ST. LOUIS POST-DISPATCH
In an age of paperless billing and online payments, it’s easy to see why many consumers don’t spend a lot of time skimming over their phone bills. Yet with some officials warning that “cramming” scams might be on the rise, it’s time to start scrutinizing those monthly statements.
According to the Federal Communications Commission, cramming is the practice of placing unauthorized, misleading or deceptive charges on your telephone bill. There’s nothing new to the scam, which exploded after federal regulators started encouraging what is known as third-party billing.
Ironically, Washington wanted to help consumers when it pushed third-party billing. The idea was that competition would flourish — and prices would drop accordingly — if local phone companies had to share space on their monthly statements with companies providing Internet service, voice mail and similar services.
Plenty of legitimate companies now bill customers via phone statements, but so do many scammers. Their MO is to keep the unauthorized, monthly fees low — usually less than $20 — with the hope that consumers never notice the charges. The bogus billing usually claims to be for voice mail, cell phone or Internet-related service; but some crammers have charged consumers for unwittingly participating in diet programs, sweepstakes and other services.
On Thursday, Illinois Attorney General Lisa Madigan settled a suit her office brought against a credit counseling company that allegedly bilked more than 9,000 Illinois consumers through bogus charges on their monthly phone bills.
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US Credit Find of Cape Coral, Fla., has agreed to forgo deceptive practices, cancel all current billing contracts and refund Illinois consumers who say they never authorized the $9.99 monthly fees that bought access to an online tutorial designed to improve credit scores.
(Metro East readers, take note: To get paid, you have to file a complaint with Madigan’s office before Aug. 20. The fishy billing seemed most prevalent in the first 10 months of 2008, so dig out those old phone bills to see if you can make a claim.)
Obviously, this isn’t just an Illinois problem. In 2008, Missourians filed 1,961 complaints with the Missouri attorney general’s office about cramming and similar scams.
A Central West End woman said she recently took a close look at her phone bill to find out whether a change in service would make financial sense. Only then, she said, did she discover she had been paying for two separate voice mail services she had never authorized.
The woman, who did not want to be identified, said she called the company that was identified on her statement as the third-party biller. Someone at the firm told her that company was simply an agent of other firms and that she would have to call those companies directly. Needless to say, she got neither satisfaction nor straight answers. AT&T agreed to refund the bogus charges.
That’s not uncommon, said April Borlinghaus, a spokeswoman for AT&T. The phone company removes unauthorized, third-party charges and investigates companies “if we see a pattern of excessive cramming complaints,” she said.
“These companies are required by our contracts to submit only valid charges,” Borlinghaus said. “Violation of this obligation can result in a variety of remedies, up to and including termination of the billing and collection contracts.”
Getting a refund is just the first step. If your phone bill has been crammed, lots of regulators and consumers watchdogs would like to hear from you. You should file a complaint with the state attorney general’s consumer-protection division, as well as the FCC, the Federal Trade Commission and the Better Business Bureau.
To avoid getting ripped off, consumers always should review phone statements. The most suspicious charges might be small, but they add up month after month. Consumers can take other steps to avoid being ripped off in the first place.
— Avoid entering contests and always read the fine print. That’s where crammers sometimes bury authorization agreements.
— Beware free offers. A consumer might be instructed to call a toll-free number, say his name and declare something like “I want the service.” He’s agreeing to more than he realizes.
— Tell your phone company you want to pre-emptively block some services, like 1-900 dialing, international long distance, local toll calls and third-party services.
— Use up-to-date security software if you use a modem. Fraudsters sometimes use malicious software programs to download “dialer programs” to consumers’ computers. The program makes the modem dial international or 1-900 numbers.
