PacBel Fine to Fund Program for Consumers

The California Public Utilities Commission granted 32 nonprofit groups nearly $5 million Wednesday under a special consumer program financed by a fine levied against Pacific Bell for abusive marketing practices in 1985-86.

Created at the suggestion of Public Advocates, a San Francisco public-interest law firm, the program is intended to help, among others, people with low incomes and those who speak little or no English.

Pacific Bell was fined after the commission determined that the company was guilty in many cases of persuading low-income and non-English-speaking customers to sign up for special services without making it clear that these features were optional and cost extra. The services included speed-dialing and call-forwarding.

As a result of the case, Pacific Bell was forced to make $63 million in refunds to 495,000 of its 8.5 million residential customers. In addition, Pacific Bell was fined $16.5 million by the PUC. Public Advocates persuaded the PUC to set aside that money for consumer education for the groups most hurt by the high-pressure marketing practices.

The money is to be spent over six years, under the administration of the California Community Foundation in Los Angeles. The $5 million granted Wednesday was the first allocation of the $16.5-million fine.

“This trust fund will create the best-educated low-income, minority, non-English-speaking consumers in the country,” predicted Robert Gnaizda, founding partner of Public Advocates. The largest single grant went to San Francisco-based Consumer Advocates to develop educational materials and work with other grantees. California/Nevada Community Action Assn. will get $669,000, which will develop training programs for the other participating agencies.

Other groups include the Union of Pan Asian Communities and the Chicano Federation of San Diego County, which jointly received $535,000 for programs to reach speakers of Spanish, Vietnamese, Hmong, Lao and Khmer. A consortium headed by Los Angeles’ Korean Youth Center will receive $20,000 to develop a telephone referral and information network for Korean, Chinese, Japanese and Filipino consumers.