Deadbeats Won’t Be Let Off The Hook System Will Track People Who Don’t Pay Long-Distance Bills

The Justice Department gave phone companies permission Wednesday to compile and exchange information on people who don’t pay their long-distance phone bills.

AT&T, MCI, Sprint and other companies would supply such information to an independent clearinghouse. The companies would then go to the clearinghouse to find out whether a potential customer has defaulted on long-distance charges.

Traditional credit reporting services don’t track unpaid long-distance bills unless they are referred to a collections agency, said Department of Justice spokeswoman Jennifer Rose. The clearinghouse - which would have to abide by federal consumer protections governing credit reporting services - would track all defaulted residential bills, phone company officials said.

Neither the Justice Department nor individual phone company representatives had industrywide information on how much money is lost to unpaid long-distance bills. They also did not know how many unpaid bills are referred to collection agencies.

AT&T and MCI welcomed the Justice Department’s action. “We view this as another tool for the industry to use to cut down on bad debt,” said spokeswoman Jamie DePeau.

Millions of customers switch their long-distance providers each year.

A Justice Department press release said: “The proposed information exchange is designed to reduce the amount of uncollectible debt owed to long-distance carriers on residential accounts and should lower costs to consumers.”

To access the information, the Justice Department said phone companies must become a member of a consortium called the National Consumer Telecommunications Data Exchange Inc., which would hire a third party to establish the clearinghouse.

The department said that it approved a similar plan in 1994 that lets phone companies obtain information on businesses that don’t pay their long-distance bills.