Dex Media / Harmful practices in directory advertising and fidelity collection service
Qwest Dex (since September 2003 absorbed into Dex Media, Inc., owned by The Carlyle Group and Welsh, Carson, Anderson & Stowe) publishes classified telephone directories ("Yellow Pages") in the Seattle, Washington, area. While operating a business named Centerplex (at http://centerplex.net), I found that Qwest Dex engages in harmful practices in the sale of directory advertising.
If you seek to advertise in a Qwest Dex directory, Qwest Dex asks you to sign a lengthy contract. The contract protects Qwest Dex from almost any imaginable claims, regardless of Qwest Dex's behavior.
Centerplex made the mistake of signing the Qwest Dex contract without insisting on changes. Qwest Dex botched each advertisement that Centerplex submitted for publication. Centerplex claimed it was entitled to a reduction in the charge because of the errors by Qwest Dex, but Qwest Dex denied doing anything wrong and claimed that Centerplex was not entitled to any refund. Even if Qwest Dex had admitted to botching the ads, its contract would have entitled Centerplex only to a small refund. For example, if your ad says "ABC Widgets are the World's Best" and Qwest Dex miscomposes the ad to say "ABC Widgets are the World's Worst", the contract says you are entitled to a fractional refund, with the fraction equal to the erroneous material as a fraction of the entire ad. In this case, you would get a refund of 1/6 of the price, even though the ad would be worse for you than no ad at all. (Or perhaps Qwest Dex would claim that only the letters "Be" of "Best" were miscomposed, decreasing
your refund to 1/16 of the price.)
If you have a disagreement with Qwest Dex, you may be able to get it to settle the disagreement, but Qwest Dex doesn't necessarily comply with the settlements that it enters into. Centerplex negotiated a written settlement with Qwest Dex's collection agency, Fidelity Collection Service. Both Fidelity, as authorized agent of Qwest Dex, and Centerplex signed the settlement agreement. Centerplex then paid Qwest Dex the amount required by the settlement, which was 80% of the original contract payment amount. Qwest Dex's collection agency refused the payment and mailed it back to Centerplex, saying Qwest Dex was renouncing the signed settlement agreement.
Moreover, even though Qwest Dex's own contract gives both parties the right to submit any dispute to arbitration under the American Arbitration Association, Qwest Dex refuses to admit the validity of its own arbitration clause and repeatedly threatens to file lawsuits against customers with which it has disagreements.
Moreover, Qwest Dex has its alleged debts collected in dishonest ways. For this purpose, it uses Fidelity Collection Service, a trade name of Portland Credit, Inc., which is located at 11818 SE Mill Plain Blvd, Suite 213, Vancouver WA 98684. Its telephone number is [protected]. When Fidelity contacts you demanding payment and you reply, in writing, denying the validity of the debt, Fidelity ignores your dispute and continues contacting you, even denying that you have responded to its notices. This misrepresentation violates the standard defined by section 806 of 15 USC 1692d (the Fair Debt Collection Practices Act), which prohibits any debt collector from using "any false, deceptive, or misleading representation or means in connection with the collection of any debt".
Qwest Dex directories tell customers how to deal with telephone harassment, but they don't tell customers that Qwest Dex itself practices telephone harassment. After Qwest Dex renounced its settlement agreement with Centerplex, its collection agency resumed making demands for payment of amounts substantially more than it had agreed to settle for (and even more than the contract amount). It made these demands in writing and by telephone. Its Litigation Manager, Michael Hoffman, began making up to 5 telephone calls per day to Centerplex threatening to seize Centerplex's real estate and file a lawsuit against Centerplex that would force Centerplex to absorb its own legal costs and Qwest Dex's. Centerplex demanded to Mr. Hoffman during these telephone calls that Fidelity immediately stop making telephone calls to Centerplex and conduct any and all communications in writing. Mr. Hoffman replied as follows:
Qwest Dex is legally entitled to telephone a business with which it has a payment dispute as often as it wants, regardless of whether that business has requested that it stop calling. Qwest Dex doesn't pay Mr. Hoffman unless he files a lawsuit. Qwest Dex may be in the communication and publishing business, but it uses legal harassment to intimidate customers who exercise their freedom of speech and press. After Centerplex began to notify its tenants by means of this Web page about Qwest Dex's tactics, the above-named Litigation Manager of Qwest Dex's collection agency began making telephone calls to Centerplex threatening legal action because of this Web page.
To get the flavor of Qwest Dex's telephone harassment, you need to see and hear actual telephone messages left by Fidelity on behalf of Qwest Dex.
Here is a message left by Hoffman on 5 December 2003. Notice the dual themes, "You are in danger" and "You are stupid", invoked by Qwest Dex as it tries to persuade a customer to shut up and pay.
5 Dec 2003, 10:37
So is it AT&T Wireless's fault, Mr. Pool, that you are unable to return calls? Is that going to be your stance in court, or ...?
This is Mike Hoffman. I had you on the phone a minute ago and you decided you didn't want to say anything.
You've helped my case every time we've talked, Mr. Pool. I greatly appreciate that.
I love your Web site, by the way: "Payments to Centerplex can be made with these two methods:" Sterling Savings Bank and an account number for a money market account. Not too bright, Mr. Pool, when folks are looking to sue you and looking for an asset to seize once the judgment's in place. I suggest you might want to use your head there for a second, Mr. Pool, and make a bright decision and return this call: [protected]. Refer back to case 102705.
Generally speaking, Jonathan, I see folks playing little games like you do on the telephone or make little erroneous fraudulent claims on Web sites--they generally are folks that have nothing. There's no purpose in suing them because they own nothing that can be seized. You've got four pieces of commercial property and a money market account that I am going to go after as soon as the judgment's in place. Not a very bright move, Mr. Pool.
And, by leaving yourself liable in regards to the slanderous remarks on your Web site against myself personally, you'll see a second summons and complaint with just my name on it, Mr. Pool. Again, bad move.
[protected]: Give me a call back and we'll discuss your Dex Media dilemma and maybe a settlement in regards to your slander to my name as well, Mr. Pool.
Best of luck to you.
Here is the next Qwest Dex telephone message. Where the previous message invoked the "You are stupid" and "You are in danger" themes, this message adds the "You are a coward" theme.
15 Dec 2003, 16:38
Jon, Mike Hoffman there. Must be having some problems with AT&T Wireless, because I just called you and the line went dead right after I identified myself. But, looking back at my notes, it seems to happen every time I call you and I identify myself.
Mr. Pool, I tell you, the only place that you're willing to discuss this matter is on your Web sites where no one is capable of responding. I'd think that you'd be a little braver than that. I mean, if you've got a point to make, Mr. Pool, why aren't you making it when I call?
You will very shortly have your opportunity to make your point in court. I'm hoping, Mr. Pool, that you do us all a favor like you have in the past and don't bother showing up, so that we can get that default judgment and I can really begin my work here, Mr. Pool, via the extraction.
You will have until the end of business on the 17th, Sir, to return this call, at which juncture I will have you served immediately with a summons and complaint. Again, Mr. Pool, you can dodge that as well if you'd like. I will pay for public service, being as you're going to end up paying that as well in the long run.
And, once the judgment's in place, Mr. Pool, I will be taking care of this for you.
So, the bottom line is, Mr. Pool, you have no choice. You're in breach of contract. You have no defense. You will be paying this debt. The only choice you have, Jon, is whether you pay it voluntarily and pay just the amount agreed to in the contract or whether I extract it and you pay the exorbitant costs of attorney fees and court costs from that juncture forward.
Best of luck to you there, brother.
The message that Qwest Dex's agent left immediately after the one above embellishes the "You are a coward" theme with the "You aren't even a man" theme, taking advantage of the fact that a female
screened the call.
15 Dec 2003, 16:40
Jon, you'd think at least in front of the ladies you'd be a little braver than that.
[protected], case number 102705.
Jon, the scenario hasn't changed. You can hang up the phone every time you like, but if you don't honor your contracts you're going to get sued.
So I'd heavily advise, Mr. Pool, that you pick up the phone and handle your business.
Again, [protected], case number (Washington case number) 102705.
I'll talk to you, Mr. Pool.
On 19 December 2003 Mr. Hoffman telephoned us and asked the person answering the telephone whether she was my spouse. When she said no, Hoffman replied, "Smart girl."
Does Qwest Dex's collection agency violate the law with its harassing conduct? We took a quick look at the federal Fair Debt Collection Practices Act (15 USC 1692) and saw obvious violations: The Act prohibits misrepresentations in debt collection, as mentioned above, and requires collection agencies to to stop contacting alleged debtors except for pacticular purposes when asked. We pointed these violations out on this site.
Fidelity responded on 27 January 2004 with (of course) a telephone message. In its message, Fidelity denied that the Fair Debt Collection Practices Act applies to a commercial debt. We read the Act more carefully and found that Fidelity was correct, because the Act defines "debt" as a personal debt, not a commercial debt. So, Fidelity can victimize Qwest Dex's alleged debtors with any tactics it wants, without violating the Act. We apologize for having mistakenly asserted that the Act prohibits Fidelity's misleading and harassing behavior. We have been duly corrected, and we now understand that Fidelity practices misleading and harassing debt collection for Qwest Dex because the Act exempts Fidelity from punishment for this conduct. Giving Fidelity the benefit of the doubt, we presume that Fidelity's behavioral principle is to perpetrate only legal deception and only legal harassment. We're relieved.
Is there, then, no law against what Fidelity does on behalf of Qwest Dex? That's a matter of interpretation. Washington State's collection agency law, unlike the federal statute, regulates the practices of licensed collection agencies with respect to all debts, including commercial ones. Washington's law provides (RCW 19.16.250(12)) that no licensed collection agency shall "communicate with a debtor or anyone else in such a manner as to harass, intimidate, threaten, or embarrass a debtor". An agency that does this is barred from collecting any interest or collection costs from the debtor and, under the Consumer Protection Act, is liable for a $2000 civil penalty. Do the communications recorded above violate this prohibition? That exercise is left to the reader.
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