Article written by Teri Roney, reporter, The Ark Newspaper. This article is presented with permission from the The Ark Newspaper, Tiburon California, June 9, 2010.
If you haven’t checked the list of itemized services on your telephone bill lately, you might in for some surprises. There’s a good chance that you’re paying for bogus services.
Marilyn Goldeen of Belvedere found that charges from a company listed as ILD Teleservices had gone up—from $12.95 to $25.90. What was she paying for? “I have no idea,”she said. “I’d never heard of them.”
The Transaction Clearing Co.(TCC) was billing her, as well, and for the same sort of non-existent services. Goldeen called both companies and demanded her money back. “I told them that I hadn’t authorized those services,” Goldeen said, “and one of them told me that my son had authorized the service, which wasn’t true.”
Goldeen was the victim of what is known as cramming, in which items appear on your bill with names that seem to be—but are not—legitimate services. The Federal Trade Commission calls them mystery services, and they could be could be anything, from long distance charges, to internet services, to free 900 numbers.
A telecom auditor who’s fought the practice since it began around 1990, said the only thing you’ve purchased is a new name on your bill and an extra charge. Mark Evans, the principle of BottaBoom L.L.C. telecom audit, adds that you could have signed up for the service, without ever knowing it.
“These operations are very sneaky. Someone might call and say, ‘Hi there! are you enjoying the weather out there?’ Well, you’re being taped,” Evans explained, “and as soon as you say, ‘yes’ you’re signed up for some phantom service. And if you contest it, some actually play the edited tape back to you.”
Evans said the rip-off is usually quite small for households, because a five or ten dollar charge is easy to overlook and the customer will continue to pay it, but the big payoff comes with business accounts. An operator may call a temp receptionist with the company and ask if she wants to enter a contest to win a cell phone, or if she can verify that the company is on list subscribing to some service. It makes no difference that the receptionist lacks the authority to verify or add a service. It will show up on the next month’s bill along with a myriad of others, and remain there until someone catches their presence.
“I have saved clients thousands of dollars a year, just by going over their telephone accounts and pulling out these services,” Evans said. “Cramming is a billion dollar industry, and right now it’s perfectly legal.”
The mechanism that allows third party billing was put into place during the breakup of Ma Bell in 1984. It was intended to consolidate bills for local, long distance, and 900 numbers and minimize the number of phone bills in your mailbox. Today, everything from club memberships to free collect calls are funneled onto your bill through clearing houses like Enhanced Services Billing Inc.(ESBSI), IDL Services, and hundreds more. In the May & June 2010 issue of AARP, consumer reporter Ron Burley wrote, “Your telephone number has become a charge account—but absent the security of a password, PIN, or signature that you have with credit or debit card.”
The FTC collected $1.9 million in a settlement with ESBI’s parent company in 2008, but absent a class action suit, Evans isn’t optimistic about a short-term solution.
“There aren’t many homeowners willing to spend the time and money to sue over a $12.00 overcharge,” Evans said, “and once the customer discovers the charge, the company is usually quite willing to return the money.”
Goldeen said the companies who billed her refunded the full amount. “They said they’d reapply it to my AT&T bill, in a month or two. We’ll see,”she said.
According to Evans, if it’s your name on the bill, you have a right to the full refund. That can add up to a substantial amount of cash, because charges that have gone on for a few years can total hundreds of dollars. If you haven’t saved your bills your carrier can trace the charges for you, but don’t expect much more. AT&T is under no obligation to either verify third party transactions or address cramming complaints from customers.
To stop the practice the FTC website urges cramming victims to file a complaint even after a full refund. An online video is available to walk you through the process at ftc.gov. Or you can call 1-800-FTC HELP for more information.
BottaBoom Consulting LLC is a telecom audit firm out of Tucson, Arizona that has been investigating phone hacking, telecom fraud and cramming to victimized American businesses over the past 25 years, resulting in millions of dollars of refunded overcharges and savings to clients. If you are interested in a telecommunications fraud review or telecom fraud detection and telecom fraud prevention services for your company or a telecommunications audit project, please contact BottaBoom at: 1-888-487-5326.
