Telemarketer Blows Whistle on Tape-Altering Scam

Recently, Florida-based telemarketing firm Epixtar is frequently accused of cramming an extra $30 onto phone charges of small businesses, yet has proof of legality by recording their calls. Until they laid off some people, one of whom has blown the whistle. The companies' cramming tactics become "legal" by altering those taped recordings to include a quick statement about the $30 charge. MSNBC has the article, including a short audio clip of a sample call.

Morality?

[dogbox]

What happened to people reporting this sort of stuff before they had a grudge against the company? Why do only former employees report this sort of thing?

Re:Morality?

[Anonymous Coward]

Remember, these are people that formerly worked at a telemarking company. Therefore, you can conclude that either (a) they are soul-less, amoral creatures that sometimes can pass for human beings, or (b) they were really, really desperate for a job and had a family to feed. Either way, they're not likely to rat out the boss, are they?

on a similar note via snail mail

[phantomlord]

This week, I received a solicitation which was deceptively in the form of a bill from Internet Corporation Listing Service (ICLS). For $37.50, they offered to list my domain in a whopping 14 search engines.

The solicitation most definitely looked like a bill (front page [krwtech.com] and back page [krwtech.com]). The bottom half of the page is a tear away bill stub and the solicitation notice on the top right hand corner is in a lighter font than the rest of the text (though it's harder to notice on the scan).

Fortunately, I'm in the habit of reading all of my bills when they come in, but some people aren't. They obviously got the information from the internet WHOIS database even though that database is explicitly protected by a clause saying you can't datamine from it.

The next morning, I filed a complaint with the United States Postal Inspectors because of the deceptiveness and the likelihood that others will be fooled by it. Here is the complaint I sent:

I received a solicitation from ICLS which deceptively looks like a bill. Located on it, is a tear-away payment stub with a customer number, due date and amount with no reference to the fact that it's actually a solicitation on the stub. On the upper right hand corner, it does state "THIS NOTICE IS A SOLICITATION AND RECEIPT OF PAYMENT WILL CONFIRM YOUR ANNUAL LISTING", however, it is a lighter font than the rest of the solicitation.

While I, fortunately, did not fall for the solicitation, I'm concerned that other people whom aren't as careful could easily be deceived as without close examination, it will appear as a bill.

I'm still waiting to hear back from the postal inspectors to see what they have to say.

How fast can you speak?

[grungebox]

So, I know Epixtar added their "lightning-quick" phone-bill-altering deal to the tapes after the fact. However, what I want to know is: Is there some sort of legal requirement for how slow/quickly such statements have to be said? I mean, car commercials/ads routinely have quickly-spoken disclaimers at the end of ads and such. If Epixtar had merely tacked on the "we can alter your bill" or whatever phrase, only spoken at a Micro Machines guy speed so it seemed like crackly phone noise, would that be legal?

Re:on a similar note via snail mail

[Anonymous Coward]

There are quite a number of the "order form that looks like a bill" scams. The trick seems to be to hit the right ammount, high enough that it *must* be real but not high enough that people try to track down who bought the thing.

A company I work for got hit for one that was a $400 bill to be listed in their directory of companies. Which they no doubt sold to other scammers as a "soft touch" book.

There is a flip side to this. If your telecom or ISP overbills you, consider sending them an official looking bill to Accts Payable for the ammount, just listed to "bill correction". If they pay up, then pay the full amount on your bill and go your merry way without the long 3 hour waits on the phone disputing everything.

Re:what's the obsession with spam?

[Technician]

It almost is a good enough reason to drop the landline entirely. It adds to the TCO of a landline.

Somehow I see E-mail dying (replaced by online feedback forms) and Landlines dying (replaced by VoIP and wireless).

Any good technology can be turned into trash with the right tools.

"Anonymous Call Blocking"

[exhilaration]

Give your phone company a call and ask them to turn "Anonymous Call Blocking" on. It should be free. Then anyone blocking their caller ID will get a message like "This phone number does not accept anonymous calls. Thank you."

This will eliminate a small number of telemarketers - the rest will get through because they're calling from overseas and would have simply shown up as "out of area" or blank on your caller ID unit.

Another low trick

[bgeiger]

This actually happened to my dad. Keep in mind my dad works nights, and typically sleeps all day.

Telemarketer: "Hi, my name is [somebody] and... excuse me, can you hear me?"
My dad (still groggy): "Yes."
Telemarketer: "I'm calling to offer you suchandsuch a service... [blah blah blah garbage]"
Dad: "I'm not interested. Goodbye. *click*"

Next month, he notices his long distance service has been changed to (I think) AT&T.

They used his "Yes" answer to an irrelevant question, and turned it into a "sale".

People like that should be thrown in jail.

Re:Morality?

[Henry V .009]

As a consequence, she left her weapon in the car when she came to work.

Yeah, that makes your company a lot safer. Instead of having the gun in the hands of a female -- trained at its use, at that -- it's out in the parking lot. The first person to break into that car and find it will present a million (actually far more) times the threat that woman did. And the gun won't be there -- again, in the hands of a woman trained in its use -- in case it is ever needed.

I don't know how you feel about the whole situation -- you probably aren't responsible for the decision -- but I think it stinks.

Re:How fast can you speak?

[ocelotbob]

Is there some sort of legal requirement for how slow/quickly such statements have to be said?

Yep, saying it extremely quickly is still a deceptive business practice, and thus a dispute would be covered by normal legal methods. Still a hassle, as the telcos have rather stupidly decided that you can't set it up so you have to have written authorization before people can add items to your bill; though it's fraudulent to tack things onto your phone bill, might as well make it difficult to do so.

Re:Morality?

[tedDancin]

It's often better to voice your concerns internally, and work to improve the system from within.

It makes you wonder what the laid-off employees (especially the whistle-blower) did to try and restore morality internally before going to MSNBC. Would you complain to management if you knew they would never/weren't intereseted in resolving the issue? Or would you just take the final paycheck and go tell the world?

The media is a powerful tool for an employee with little or no power inside their company.

"Put me on your don't call list"

[billstewart]

The standard thing to say to them in the US is "Put me on your don't call list". Almost all of them will. The last telemarketers I talked to for longer than that were

• One that was unclear enough it took a couple of minutes to figure out quite what he was calling about to figure out that he was a telemarketer.
  
• MCI, because I wanted to hassle one of their supervisors, because I had already asked to be on their don't call list (their system isn't bright enough not to apply the list to multiple phone numbers at the same household, and they were calling my modem. And I work for a telco, and not only did their best rate not beat our employee discount, their employee discount wasn't that hot either. But that was some years ago, and neither is ours now :-)
  
• The California Narcotics Officers Association, or actually a telemarketer selling for them. They were the sleaziest, most evil cause that's ever called me on the phone. Not only do they run a "charity" that gives money to cops for violating people's individual human rights, they lobby for more drug laws and against medical marijuana, because their business would be hurt if people didn't consider their political correctness to be more important than pain suffered by cancer patients. I wasn't able to talk the telemarketer into stopping promoting them, but I did talk to several people there about them.

Re:Morality?

[Anonymous Coward]

Currently I have a good secure job and am earning enough to support myself. In an ideal world, I might tend to agree with you. I am enough of an idealist that if I find money on the street and can't find who it belongs to, I give it to a beggar, because it's not *my* money.

In university I ran out of money on my meal plan at the end of one semester. This meal plan was only pre-paid for dinners. I didn't have any more money in my account, because my parents weren't willing to support me in college, and I had already used the money I had earned in my summer job to pay for books, room and board and tuition. What did I do? I stole food from the cafeteria for two weeks. I simply didn't see any other choice. The next semester, I managed to make my meager meal plan last through the whole semester by eating less at every meal during the semester. During that year, I lost 16 pounds (and I was at 128 at the start of the school year, so that wasn't exactly my spare tire)

Since then, I'm willing to put on high standards for myself. But I can understand why someone who is starving might consider choosing a dishonest way of feeding themselves. Add hungry kids to the equation and I would even consider it morally correct (as long as it really is a last resort, and you're not causing someone else to go hungry by doing so).

I doubt that all, or even most telemarketers are in the position of having to choose between not eating and performing a dishonest job. The statement that some are, is however plausible. So although I do hang up on them, I do so without any anger towards the individual who called me. My anger is reserved for the company who exploits desperate people to perform dishonest work.

what are the stipulations?

[CAIMLAS]

EXACTLY. Having been forced into telemarketing for a short period of time myself (due to financial reasons) I can attest that very few people that are able to continue telemarketing work full time have no souls. I didn't last 40 hours, and the only reason I lasted that long was because i had my fiancee providing emotional support, and I couldn't afford to quit.

In my mind, telemarketing is about as self-damaging as prostitution. I'd probably put it up there on the moral scale, too. Its time we see religoius groups going into telemarketing offices and trying to save their souls.

Actually, I think that a prostiute is lest morally detestable than a telemarketer - at least prostitutes can feasably enjoy their job, and it pays better.

Re:Morality?

[mark-t]

As I said though, sudden demotion of duties or wages constitutes as substantiated evidence of "constructive dismissal", which is where the employer makes the work environment so unsuitable to the employee that he or she feels forced to quit. Where I live, a former employee suing for constructive dismissal is entitled to (in addition to legal fees) one year's worth of wages from his former employer, which is supposed to supply living expenses during which the person can search for another job.

Re:Morality?

[KDan]

It's also called "mobbing". It is indeed illegal.

Daniel

Make No Mistake -- This Is Organized Crime

[LaCosaNostradamus]

The overall situation is worse than the article leads you to believe. This is something that I wouldn't expect to see fully explained on any major news site like MSNBC. The situation is thus: You don't need any proof -- or real proof -- in order to steal money from people via their phone bills.

Back in the 1990s I began to realize that a phone bill became viewed as a charge account that organized crime could tack charges onto. This accusation includes organizations like AOL. Charges for goods and services -- delivered or not, worthwhile or not -- could be tacked onto the billing statement, which would be automatically sent and almost automatically paid for. It was simply too good to believe for mafiosi large and small ... but by 1997 I could only change my own behavior in response to the groundswell of all the legalized fraud that was going on. By that year, I knew that I had to hangup immediately to avoid entanglement with a calling telemarketer, and that my phone bills had to be carefully scrutinized every month. *

This new environment has encouraged sociopathic wariness to contact with businesses. Congratulations, Corporate America!

By 1998, I could clearly see a workable but fraudulent business model arising. It's relatively simple ... you issue about 10 thousand blatantly false charges to 10 thousand homes and small businesses via your "Internet service company" and collect from the percentage that don't bother to (effectively) fight your fraud. The next month, you go after another 10 thousand addresses. After a year, you'll have to close down the business to stay ahead of the cops, but by then you've accumulated over half a mill. You pay yourself well, your mafioso helpers okay, and then invest in the next scammer slammer business.

You don't need vox proof of anything, but such things can be falsified when necessary. One anecdote (names altered) springs to mind of what happened within my circle of friends. I know a small, used bookstore named Smather's Books, run by Ms. Smith. One month she noticed a $29.95 item tacked onto her small-business phone bill for "Internet Yellow Pages service" (or something like that). She called to investigate, and when she finally got to the right person at at the IYP service company, they played a recording for her from "Mister Smather". On the tape she clearly heard Mr. Smather authorizing the IYP service.

This would all be fine and dandy, except for the fact that there is no Mr. Smather.

"Smather's Books" is just a name she made up that was close to her own name. The tape was falsified. Even after she pointed this out to the IYP company, she didn't get very far with them, and only after complaining to the telco did the charge get dropped from her bill.

The use of threat and deception to acquire money is morally criminal. Make no mistake at all on this telemarketing and other boiler-room matters ... much of it is organized crime, and it should be treated as such. They should be arrested, charged and prosecuted for what they do. Hopefully when arrested they try to resist and are shot dead on the spot.

* By 2001, I no longer answered my phone, preferring to screen all calls.

Re:Morality?

[sco08y]

This wasn't just any former employee.

This was the guy who handled refunds. Everyone knows how much shit telemarketers get and how high the turnover rate is for them... imagine being the person who has to stall people who have figured out they got scammed. Then imagine when it dawns on you that they're not just idiots who don't pay attention, but that your company really *did* scam them.

Is it really possible he could be in this position *without* holding a grudge?

And I don't think you can assume mixed motives are a bad thing. E.g. if you lust after someone, does that necessarily mean you can't truly love that person?

Re:Morality?

[echucker]

But when it's illegal (or deeply unethical) you have a moral duty to blow the whistle, even if it's going to suck for you. You aren't allowed to put ethics aside because they aren't convenient.

Personally, I think that's easier said than done in today's economy. I think a lot more people may find feeding one's family and paying the bills a little more important.

Re:Best way to handle telemarketers...

[DiveX]

No the best thing to do is to exercise your rights. Saying you are not interested and hanging up does nothing. They can continue to call after that. You need to SPECIFICALLY demand that your name be placed ON their Do Not Call list (i.e. not removed from some other generic list...this is important). Then demand a copy of their written policy regarding the maintenance of their Do Not Call list. They are required to send this do you as a matter of federal law (47 USC 227 - Telephone Consumer protection Act of 1991). Then if they continue to call, sue them in court for damages that are owed to you by statute.

Re:Morality?

[darkmeridian]

Maybe the whistleblowers are working with a sense of revenge, but ratting out the company also covers them from legal problems. If they took part in the fraud (like actually altering the tapes) and they get caught, the PHBs will claim ignorance and let the peons take the fall.

Also, as far as business ethics, it is important to document internal attempts at redress before going public. Read about the A-7 brakes. (On 28.8 connection, so no link for you.) Basically, the company was selling the Navy airplane brakes that couldn't possibly stop the plane without bursting into flames. One man tried to fix the system internally before he blew the whistle. Required reading (literally) on ethics.

You should have the RIGHT to phone bill integrity.

[YoungHack]

A lot of scams could be nipped in the bud by
one simple right. I should have the RIGHT to
request that only my phone company put charges
on my phone bill.

My cable company does not put charges on my
electric bill.

My electric company does not put charges on
my gas bill.

My gas company does not put charges on my
water bill.

But my phone company tells me that by law they
must put charges on my bill from carriers, even
if I don't have a business relationship with
them.

Of course you have the right to remand a charge
and have the company bill you for it. But you
have to notice the charge first. I'll tell you,
the phone bill is the one bill I scrutinize every
month. I have had several fraudulent charges on
my bill in the last 5 years.

If scam artists had to bill you direct like any
other business, that would not eliminate fraud,
but it would keep people from going 8 months
without even noticing.