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>

 

[Silkstone]

I had something very similar happen not long ago, but rather than a service it was with text messages.

I had just bought a 3G dongle for my laptop which included a pre-pay sim. The next day i put $50 credit on so as to last me the year. A short time later, i check my balance and it's been reduced to $5, in the space of about 3 hours a company had sent me 60 sms messages, with zero content and which i got charged for.

I promptly spoke to the phone provider and they informed me there was nothing they could do nor could they even block the service.

So at the moment, i run the 3G dongle with basic windows drivers and no software that would allow the computer to recieve SMS messages, nor do i put the sim in my phone. Whenever i run out of credit i go out and by a new sim.

 

[Vapur9]

Not only should the crammers be punished, but so should the carriers for rejecting arguments that those charges were fraudulent in order to reign in higher profits.

 

[stopcramming]

If you have information or are a witness to cramming, especially for e-fax services for $49.95 per month, email us at cramminglawsuit@gmail.com. A group of law firms is prosecuting a case against companies engaged in cramming. If you have had this happen to you or have information about this issue, please email us now.

 

[Personne]

The Free-market argument is so hysterically funny that I nearly choked myself laughing. You cannot differenciate between a legit billing and a fraud ? Vaseline much ?

I am truly ashamed of Canada-based call centers targeting old folks and gullible people into sending money to receive some silly "prize" but at least this M.O. does not require your own local service provider to become a willfully-blind accomplice in the scheme.

Where is the Class Action ambulance chaser when you need one ?

Edit : And just when you didn't expect them, they show up...

 

[Garst]

If phone companies want to let you use your phone line just like a credit card, then phone companies need to be held to the same regulations as other creditors. Cellular companies will question charges at least a little if there's a chance that they'll be the one forced to fight the charge for you. This no questions ask about charges and turning charges over immediately to debt collectors if you refuse to pay fraudulent charges is going to stop, and it's going to stop now!

 

[Sneaky]

I had something very similar happen not long ago, but rather than a service it was with text messages.

I had just bought a 3G dongle for my laptop which included a pre-pay sim. The next day i put $50 credit on so as to last me the year. A short time later, i check my balance and it's been reduced to $5, in the space of about 3 hours a company had sent me 60 sms messages, with zero content and which i got charged for.

This is so wrong. In principle I don't believe you should ever be asked to pay for anything you haven't agreed to, which means you should never have to pay to recieve sms messages, phone calls, etc, unless you have signed up to a premium rate service

Here in the UK that is the case, certainly in general, and I believe by law. In addition direct marketing companies cannot send you txt messages without you opting in, and they MUST stop if you reply "STOP" to a txt message.

It's quite good having effective regulators with real power.

 

[Miqunator]

I haven't directly experienced something like this but I tried to sort out a younger relatives hassle. The relative had at some point ordered one ringtone from a random site but at the same time got signed up for recurring "service messages". The provider could do nothing about it (or so they said), problem was I didn't see the bill until over a month after it happened and the time to complain had run out ages ago. Guess we could have brought it further but the hassle of doing it simply wasnt worth it.

Funny thing about it is that the provider apparently has an ability to block these types of scam messages but choose not to do it by default, the subscriber has to explicitly ask for it.

What my relative learned the hard way was that paranoia is one of the best traits to have when dealing with anything related to telecom (and internet). Trust no-one 'cause they are all after your stuff!

 

[potato44819]

Keep in mind that when you call to dispute cramming charges, request that ALL of the charges be sent back to the carrier. Don't let them give you the 90 day bullshit excuse; State: "I want a mechanical adjustment applied to all of the charges from this 3rd party. Send these charges back to the 3rd party and if they still feel it is valid, have them send me the bill separately."

If the CSR/Manager refuses, escalate the call as much as possible on the phone, and if that fails, then ask for the contact information for the customer advocacy group/executive offices to send a written complaint. Let them know in the letter you will be sending a copy to your PUC as well.

-Former level 3 telecom manager who got over 9000 people out of 3rd party hell.

 

[potato44819]

If phone companies want to let you use your phone line just like a credit card, then phone companies need to be held to the same regulations as other creditors. Cellular companies will question charges at least a little if there's a chance that they'll be the one forced to fight the charge for you. This no questions ask about charges and turning charges over immediately to debt collectors if you refuse to pay fraudulent charges is going to stop, and it's going to stop now!

The phone company cannot halt your phone service due to charges from third party carriers.
The phone company cannot halt your phone service due to charges from third party carriers.
The phone company cannot halt your phone service due to charges from third party carriers.

I tell you three times!

You can let them build up as long as you want, and never pay them, have a -30,000 note on your bill and still have phone service.

Simply notify the telco that:
1. You are not paying those charges with your monthly payments
and
2. Mechanically adjust the bills back to the third party (use their lingo, it usually gets them to agree with you.)

 

[JamHandy]

Our Verizon account got crammed last month by an ILD Telecom Services who when called claimed a third party called Members Edge had submitted that we signed up for their $14.95 per month service. My sharp eyed wife caught the additional charge and I called ILD that the charges were bohus and they said no problem. Then we called Verizon and got them to remove the charges from our bill. Hey, so no problem...

Yesterday we check our new bill and guess what, ILD telecom Services has submitted a new monthly charge for something 1-800-321-CONTACT coincidentally also for $14.95! WTF?

So I guess this will be a monthly event with ILD.

 

[Jack_o]

"The president of GreenTreeData acknowledged that she did not use any of her own money to start the company and that, aside from signing paperwork, she had no involvement with the company, except to 'receive a check every month,'"

Too bad for her. She took the money, profited from it, signature is on the paperwork, she is the one (probably among others) that needs to be held accountable. I don't believe for one minute she is as stupid as she sounds. If she is so innocent, then she should be willing to give back what amounts to illegaly gained proceeds..

 

[TheTerribleTwist]

The LaurenTel website looks very professional. NOT.

 

[davethepak]

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.

Actually, it was productiive....you responded to it, and I am responding to you.

This is an excellent example of where laissez-faire does not work, and we actually need regulation, as proven by the fact that the telcos are making money on this, and don't want it to stop.

Also, the solution of "if you don't like it, move" is not a good model.
* you have to catch it, and pay
* you then have to change service?
* you have to then pay to change service?

All of this to deal with a crime? (fradulant theft?). The phone companies are accomplices at worst and criminally indifferent at best.

This solution is clearly not.

 

[dark-star]

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 ?

If you do, there are some great VOIP options. I've been using an Ooma Hub for about a year, have been very happy with the service. No phone bill, no possibility of cramming, and kept my old landline number that I'd had forever.

 

[stopher2475]

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!

I don't buy it. The telcos have so many lawmakers in their pocket if they wanted to get rid of this they would. Look how they get municipal broadband competition legislated away.
The reason they haven't gotten rid if this is because they're getting their cut and if anyone complains they just point to the crammer as the culprit.

 

[Chuckstar]

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.

That's the traditional way that anti-regulationists claim that the free market resolves issues. A quick look around the landscape, however, shows it often does not work that way. The problem is that there are many different ways companies can compete. Only if enough decide "we're going to compete on eithics" will the free market fix this problem. If they all ticitly agree that it is too lucrative to give up the scams, then the market will not force them to give up the scams. If every company is doing it, then the free market has failed. Even if just a majority of companies are doing it, then the free market has failed.

If a guy on the street corner was scamming people out of $20 each (e.g. three-card monty), the cops would drag him in as a fraudster. Until these big companies start getting treated the same way, they will continue to scam people.

EDIT: Most instructively, this has been going on for so long that if the free market were going to fix it, it would be fixed.

 

[Netguru]

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.

We need, oh ya I am going to say it, "regulation"! Free market only allows these companies to cheat, steal and lie! And oh ya, let's allow ATT to buy TMob!, its a win win. Win for ATT and a win for the share holders of Tmob.

 

[Netguru]

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.

In my last job I was "the phone guy". the company's phone bill came on two CD's every month. Please tell me how to find those charges?

 

[LazyCubicleMonkey]

Like someone else already said, the free market does NOT mean that fraud can run wild and free. And cramming is fraud!

 

[SteveinOhio]

"Free market" has never meant a market with no regulation whatsoever, and certainly not a market that allows a seller to take money from a buyer without consent. A marketplace is most efficient when all of the actors have all of the available information and can make intelligent, purposeful decisions to buy, sell, or walk away. Virtually any law that increases disclosure or eliminates fraud will lead to increases in the freedom of a market. People who have been "Crammed" are being robbed just the same as someone who falls victim to a pickpocket.

The idea that a law banning this practice is at odds with "free market capitalism" is laughable. There is no redeeming value to fraud.

 

[bb-15]

"Free market" has never meant a market with no regulation whatsoever...

Agreed. A market with no regulation/laws in our modern technology world is some pure Libertarian/anarchist fantasy. It does not work. For instance I don't want to see a return of the business of widespread slavery, serfdom or company controlled towns where families are permanently in debt enforced by company police.

As for cramming, this is an issue which can be pretty easily handled by the typical Ars user who are usually tech experts. My wife and I have dealt with cramming a couple of times with the phone company/crammer but again we are tech savy.

The target population of the crammer scam are the uninformed, especially the elderly population who mostly are ignorant of how modern technology works and can be convinced that these extra phone charges are the "right" thing to do.

 

[Lycantheria]

I work in the Billing Disputes department of a large landline phone company. The vast majority of disputes that I process are related to third party charges. I'm just a peon, so I can't speak for the overall philosophy behind allowing third parties to bill on our bills, but I can say that once we are notified that a customer doesn't want the third party charges, we do place a no-charge block on the account, and refund the past 90 days worth of charges, with no discussion. There shouldn't be any back-and-forth between a customer and the phone company, the charges should just be removed.
On the other hand, I have run into many people who actually DO want 3rd parties to be able to charge on their phone bills, especially WOW players, since that is a pretty popular payment option for that service. The problem we run into in these situations is that our block is a blanket 3rd party block and will block both their fraudulent and legitimate charges.

 

[dlux]

My wife and I have dealt with cramming a couple of times with the phone company/crammer but again we are tech savy.

Who cares how 'tech savvy' someone might be if this happens multiple times, as you just stated? How many times do you have to go through this pointless exercise before either admitting defeat in one form or another (including switching providers) or calling for some outside entity to solve the problem?

I think 'legal savvy' would be more important in this case (not that being tech savvy hurts in any way).

 

[jtodd929@hotmail.com]

The core of the problem is that telecoms are allowed to share customer phone bills with third-parties. Phone Bills should be treated as confidential/personal information. Sharing a customer's phone bill with a third-party without customer consent should be illegal.

I thing it's outrageous how all these telecoms can disclose all my personal information without my consent and make all this money from it. I routinely opt-out of as much information sharing as I can when I sign up for a service. Yet I still receive these "cramming" calls practically every week.

 

[Discoceris]

The problem with just "leaving a carrier for another" option is that it's not an option for some people. Depending on where they live and who operates in those areas. You'd be surprise at how little options people living in small cities have. And sometimes a supposed competitor to a carrier turns out to be either an affiliate or subsidiary of the parent company.

Free market in this sense will only work if you have a lot of competitors. Once the pool starts to dry up and you're left with a couple of large options, you don't really have any choices.

 

[Ed209]

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.

Well, all telephone (landline and wireless) companies are *allowed* to accept 3rd party billing. As far as I know, it's an industry-wide problem. All major carriers accept third-party billing. Cricket may not be so suspect because they are a mostly pre-pay service (I think?). The other issue is that the telephone company is *not responsible* for the 3rd party charge. If you call the telephone company to complain or to have a 3rd party charge removed, they will tell you to contact the 3rd party, which can prove to be very difficult if not impossible. And, as stated in Nate's article, the carries aren't overly anxious stop 3rd party billing due to the amount of revenue they generate.

It's an industry-wide issue, and it's pretty bad. I don't see the industry voluntarily stepping in here to regulate the issue, at least with any effectiveness -- it's already been tried before, back in 2000.

[Edit]

... I can say that once we are notified that a customer doesn't want the third party charges, we do place a no-charge block on the account, and refund the past 90 days worth of charges, with no discussion.

Just saw that -- if that's true, that's great. When I called my telephone company to have a 3rd party charge stopped/removed, they would just tell me to contact the 3rd party in question and wouldn't have anything to do with it. That was a few years ago, though.

 

[dlux]

Free market in this sense will only work if you have a lot of competitors. Once the pool starts to dry up and you're left with a couple of large options, you don't really have any choices.

Welcome to the 21st Century world of telecommunications and Internet access. Unfortunately things will only get worse, not better, as time goes on.

 

[Wida]

You gotta love the US, where the consumer gets raped over and over again. Once you get the lawyers and politicians involved you know that it will take 20 years to figure out something that a five year old has enough common sense to understand.

 

[woodelf]

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

Alternative diagnosis o the same situation:
Problem: Insufficient gov't regulation.
Solution: More gov't regulation.

I'm not saying my diagnosis of the problem is more correct. Just that, unless you're at one if the extremes (complete absence of regulation or complete absence of free will), it's not always clear whether the problem is best solved by more or less regulation.

 

[jandrese]

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'.

You missed the point, I said all cramming charges. If Media Telestarfraudcom is some cramming front, and they're designated as so, then the phone company needs to reverse every charge made by that company on every person in its system. All 500 people get their money back automatically, not just the one that complained.

Obviously this is not going to be popular with the phone companies, and will probably require some sort of governmental oversight board to handle disputes, but it would almost certainly get the phone companies to sit up and take notice.