCI agreed to pay $500 Million to settle fraud accusations with the Securities and Exchange Commission. The company also settled a number of fraud cases with state governments and with companies outside of the United States. In 2005, MCI was acquired by Verizon Communications.