FTC Puts $1.9M Kink in Phone Bill Crammer's Wallet

coondoggie writes to mention that the three largest companies in the billing aggregation market have been hit with a $1.9 million fine in response to the more than $30 million in bogus charges added to consumer's bills. The ringleader of the scam however, Willoughby Farr of Nationwide Connections, has been hit with $35 million and a lifetime ban. "Today's settlement would prohibit the companies from misrepresenting that consumers are obligated to pay for telecommunications charges that have not been expressly authorized. It also would be barred from billing or submitting any telecommunications charges for billing on a consumer's telephone bill unless such charge has been expressly authorized. [...] The FTC still has a case pending against other principals in this case: Yaret Garcia, Erika Riaboukha, and Qaadir Kaid. One other defendant Mary Lou Farr, has already settled with the FTC."

Re:That's not the only thing.

[Anonymous Coward]

DO NOT CLICK!

I just clicked. Now I have to go wash out my eyeballs with bleach. :(

My Bill is always wrong

[FredFredrickson]

Here's how it works, They overcharge you an extra $1.

Some percentage of their cusomters will notice the $1, while most may not notice at all.

Out of the customers that notice, X amount will take action and call the company

The company Rep will respond that instead of receiving and immediate refund, they will put the "refund" into the system and it may take a while to process.

1 Month goes by and out of the small percentage that took action a month ago, a smaller percentage will realize that the refund never went through and call again.

The Rep will apologize and either deny the refund's existance, claim to "not have access to the records," or some other BS excuse. They will promptly "issue" a refund for you.

You may at this point recieve a $1 credit to next month's bill. Never a refund.

So by the end, 3-5% of the mis-billed customers may actually get their refund/credit. During the one and a half months it took to "process" the refund/credit, company that handles billing made X% interest on the overbilled cash. They made out like bandits on the refund thanks to the fact that it's done in such mass quantities. It benefits the company largely to have billing errors.

The other 95% of customer who never noticed lose $1 each. Cumulatively, the company with a 30 Million subscriber base makes $28 Million off a single billing error.

Of course, to make it look like a mistake, there won't be a 100% customer base billing error, but you get the idea.

The only way to rectify the issue is demand not only a refund but also interest on the money they stole, as well as credit towards the administrative overhead it took for you to navigate their phone menus for hours on end.

Re:That's not the only thing.

[poetmatt]

That website is worse than goatse. What the heck is wrong with trolls countering trolls with these nasty anon posts lately?

Re:What about Telcos?

[the_rev_matt]

I just called to get one of these scam voicemail services removed from my account (interesting: if you called the number the voicemail was supposedly active for, it would ring 15 times then go to fax tone). The rep from the VM company indicated that pretty much anyone can sign up pretty much anyone else for this voicemail service on some web page somewhere and the company doesn't care because they can bill it.

The rep from ATT was pretty bothered by my explanation of what happened and opined that there was no way it should be legal and that it was bad business for ATT to even bill for this crap. Then he spent 20 minutes going over every service we have on our account and giving me the lowest price available for the ones we wanted to keep and eliminating the rest. Cut my bill by about 30%.

RTFA

[bkaul01]

The $1.9 million restitution agreement is in addition to the almost $35 million the FTC is collecting from the person the FTC considers the ringleader of this scam, Willoughby Farr of Nationwide Connections.

They're confiscating the full amount, plus fining them an additional $1.9M. So, the guilty parties will have lost at least $2M on the deal once legal costs, etc. are accounted for. How is that not a deterrent?

Re:My Bill is always wrong

[xstonedogx]

Comcast is doing exactly this with me now, only the problem is $17.99.

I picked up a new box at the store (to get HD content). They didn't activate the box properly at the store. (I don't believe it was an accident, because the same exact thing happened to my dad not a month before it happened to me - and we are in different areas.) I contacted tech support and they couldn't activate it from there either. I don't think they even tried because the box literally did nothing when they said they tried. They told me they would have to send out a tech, but did not mention anything about having to pay. The tech was here for about two minutes, did exactly what I did over the phone with tech support they were miraculously able to activate the box.

I contacted them and told them to pound sand. They said they would refund the money. They didn't refund me the next month. My next bill should appear any day now. Since I received the same exact canned response, I don't expect to see a refund this month either. Won't they be surprised when I issue a charge back with my credit card company, complain to the FTC and others, and become a former subscriber.

The part that really pisses me off is that I was already paying them more than most customers probably pay (I'm a stay-at-home dad until Fall, so I can justify it pretty easily), and by adding this box I was actually increasing my bill.

My Own Experience

[CyberGarp]

So one day I discover that Sprint is my long distance carrier at $5/minute. I protest the "slam" to the FCC. The FCC rules that its a valid transfer, since it came from a website and they don't regulate those transfers.

I tell BellSouth and Sprint that I will only pay the fee my original carrier I had negociated (40c/minute to east europe), otherwise I will see them in court. I document every correspondence, record every phone call. Each time I send them another letter saying I'm not paying for a service I didn't ask for, I include a xerox of all previous letters and transcripts. The packets grow thicker and thicker.

My stance was simple, You can't make me pay for something for which I didn't agree too without a contract. The FCC was off base ruling that this was legit. Please produce a signed or verbal proof of a contract with Sprint. BellSouth kept trying to collect for sprint and this went on and on.

So I sent a letter that if something didn't happen I would file in court and we could resolve the situation there.

Then the call came, "Ahhh, Mr. Garbett, we've been reviewing your file. You are talking about challenging our arrangement with other service providers under contract law is this correct?"

"Yes"

"Well, you have to understand that's a delicate matter. No one has done that before. We make a lot of money off this arrangement. How does a year of free service sound?"

"Okay"

"So you agree to drop the matter, and we will credit you for a years service based on your history and drop the charge-- Do you agree to these terms."

"Yes"

And there it was, a year of free service. I've been waiting for several years since then for a large enough abuse of this system that a class action forms. I find it all mildly amusing.