Crime doesn't pay? It does if you're a phone crammer

A yearlong Senate investigation of "cramming"—in which mystery fees appear on phone bills—finds that the practice is lucrative for both the crammers and the phone companies.

<a href='http://meincmagazine.com/tech-policy/news/2011/07/crime-doesnt-pay-it-does-if-youre-a-phone-crammer.ars'>Read the whole story</a>

 

[bthylafh]

The free market will take care of this by itself!

/sarcasm

 

[TomXP411]

What I want to know is how services like this even exist in the first place... with these wonderful computer things we have, it's a simple deal for a telephone company to call you and authenticate the addition of a carrier-billed service. The idea that someone can just slap a "subscription" on to my phone bill without my consent or knowledge is kind of scary.

 

[midorinome]

Or give us a damn "National Do Not Cram" database, so no 3rd party charges can be added. Or change the laws so you have to "opt in" for charges, which can only be opted in by calling say Verizon or your telco DIRECTLY. Maybe some sanity could be brought to the situation?

 

[jandrese]

It doesn't even have to be that sweeping, simply require the phone companies to call you up and verify that you want a particular service.

The only way to make this happen however is to make the phone companies liable for all cramming charges if a company is found to be in violation. Force them to return the money to the customers and suddenly they'll take notice. As long as it's profitable for the phone companies to turn a blind eye towards this practice, it won't stop.

I would be a little concerned about shutting down the practice entirely, because it could kill off stuff like near field payment systems that are already popular in some parts of the world (wave your phone at a soda machine type stuff).

 

[Schmads]

The free market will take care of this by itself!

/sarcasm

For the purpose of fomenting productive discussion (more so than your throwaway post, at least), can we look to the free market to at least give us better options? For instance, does every phone company allow third-party billing like this? There are a number of different landline and wireless companies, from AT&T and Verizon to Cricket and Boost. Do all of these companies allow third-party billing? For instance, if I was given the run-around on the cramming like Nate was in 2008, I would have dropped that carrier. It isn't always this simple of course, but that's the traditional way for the free market to resolve issues.

 

[crestfallen]

I hear what you're saying, but I think "go somewhere else" isn't a good solution in the free market. I mean sure, it will fix it. But the larger issue is why companies are allowed to simply charge you for something you didn't ask for, at all. The logic on that gets scary pretty quick.

 

[Shyatic]

The sad thing is that this is only skimming the surface in terms of what illegal and unethical things happen in America. The consumer protection bureau that would be headed by Elizabeth Warren is meeting huge opposition because both parties in Congress are happy with the status quo; they just represent different brands of criminals.

Let's face the facts folks... the US is a criminal's playground, and the bigger the heist, the more legal it is. That's why the only people who are in jail are minor drug users and Bernie Madoff, who ran a scam as bad as anybody else except it was really, really obvious.

I won't be voting for anybody with a (D) or (R) tag ever again.

 

[jgtg32a]

From my understanding "The Communication Act of 1996" requires them to grant access to third parties to offer services over their lines.

Also, you can call up AT&T and Verizon and tell them to turn this foolishness off.

 

[SomeRandomName]

The free market will take care of this by itself!

/sarcasm

Umm...

This billing policy was created due to federal regulation. It was meant to allow long distance carriers to compete with Ma Bell after the break up.

Ironic that you blame the free market when it's caused by the government, don't you think?

 

[pen_sq]

The only way to make this happen however is to make the phone companies liable for all cramming charges if a company is found to be in violation. Force them to return the money to the customers and suddenly they'll take notice.

That's what's already happening. If you are so eagle-eyed to notice it amongst the [a href="http://www.catb.org/jargon/html/M/MEGO.html"] obfuscating taxes and compliance fees[/a], and call in, and stay on hold, and not get hung up on, they'll be more than happy to refund your money, if you can communicate so in a common language. There's no deterrent at that, the 499 other customers that fell off somewhere short of your merciful refund are more than enough to keep the train rollin'.

Edit harder: And doing it on a per-billing company level don't work, either. By the article, these companies are running several frontmen. The "company" starts with some twinkie-sucker clipping an advert from the back of The Weekly Star, to sit at home and make $$$ by being your own business! If only there were some sort of law to bring down the guys running this scheme, to remove the top from these cons' spire, see?

/Who knows what markup lurks in the heart of Ars?

 

[Septimus Prime]

Where would one spot this kind of thing on a phone bill? And does this affect only landlines or everything (cellular, cable, etc.)?

 

[kranchammer]

The free market will take care of this by itself!

/sarcasm

Umm...

This billing policy was created due to federal regulation. It was meant to allow long distance carriers to compete with Ma Bell after the break up.

Ironic that you blame the free market when it's caused by the government, don't you think?

Problem: Issues arising from badly thought-out government policy.
Solution: More badly thought-out government policy!

 

[AceRimmer]

I hear what you're saying, but I think "go somewhere else" isn't a good solution in the free market. I mean sure, it will fix it. But the larger issue is why companies are allowed to simply charge you for something you didn't ask for, at all. The logic on that gets scary pretty quick.

The answer to that question is always the same: these companies are paying your elected representatives for the privilege of taking your money.

 

[iandisme]

I recently took over as the secretary/custodian of records at my fraternity. I found charges from "PaymentOne" on both of our phone lines totalling $100/month. When I called to find out what they were, they were for "online web hosting, search optimization," and a bunch of other "business features" that we weren't using; we don't even have a web site. I told them to cancel the services, so they said that they would. They even gave me a confirmation number. Next phone bill, they were still there. So I had to call AT&T and have them block the payments. What a hassle. This is a total scam and it should be illegal.

 

[CUclimber]

I recently took over as the secretary/custodian of records at my fraternity. I found charges from "PaymentOne" on both of our phone lines totalling $100/month. When I called to find out what they were, they were for "online web hosting, search optimization," and a bunch of other "business features" that we weren't using; we don't even have a web site. I told them to cancel the services, so they said that they would. They even gave me a confirmation number. Next phone bill, they were still there. So I had to call AT&T and have them block the payments. What a hassle. This is a total scam and it should be illegal.

It's SOP for companies like this to latch on to "clients" where their little fee is so small in relation to the overall monthly expenditures that they won't even be noticed. I've seen it happen to friends' businesses too.

 

[3.1416]

The free market will take care of this by itself!

This is blatant fraud, the prevention of which libertarians recognize as one of the necessary functions of government. The heads of the cramming companies should be in prison, and the phone companies should be charged as accessories.

 

[DoomHamster]

/Who knows what markup lurks in the heart of Ars?

BBCode. I had the same problem.

EDIT: Now with Linkety Goodness!

 

[podunkboy]

I had this happen twice this year, finally told AT&T to put a block on all 3rd-party billing on my account. Next time it happens, I change my phone and internet to someone else.

 

[notovny]

From my understanding "The Communication Act of 1996" requires them to grant access to third parties to offer services over their lines.

Also, you can call up AT&T and Verizon and tell them to turn this foolishness off.

And if you can't think of a good reason why you'd need it, and the phone company can't give you sufficient reason, you probably should. Doubly so if you're auto-paying your phone bills.

After all, any legislation or self-regulation will probably be at least months in the making,

I got hit by cramming last month. Luckily, since I pay my bills manually, I caught it the month it happened, and was able to get the charges reversed, amd requested 3rd-party billing disabled on my landline. AT&T said that doing so before the credit posted might cause problems, but I'd rather have eaten the $20 than allow any other company to do the same without my consent. As it turned out, the credit posted fine.,

 

[Nate Anderson]

Or give us a damn "National Do Not Cram" database, so no 3rd party charges can be added. Or change the laws so you have to "opt in" for charges, which can only be opted in by calling say Verizon or your telco DIRECTLY. Maybe some sanity could be brought to the situation?

You can generally block all third party charges with your phone company, but it's possible this could create problems with legit charges (if you have a third party long distance company that bills directly on your phone bill or whatever).

 

[oldcoot60]

The only thing the phone companies see is the PROFIT they make from the crammers; the phone companies make a percentage of the bill as a fee for collecting the money. There is zero reason for the phone companies to care whether or not the crammers are legit in any way. No company is going to give up profit making services without a fight.

The only way out of this is to totally disallow third party billing, period. If a company wants to do legitimate business with you they can find a legitimate way to bill you.

A lot will depend on how much money the crammers and phone companies can slip to Congressmen and the FCC to allow it to continue.

 

[astropheed]

Unfortunately, there are still tons of similar scams going around, doing through third party charges. It is interesting that Apple just released an iPhone app a few days ago, called Scam Detector, which exposes in detail over 350 of the most notorious scams in the world. Lots of them are related to cramming. It is worth checking it out, if you have an iPhone. There is their info: http://www.scam-detector.com. Kinda cool, actually.

That app sounds like a scam to me.

 

[UltimateLemon]

They were the exact same games with the same graphics. It appears EZPhoneBill has charged thousands of telephone customers for "casual online gaming services" they are not using and that can be accessed for free on another website.

Did anyone bother to investigate if this is a case of commercial copyright infringement?

 

[Totality]

"This billing policy was created due to federal regulation. It was meant to allow long distance carriers to compete with Ma Bell after the break up."

Nothing in the policy requires the phone companies or the third parties to rip people off, anymore than laws allowing financial trading causes embezzlement.

 

[thepasswordispassword]

Unfortunately, there are still tons of similar scams going around, doing through third party charges. It is interesting that Apple just released an iPhone app a few days ago, called Scam Detector, which exposes in detail over 350 of the most notorious scams in the world. Lots of them are related to cramming. It is worth checking it out, if you have an iPhone. There is their info: http://www.scam-detector.com. Kinda cool, actually.

That app sounds like a scam to me.

If anything it reads like an advertisement from an account registered immediately before it's one and only post.

 

[KidSizedCoffin]

It would be nice if they could crack down on the advertising of these products. Watch late night TV on almost any channel, and you'll see ads for downloading a free game, a free ring tone, or finding out which member of the Jersey Shore you are. If your TV is clear enough, you can see the monthly fee for the free item in the fine print in the last second at the end. These ads almost always seem aimed at the under 18 crowd.

 

[orangebag]

There is their info: http://www.scam-detector.com. Kinda cool, actually.

That app sounds like a scam to me.

If anything it reads like an advertisement from an account registered immediately before it's one and only post.

Certainly is.

The youtube video is hilariously poor. The voice over guy is probably the same one who does ads telling how to make money at home.

We see an interview with "Paul Mennier. Former Canadian Journalist". Yes it actually says that. We should listen to this man because he is a former Canadian journalist.

Can a mod please delete MireilleZ's post and preferably account too?

 

[dlux]

It doesn't even have to be that sweeping, simply require the phone companies to call you up and verify that you want a particular service.

Oh joy, more telemarketing. No thanks.

The only way to make this happen however is to make the phone companies liable for all cramming charges if a company is found to be in violation. Force them to return the money to the customers and suddenly they'll take notice.

No they won't. They'll return money to the 3% who notice and complain and then pocket the other 97%. That's a disincentive?

I would be a little concerned about shutting down the practice entirely, because it could kill off stuff like near field payment systems

You want to hand that billing role over to the phone company? If I ever consent to a new service that involves my phone I'll deal with the service provider directly. I would never trust a carrier to handle the billing.

 

[dlux]

Ironic that you blame the free market when it's caused by the government, don't you think?

The government is cramming these phone accounts? No - it is private entities who are doing it. They found a loophole in the change of regulations and abused it. Time to close the loophole, not trust these partners-in-crime (carriers and third party 'affiliates') to altruistically enforce their own behavior.

 

[will482]

Does anyone know if there is a website (not iphone only) that has advice specifically on a range of telephone complaints ?

My issue was being billed by my UK BT landline phone company for 4 reverse-charge calls without the Spanish-speaking operator informing me. I don't even speak Spanish. I had recently been to Cuba on holiday and not long after received a call from a local I met briefly there, and who had asked to exchange numbers in case of meeting again. When I received the first operator connected call I was not that surprised as when I booked the hotel before going to Cuba, I had to make an operator connected call (spoken in english) to send a FAX as STD dialling wasn't working. However, the 4 incoming operator-connected calls a few months later all I heard was my name, no request to accept a charge.

Does this come under 3rd party billing ? After getting a 4th call (requesting help to obtain a visa) I sensed something was wrong and called the UK operator immediately after who said I had been billed for the call.
I complained, pointing out 1) the Spanish operator never asked me in English if I would pay for the call, 2) in 35 years with BT I had NEVER accepted or billed a reverse-charge, 3) the quarterly bill 3 times higher than normal as result of unagreed charge, and clearly not my profile. 4) this was the first time in 35 years I had disputed their bill. They refused my complaint. Someone told me reverse-charge calls record the payers agreement, so I asked for proof I agreed to pay and to bar reverse-charge calls. Told can't bar such calls. Further complaint brushed aside. I switched my phone-provider for 1st time in my life - which they tried to prevent - as the BT monopoly had not long been illegalised. What protection is there from this ?

 

[chimly]

Why is there a special term for this? It's false billing. Plain fraud.

Don't let criminals invent euphemisms...... "cramming"

 

[Fritzr]

What I want to know is how services like this even exist in the first place... with these wonderful computer things we have, it's a simple deal for a telephone company to call you and authenticate the addition of a carrier-billed service. The idea that someone can just slap a "subscription" on to my phone bill without my consent or knowledge is kind of scary.

They exist because it is "a simple deal for a telephone company to call you and authenticate the addition of a carrier-billed service."

It shows up as a line item on the phone bill detail pages. It is up to the subscriber to contact the phone company to ask about the mystery charge and to later ask them to block that company from your account when you have spent a few months paying the bill while trying to get the "service" cancelled.

The 3rd party service pays the phone company a service fee for handling the billing & they can block each service on a per subscriber basis on request. Canceling the 3rd party billing would kill the golden goose. They are not quite that dumb Of course you do have the option of switching to the competitor's phone service hoping that such exists and does not support the same scam.

 

[Fritzr]

Where would one spot this kind of thing on a phone bill? And does this affect only landlines or everything (cellular, cable, etc.)?

Your bill should have a line item for "Other Charges" on the summary page and a break out with the company name as the description in the "Billing Detail" pages where all the individual charges & credits contributing to the bottom line are itemized.

This applies to any bill you are asked to pay. Even the invoice for your new keyboard may have a mystery charge appended. Be wary and read the details before paying.

 

[JimboPalmer]

If you do not have a phone bill, this never happens.

 

[Sypcivicus]

I would be a little concerned about shutting down the practice entirely, because it could kill off stuff like near field payment systems that are already popular in some parts of the world (wave your phone at a soda machine type stuff).

I'm not sure that could relate as waving your phone at something is essentially a signature whereas this article focuses on altogether bogus charges. I like your carrier accountability idea, but I'd rather assume just do away with the whole system. It's from an outdated era.

 

[Doug Dolde]

I got crammed once on a Verizon land line. When I called. VZ they told me I must have authorized it. NOT ! I told them it was fraudulent then killed the service. Who needs an F'n land line anyway ?

 

[Bob.Brown]

Actually, it's their butts that should be in prison. I have a less savory place in mind for their heads.

 

[S-T-R]

What I want to know is how services like this even exist in the first place... with these wonderful computer things we have, it's a simple deal for a telephone company to call you and authenticate the addition of a carrier-billed service. The idea that someone can just slap a "subscription" on to my phone bill without my consent or knowledge is kind of scary.

Heh. The carrier does it themselves. While I was still hawking cellphones for AT&T, management told us in thinly veiled terms (but intent was crystal clear) to cram whatever we think we could get away with on every account. We only had to tell people they were getting a free promotion, as the first month was free on all the crap they didn't want. That was doubly-good for the carrier, as most people will scrutinize the first bill after switching/upgrading, but not the one after that.

Telecom is a dirty, dirty business run by shady, shady people.

 

[Nagumo]

Of course crime pays. How many poor politicians do you see?

The problem here is so very large with so many areas to correct. For starters, people really need to scour their monthly bill (whether they still get snail mail or an electronic version) with a fine toothed comb. Anything that looks remotely out of place should have you on the phone to customer service and then the billing disputes department immediately.

Next up is legal repercussions for the cramming companies. These companies need to keep on file actual proof that you requested a service (a signature, credit card #, something where the owner of the line requested the service) to be provided upon complaint. If the crammers choose not to do so, or they can't offer up any proof, they should be subject to repaying DOUBLE all charges they placed upon the bill as a punitive measure (already makes cramming less tempting - eh).

Finally is the legal repercussions for the phone companies. The telecom companies track the number of complaints about crammers just like credit card companies keep track of customer complainants about companies adding fraudulent charges. When we have a scenario like the one mentioned in the article where there are clear internal e-mails complaining about how abusive some cramming companies are, by the telecom's own tracking stats no less. Then it's high time to fine the shit out of the phone company to the tune of quadruple the amount of all fraudulent charges by said crammer. The penalties for profiting from known fraudulent charges should be met with such repressive fines as to make the practice beyond unprofitable. But, these are telecoms, not end users sharing a few songs via P2P software for noncommercial endeavors - so forget about insane fines like $150,000 per infraction (after all, it's not like AT&T or Verizon could afford a million dollar fine or anything).