TELECOM Digest OnLine - Sorted: 'Cramming' Hits Consumers When They Least Expect It

'Cramming' Hits Consumers When They Least Expect It

Mark Huffman (
Sun, 16 Oct 2005 21:08:23 -0500

By Mark Huffman

"Cramming" used to be what you did the night before a big test. Now
the word has a more sinister meaning -- like placing unauthorized charges
on your telephone bill.

"I have a phone bill that says Voicemail Monthly fee $12.95. I want to
know what that is for and if it's not suppose to be on there, I want
it off my phone bill," said Deborah of Johnson City, Tennessee, one of
hundreds of consumers who have written to to
complain about mysterious, unauthorized charges appearing on their
telephone bills.

"I got my phone bill and ILD charged me $30.88 for some kind of
internet service that I never authorized," said Christie, of Connel,
Washington. "When I called them, I was kept on hold for over 30
minutes and have not been able to dispute these charges."

Of all the cramming complaints received at, nearly
800 are about ILD TeleServices, whose name and telephone number appear
next to the unauthorized charge on their phone bills -- and the number
of complaints is steadily rising, with 80 filed in just the last three

ILD TeleServices claims that it is merely a billing "clearinghouse,"
meaning it is collecting the money on behalf of other companies --
some legitimate and some, perhaps, not -- who deliver their services
through your local phone company.

If it all sounds confusing, you can blame the Telecommunications Act
of 1996. That piece of landmark (others might suggest a different
adjective) legislation changed the telecommunications landscape -- not
entirely for the better, at least not for consumers. Fortunately,
there are some little-publicized provisions that give consumers an
effective way to fight back.

In deregulating the local telephone markets, the new law required big
telephone companies like SBC Communications and Verizon to lease their
lines to smaller companies and to bill their customers on behalf of
companies providing such deregulated services as pay phones, collect
calls and long-distance calls from public places, like hotels,
hospitals, airports and prisons.

The purpose was to open local phone markets to competition and create
more services at less cost to the consumer. But an unintended
consequence has been an outbreak of profiteering by companies eager to
fleece captive or unsuspected consumers.

Many of the new entrants are companies that attempt to bill
unsuspecting consumers for things they never asked for -- like voice
mail -- hoping they will not look that closely at their monthly phone
bill and just pay it.

Other shameless profiteers are the hotels, hospitals, universities and
prisons that add outrageously expensive charges for the use of their
telephone equipment.

With so many layers in the billing process, the system has been open
to abuse from the start. The company placing the charge does not bill
the consumer directly. Instead, the charge is billed by a
"clearinghouse," like ILD, which in turn contracts with your local
phone company to place the charge on your bill.

The local telephone company makes nothing but a small administrative
fee and has little choice in the matter; it is required to provide
billing for these supposedly "competitive" entities.

In the case of ILD, the company says it executes hundreds of thousands
of bills each month for a wide variety of companies, and that only a
tiny fraction of the charges produce complaints. Company officials say
they work with complaining consumers to resolve disputes, and that if
one of its clients produces a large number of complaints, it is

Your Service Can't Be Terminated

Consumers writing to have expressed the concern
that their local telephone service would be cut off if they refused to
pay an unauthorized third-party charge. It can't be.

Failure to pay a disputed "miscellaneous" change on a phone bill
cannot, under the Truth In Billing Act, be grounds for termination of
service, as long as all other legitimate charges are paid. The first
step a consumer should take is to call the local telephone business
office and speak to a customer service representative.

"Verizon has a first call resolution policy for our customers who call
us with a cramming issue," Ells Edwards, a spokesman for Verizon, told "If the customer tells us that the charge is
unauthorized, Verizon will remove it from their bill, no questions

Edwards says the only exception is if the disputed charge is for a
phone call charged by another carrier. In those cases he says Verizon
requests the customer first contact the third-party carrier to dispute
the charge. If the customer fails to get satisfaction, at that point
Verizon will eliminate the charge.

Preventing Cramming In The First Place

Consumers can take action to block miscellaneous, third party charges
of any kind from appearing on their telephone bills.

"For Verizon customers, it's as simple as calling the business office
and asking a customer service representative to place a block of third
party billing on their account," Edwards said. Once a block is in
place, Edwards said the only charges appearing on a consumer's phone
bill should be for local and long distance telephone services.

How do consumers become targets of cramming scams in the first place?
The Federal Trade Commission says it can happen when someone uses your
phone to call an 800 number.

"With the right technology, companies can get your phone number when
you call them, using a process similar to caller ID. Once they have
your number, an unscrupulous company can cram charges onto your phone
bill," the FTC said in a release.

"What's more, since this technology can automatically bill the phone
number that is called from, other people using your phone can cause
charges to be billed to your phone."

The agency also says consumers should carefully read the fine print
before they fill out contest forms, especially if they ask for your
phone number. Likewise, read the fine print before you place a call in
response to a sweepstakes promotion.

Also, avoid placing calls to costly 900 numbers. The FTC says
consumers should consider a 900 number block; it stops calls from
going through to 900 number services. Blocks also are available for
international, long distance, and local toll calls.

Never accept collect calls. If you have a friend of family member who
will be traveling, get them a prepaid calling card.

It's highly unlikely Congress will revisit the Telecommunications Act
of 1996 to fix the loopholes that have caused consumers so much grief.
Instead, it appears consumers have to educate themselves about their
rights and never hesitate to exercise them against those who would
manipulate the system for fraud.

Copyright 2003-2005 ConsumerAffairs.Com Inc.

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[TELECOM Digest Editor's Note: And do you know who _first_ got this
concept started? The Western Union Telegraph Company back about 1920
or so when they -- along with AT&T -- the Bell System -- mutually
agreed to allow telegrams to be charged to telephone bills as a
'courtesy' to users of both companies. It was not uncommon in those
days -- nor anytime, really, until the late 1970's or early 1980's --
to charge telegram business to telephone accounts. I think maybe it
actually went back to Kingsbury when AT&T was in some legal trouble
about monopolies once before. AT&T and the telephone companies tried
to back out of the deal in the 1980's - 1990's when the worst of
this scandal -- companies like Pilgrim Telephone and Integratel were
first getting started. Both of these are billing aggragating companies
and could _never_ have survived had they been forced to bill and
collect on their own. Pilgrim and Integratel both promised lawsuits
against the Baby Bells if they tried to back out of what had been
their 'historic relationship' over the decades with Western Union,
and given the mood of the 1980's I am certain Bell would have lost
any court case involving refusing to bill for those bandit aggregators.

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