Cramming - Unauthorized Telephone Bill Charges

Local Business Directory Listings

[pageoneresults]

Recently I've been performing research into some rather deceptive business practices being used in the Search Marketing Industry. One of those that seems to be on the rise is the practice of Cramming. From the FCC...

"Cramming" is the practice of placing unauthorized, misleading, or deceptive charges on your telephone bill. Crammers rely on confusing telephone bills in an attempt to trick consumers into paying for services they did not authorize or receive, or that cost more than the consumer was led to believe.

If you're a business and you've been approached with a free listing in a local business directory, do be very careful. Here's how it works...

Call Center manages to get in touch with someone at your business. There's a script that is used to take you through a series of questions that require you to say yes multiple times. It's all rather deceptive once you read the scripts. Your call is being recorded during this script routine.

During that conversation you're offered a free 30 day listing in a local business directory that is pretty much a shell with a Google Maps mashup. Most businesses will say no to the offer but not before being taken through the yes routines in the script.

You would think everything was hunky dory after saying no to the offer but it doesn't end there. At some point, charges begin to appear on your telephone bill that apparently many businesses don't pay much attention to or they are labeled in a way that makes them look like regular monthly charges, it's very deceptive and easy to miss on many business phone bills.

There was a suit filed by the Illinois State Attorney General in 2006 where one particular company have made over 7,500 charges in a 2 year period totaling over $250,000.00.

Madigan Files Suit Against Alleged Phone Bill Crammers
[IllinoisAttorneyGeneral.gov...]

Consumer Beware!

You can prevent this from happening by calling your telephone provider and blocking third party billing. If you're a business that has a large volume of calls where $49.95 per month wouldn't be noticed, I'd take a real close look at your bills and any additional charges listed. If you find that you've been a victim of cramming, you'll need to contact the company cramming you to start the process of recovering your monies.

Be prepared for resistance when asking for a refund. You will most likely be told that there is a recording of you saying yes to the monthly service fees. This is where it gets really shady. According to various complaints online, some are stating that the yes answers are being dubbed into the recordings where no answers were given. There's nothing official to back that claim up but it sure smells that way when you see all the complaints, there are 100s of them.

Have you been Crammed?

[LifeinAsia]

Thanks for the heads up! I wonder if they actually notified the people in advance that their call was being recorded (illegal in some places without notification). If not, that's a whole new legal angle to pursue.

[coopster]

Yes, this just happened to me last week. A charge of 49.99 appeared on the local telephone bill. Last week our invoice arrived and a charge of $49.99 plus taxes were applied to the phone bill. Immediately under the charges was a statement (likely placed by the phone company) stating that these charges were from the 3rd party named on the line item detail and a toll free telephone number was listed to call in the event you wanted to dispute the charges. Exact wording below ...

The above calls are presented for carrier <Example, Inc.>. 
If you have questions regarding these calls please contact 
<Example, Inc.> at <toll-free number>.

<Example, Inc.> billing on behalf of <Another Example, Inc.>

I called the toll free number immediately and argued with the customer service representative who put me on hold while she discussed the matter with her manager. Not until I asked for their federal identification number so I could offer it to the BBB first, of course. Needless to say, I was promised that the charges would be reversed and just to make sure I followed up with a phone call to my local telephone service provider to dispute the billing charges. Two days later I was notified that the charges had indeed been reimbursed.

The disappointment for me was the time and money lost handling this situation. I found out from the phone company that they cannot stop companies from this practice because of federal law restrictions. I about fell over.

[pageoneresults]

I wonder if they actually notified the people in advance that their call was being recorded (illegal in some places without notification).

There are three options available when recording calls. From the FCC...

Recording Telephone Conversations
[FCC.gov...]

I'm guessing the third option is one of the more predominant ones chosen.

or, accompanied by an automatic tone warning device, sometimes called a “beep tone,” that automatically produces a distinct signal that is repeated at regular intervals during the course of the telephone conversation when the recording device is in use.

I see all sorts of loopholes with the above option.

I found out from the phone company that they cannot stop companies from this practice because of federal law restrictions. I about fell over.

Bummer coopster! I sent out an email to quite a few folks about this last night. I'm waiting for them to get back to me with their findings.

Did you know there is a process that these companies go through to be approved for Third Party Billing? I've located a document (public access) from the Alabama Public Service Commission, this particular doc has the scripts that are used in the above mentioned Cramming operations.

Alabama Public Service Commission
Registration of Third-Party Providers for Telecommunications Billing
2010-03-22 - [PSCPublicaccess.Alabama.gov...]

After reading all of that and then seeing how the authorization of billing is done, I feel ill. :(

Authorization portion of sales call is recorded and a third party vendor will verify that the sale was authorized. Please see attached.

[tangor]

Whenever I get sales calls I don't want my only response is "I do not accept unsolicited sales calls."

Try turning that into "yes".

Oh, I always hang up!

[httpwebwitch]

truths like this make me want to get rid of my phone

[Sierra_Dad]

This did happen to me a few years back.

When we disputed some charges, they had a recording that I believe was cut and pasted as you described.

I'm glad they are being caught - if they are.

We did get the charges taken off by being an angry customer, but didn't go further to prove that they had cut and pasted and put somebody in jail.

[robdwoods]

I've been contacted numerous times by companies running a similar scam. In this case you are entered in a bogus web directory and a rep calls you to confirm your billing address. They never really tell you why they need to confirm your address. They then use this later as confirmation that you placed the order and send an invoice (usually just under $500). The interface for entering a company's info is open to the public so anyone can enter you in the directory. I've had battles up to the point that the bogus directory rep was actually screaming at me and threatening legal action in an attempt to get me to pay them off to go away (I didn't of course). I'm sure many companies just see the invoice and pay it assuming it's legit. The moral of the story, I guess, is always ask "why" someone needs the info before saying yes, or as Tangor mentions above...use alternate verbiage to avoid saying anything that could be cut and dubbed later.

Also, make sure it isn't just your accounting dept approving invoices but the person ultimately responsible for those budget items.

[frontpage]

Our company with multiple lines from Verizon often suffered from Cramming. A website charge, 411 services, advertising services, a FTP charge, etc for services from 3rd parties that we never ordered.

We would call Verizon and complain about the fraud. Verizon's response was that federal law required them to add services to the bill from 3rd parties. Verizon reps say they have no control over the issue and that we would have to contact the 3rd party to get the billings to stop.

Verizon would add these services to our account despite having our bill having an anti-cramming feature already and a requirement for a pin number to make changes to the account.

We got the last laugh though both on Verizon and these Crammers by canceling our multi-line phone account and going VOIP. No phone bill anymore.

Try adding services to that. LOL.

[Edge]

frontpage - I agree that Verizon tends to grow charges. Everytime I go to a Verizon store my bill shows with an extra charge that I did not order.

I love Verizons coverage and reception, however their business practices leave something to be desired. Watch that bill!

[pageoneresults]

I agree that Verizon tends to grow charges. Everytime I go to a Verizon store my bill shows with an extra charge that I did not order.

I think we're discussing two different things. Additional services from Verizon would not be cramming related. No, these are third party charges that appear in areas that may look like the telephone company's additional service charges but are not. They are third party charges that have occurred through other methods, in this case, via an initial telephone call where you may have said yes confirming your business information and have now found yourself a victim of cramming.

The type of cramming being discussed in this topic is more likely to happen with a business who have a website presence. This entire operation revolves around a business directory listing which you are billed $49.95 per month for.

P.S. Be proactive, contact your provider and let them know you don't want to allow third party billing to your telephone bill. Personally, I don't think it should be allowed out of the box. This is something the consumer should have to opt in for.

[Rugles]

New twist on an old scam. We have had several discussions of the "business directory" scam on the some other threads. I dont have time to find a link but there are here somewhere.

Absolutely, if somebody calls you about a "business directory" do not say the word "yes" and hang up ASAP.

[Edge]

I think we're discussing two different things.

Sorry, I was thinking big picture and did not clarify..

I think that phone companies need to properly vet third party partner charges billed through them to ensure the customer actually wants the new service. Failure to do so is a grey business practice at best.

Be aware that your primary phone service provider likely profits from the actions of a third party. "Buyer beware" - of whom?

[graeme_p]

Why does third party billing even exist? Are there legitimate uses for it? If you need to make payments, that what banks, credit vards, etc. exist for.

[pageoneresults]

For those who may be running into difficulty addressing cramming related charges on their phone bills, the LATimes published an article about this on 2009-08-12.

Bogus fees land on phone bills too easily
[Articles.LATimes.com...]

I've been informed by one person that was hit with cramming that AT&T responds to consumers letting them know that California Law prevents them from stopping the charges. Well, I find that hard to believe so I'm wanting to get a little more discussion going here on how the phone companies handle third party billing. According to the LA Times article above, once you call and complain about a charge on your phone bill, it is the providers responsibility to investigate.

Still, Diamond said AT&T won't hesitate to waive a questionable fee if an investigation shows that the fee wasn't authorized - which may indeed be the case but doesn't reflect Cohen's experience.

It was mentioned that there are monetary incentives for phone companies to allow third party billing - and there are. They may be taking a piece of the action in the process. I wonder how much money they make from third party billing that is bogus?

If you've got charges on your bill that you know were not authorized, I'd fight tooth and nail with your phone carrier, let them take the onus, investigate, and refund your monies. Based on my research to date, the companies doing the cramming are the last ones to contact, they're going to give you the runaround and continually lie to you while additional charges appear on your bill. Or, you only get credited for a portion of the charges. It's really a nasty business and the PUC (Public Utilities Commission) need to step up to the plate and STOP it.

[gpilling]

I am surprised that the members here are not all on VOIP systems. I have had my company on one since 2004. Saved a lot of money over the years.

[piatkow]

I am surprised that the members here are not all on VOIP systems.

Depends on the size of the business and the available means of connection at that location. Working form my home, the only way that I can connect to the net is down a standard telephone line so I would still have a phone bill even using VOIP.

[tangor]

I looked at VOIP and I looked at power outage. Not too long ago went through 13 days of no power (IKE), but I did have phone service (land line) so biz continued, even if I couldn't print invoices at that time. And all I had was dial up IF I COULD GET A LIFT from my neighbor with a gasoline generator for an hour or so each day. Phone worked anyway, no matter what. Think about it.

[gpilling]

Is 20 people in 4 different cities big enough? The benefits of VOIP systems let all the senior people have a VOIP phone in the office and at home so that they could telecommute if they felt like it. Both phones were the same extension, and would ring simultaneously. One guy took his phone to Mexico for a month each year and the customers never knew the difference. 20 phones, 6 800#s, interoffice transfer, voicemails, call menus, sales line queing, all for less than $400 per month typically. Phones were about $99 each if I recall.

I sold that business and now have 2 employees in 1 office with the same type system. Still happy with it. Went to Bangkok last fall and was able to make company calls from the netbook, with the caller ID showing up as the work #.

Power outage? So you could power your PC but not the router? Or you just took phone orders? I must be not understanding something.

The only major headache we had was that the DSL went out one day at the warehouse. We processed orders by SMS for that day which was no fun. The next day I had a second Cable internet connection ordered. In 6 years that was the only major headache.

Your situation may vary. But it would prevent the OP problem. You still get idiots calling to tell you that they can get you #1 in Google for $49 per month, but that is a different problem.

[tangor]

Sorry for the side track of the OP... but as far as VOIP (or computer services) a natural disaster generally makes all of that moot. Whereas land line phones (self powered as long as the lines are intact) will work. And that don't mean a hill of beans if there's no power for computer based devices to work...after their battery power dies, and that dies anyway when the intermediary (ISP) is gone for same as above.

Just a been there, done that, don't want to do it again reminder that putting all eggs in one basket is not a good idea.