Utility Company Overcharges Customers

An NBCLA investigation has exposed how the LADWP has been wrongly charging perhaps thousands of its customers for a service they don't even get. The utility has apparently been doing this for more than a decade.

"How long have I been paying for this? I've lived here for 10 years. This could add up to a lot of money," says Venice resident Tamara Henry, who recently noticed suspicious charges on her DWP bill.

Henry noticed she's been charged up to $50 per bill for a "solid resources fee."

That fee is for city trash collection. But her Venice apartment gets its trash picked up by a private firm.

The city isn't supposed to charge you that fee if you don't get city trash pickup.

Our investigation found numerous buildings, including condos and apartments, where residents are getting charged for city trash pickup they don't get.

"I felt ripped off," says Yuson Shin, after she realized she's been getting charged for city trash pickup on her DWP bills for more than 10 years, even though her building has always had private collection service.

Last year, she began calling the DWP to get a refund.

"It took a dozen calls or more. They made me jump through hoops," says Shin.

She says DWP officials told her to call the LA Bureau of Sanitation. She says Bureau officials then told her they'd need proof from her apartment manager that her building gets private trash pickup.

According to the management company, Howard Management, it provided that proof, and the city lost the documents.

Months later, Shin's DWP bill finally shows that she's owed a $1,400 credit.

Some customers think the city is intentionally making it hard to get refunds because it wants to keep the money it's over-billed.

"Just think about that little charge, multiplied by hundreds of thousands of people, how that will increase their bottom line," says DWP customer Tamara Henry.

NBCLA tried to ask the DWP why it's billing customers for city trash pickup they're not getting.

DWP representatives refused to talk, and told us to call the LA Bureau of Sanitation.

A Bureau spokesperson said the organization wouldn't comment. So we tracked down the director of the Bureau of Sanitation, Enrique Zaldivar, and asked him about the erroneous charges.

"It's a database problem," said Zaldivar, explaining that a computer problem is causing DWP customers to get billed for city trash service they don't get.

We asked him, "Whose database has the problem, yours or DWP's?"

"It's hard to say, really, it's hard to say. It's hard to say which one," Zaldivar replied.

He also said the city has no idea how many customers are getting wrongly charged.

But apparently, the bureaucrats have known about this billing rip-off for more than a decade.

In 1998, a class action lawsuit was filed against the City of LA for this exact same problem: billing customers for city trash pickup they didn't get.

Records show the city settled the suit in 2000. The lawyer for the class action plaintiffs tells NBCLA the Bureau of Sanitation had to refund thousands of customers as a result of the settlement.

The Bureau of Sanitation declined to speak with us about the prior lawsuit.

Now, more than a decade later, DWP customers are still getting wrongly charged.

"This is money I could be using for something else," says Henry, whose been calling the DWP to try and get her refund.

"I'm getting the runaround," says Henry.

The Bureau of Sanitation has begun sending out 750,000 letters to DWP customers, telling them that if they think they've been wrongly billed for city trash pickup, to call 1-800-773-CITY, or 1-213-473-5663.

Click here to view the city's letter.

But if the experience of other customers is any indication, it might take months or years to get a refund.

Do you have more information about this story?  Do you have another story for us to investigate?  E-mail: Joel.Grover@NBCUNI.com.

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