CenturyLink Is Accused of Running a Wells Fargo-Like Scheme – Bloomberg

 In Business
A former CenturyLink Inc. employee claims she was fired for blowing the whistle on the telecommunications company’s high-pressure sales culture that left customers paying millions of dollars for accounts they didn’t request, according to a lawsuit filed this week in Arizona state superior court.

The company’s shares fell the most in six weeks on the news, while the shares of merger partner Level 3 Communications Inc. also dropped sharply.                                              

The plaintiff, Heidi Heiser, worked from her home for CenturyLink as a customer service and sales agent from August 2015 to October 2016. The suit claims she was fired days after notifying Chief Executive Officer Glen Post of the alleged scheme during a companywide question-and-answer session held on an internal message board. 

CenturyLink CEO Glen Post

Source: CenturyLink Inc. 

The complaint alleges CenturyLink “allowed persons who had a personal incentive to add services or lines to customer accounts to falsely indicate on the CenturyLink system the approval by a customer of new lines or services.” This would sometimes result in charges that hadn’t been authorized by customers, according to the complaint.

CenturyLink, of Monroe, La., is in the midst of a $34 billion merger with Level 3 Communications Inc., whose CEO, Jeff Storey, will become chief of CenturyLink in 2019 as the company goes up against powerhouses such as AT&T Inc. in bidding for businesses’ heavy internet traffic. CenturyLink, which provides communications and data services nationwide and offers hosting, cloud, and information technology services, booked $816 million in net income on $17.5 billion in sales last year. 

Shares of CenturyLink closed down 4.6 percent at $25.72 after trading down about 7 percent earlier in the session, in their biggest intraday decline since May 4. Level 3 shares ended down 2.8 percent at $62.03. CFRA cut its recommendation on shares of CenturyLink to hold from buy. 

CenturyLink “holds itself and its employees to the highest ethical standards” and has “an Integrity Line in place, 24 hours a day, seven days a week,” Mark Molzen, a spokesman, said in a statement. “This employee did not make a report to the Integrity Line and our leadership team was not aware of this matter until the lawsuit was filed. We take these allegations seriously and are diligently investigating this matter.”

Heiser’s complaint alleges that she became increasingly concerned about what she observed at CenturyLink after news of Wells Fargo & Co.’s regulatory troubles broke in September. In that case, Wells Fargo employees opened deposit and credit card accounts without customers’ consent to earn incentives and meet sales goals. Without admitting wrongdoing, Wells Fargo ended up firing more than 5,000 employees and agreeing to pay $185 million in fines, in addition to compensating customers for fees related to the unauthorized accounts.

The complaint likens what Heiser said CenturyLink sales agents did to the Wells Fargo scandal and estimated the alleged unauthorized fees amounted to “many millions” of dollars. She says her concerns were bolstered by posts she had read on review websites.

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