CenturyLink Agrees To Pay $9M As Penalty For Bogus Billings
Zacks Investment Research | Jan 10, 2020 06:11AM ET
Per media reports, CenturyLink, Inc. (NYSE:CTL) is going to pay about $9 million as a settlement for claims of overbillings put up by Minnesota’s attorney general. It also failed to follow through on promised discounts. The company is known to be Minnesota’s second-largest (by employment) telecom services provider with 2,100 staffs.
Based in Monroe, LA, CenturyLink was sued by Minnesota in 2017 over billing customers frequently, more than the price quoted by representatives. The communications company violated the law by fraudulently overcharging thousands of residents and illicitly raising the price for its service. In addition to the penalty, it agreed to reform its pricing policies and submit to audits from the Minnesota Attorney General's office for the next three years.
The company falsely added costs that were implied to be taxes or government fees. Per a report by Minnesota Public Radio, the math works out to an expected $70 per customer. CenturyLink’s existing customers will receive a bill credit and prior customers will be recompensed by check. However, in its own statement, CenturyLink has opposed with the state’s claims but settled to avoid the distraction and costs of litigation.
The company aims to generate revenues in its business markets and believes the scale of its global assets alongside an innovative product portfolio to be accretive to earnings. Through its extensive global fiber network, CenturyLink provides reliable services to meet the increasing digital demands of businesses and consumers.
This apart, CenturyLink is confident in its ability to meet its deleveraging objectives and reach the target leverage range of 2.75-3.25x (net debt to adjusted EBITDA) within the next three years, on the back of favorable business dynamics. The company intends to return significant value to shareholders while investing in revenue and EBITDA growth drivers.
CenturyLink has a long-term earnings growth expectation of 7.4%. The stock has added 8.7% compared with the Zacks Investment Research
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