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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."
That sucks. I can't can't comprehend where charges are coming from.
I tried to understand the article title... but my head asplode.
I'm waiting for a "-1 somepeoplejustshouldn'tgetmodprivileges" meta-moderation.
So why aren't the Telcos themselves not being punished? Surely the billing companies are not in this alone.
Absolute power corrupts absolutely. indymedia
DO NOT CLICK!
:(
I just clicked. Now I have to go wash out my eyeballs with bleach.
Great he got fined.....but what about giving that money to the people that were screwed over? This once again makes me wonder. The BSA, RIAA, MPAA they all keep the money they get and never pass it on.... Can you hide money by calling it a fine, and not restitution?
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.
Belief? Hope? Preference?The Existential Vortex
Now if only they'd do something about the "Joke of the Day" scam that's been going around. jokemobi.com and any similar group should be fined out the asses for that crap.
Telephony Fraudster Gets Lifetime Ban from Telecom Business March 05
That website is worse than goatse. What the heck is wrong with trolls countering trolls with these nasty anon posts lately?
How can the phone companies, or any company, be fined so little when the actual theft was far more? I mean, a $1.9 million dollar fine for $30 million worth of fraudulent charges?
1: Charge $30 million in fraudulent charges.
2: Generate gross fraud revenue of $30 million.
3: Customers report you.
4: FTC fines you $1.9 million.
5: KEEP PROFIT of $28.1 million.
6: Lather, rinse, repeat.
(Now that I think about it, this could be a buisiness model/method. I CALL PATENT!)
If a company makes more from fraud than it has to pay in fines, where is the deterrent? 28.1 million in retained fraudulent revenue won't discourage anything.
A better way:
1: Fine the company 50% of fraud revenue.
2: Force restitution of 100% of fraud revenue
If the combined amounts of the fine and fraud revenue exceed the total profits and cash reserves of the company, then allow the company to pay in installments that will allow the company to continue operating so that both the fine and restitution can be paid back, with restitution to defrauded customers taking priority over the fine. If the company keeps up fraudulent activity to the point where payments continually compound onto one another and the company cannot make all its payments because the amount exceeds it's profits and cash reserves, then the company, assets and all, is sold off to competitors or creditors, and the assets of responsible executives are used to reimburse shareholders, consumers, and creditors.
Fines need to be a *DETERRENT*, not an inconvenience.
Knowing Google's lust for data collection, the Soviet Union is still alive and well inside the psyche of Sergey Brin....
Has anybody ever noticed that the bulk of the FTC settlements pretty much state: "so-and-so is prohibited from doing things in the future that they never should have done anyway. They must pay $xM dollars, which they don't have, so they are really going to pay $5."
No criminal charges for fraud referred to DOJ, etc.
Is the lesson here: "You can scam folks as much as you want, and only have to stop once the FTC catches you and all of your profits are secreted away in offshore accounts?"
SirWired
After the phone companies, banks and CC companies are the bloody worst. How many times have you received a 'new revised terms' leaflet in the mail from your bank? Did you sign the contract and send it back? Yeah, thought not. Those tend to outnumber other forms of junk mail in my mailbox...
Excuse me, but please get off my Pennisetum Clandestinum, eh!
It seems like the govt. agencies involved are always collecting and pocketing the fines? What about the fucked over consumers? Do they get their money back?
THEY should be the ones getting fined, since they enable this highway robbery in the first place. And what do you bet that the telcos collect some kind of third-party billing fee up front from *anyone* wanting to bill to a phone number, whether the money gets collected or not?
The whole notion of billing people through the phone bills was a scam from the word go, and IMHO the FTC should ban it *all* or require that consumers setup a separate billing account for non-telco related charges unlinked to their phone account or phone service. Make the telcos eat the cost of maintaining a more elaborate billing system instead of just profiting off of it and passing off the fraud to us.
While I'm glad these thieving scumbags are paying the price for their thieving scumbaggery, why aren't they going to jail? Yes, I'm aware of all the pedantic arguments about their "real danger" to society and how they "only stole $1" from any one person, etc etc, but shouldn't this kind of what collar crime be actually *punished*? And if they do fine them, they should fine them an amount equal to whatever they stole AND the interest on it had it been invested at a rate of return equal to the S&P 500, with no credit for negative investments.
$30 million in bogus charges
-
$1.9 million in fines
=
$28.1 million of free stolen money!
It's better to vote for what you want and not get it than to vote for what you don't want and get it.
- E. Debs
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.
I used to wonder what was so holy about a silent night, now I have a child.
The citizen consumer is the most powerful group if we are not divided by the fictions that those who benefit create to divide us.
If we all simply decide not to pay the cable bill this month, they are instantly doomed because the are dependant on the cash flow.
It is that simple
We need to redesign the systems designed to create and maintain an indentured servitude.
I would suggest that the revolution start here but as we can see there are members of industry in government with slash dot accounts that try to mod down awareness creating posts or try to label one as a troll.
"an infinite player that has lost his finite mind" ~Infinite Play the Movie (it blends with reality)
Sprint tried screwing me over from day 1. Every month I had to sit on the phone dealing with BS automated voice lines, bright employees, etc. But by sticking to it, I now have 4 phones all with unlimited internet, and text messages for $90/mo. If I'd been more of an ass, I probably could have gotten more.
The point is, we shouldn't put up with this crap. Demand not only a refund, but something for your time and lost trust as well.
I worked for awhile at a dialup internet subsidiary of SBC (now AT-AT) and we had the power of issuing credits. I would listen to customer's complaints, do some checking, and issue proper refunds. Until I was taken aside and warned not to do so, that customers would have to arbitrate it further in order to get their credits (of course, never refunds)
One of the phenomenons that kept us busy were non-computer customers; many times, if you called up the main customer service line, they would add dial-up internet to the account. Didn't ask, or they'd ask and then add it anyway.
It ranged from $10-$20 per monthly bill..(prices varied, depending on where you signed up for the same service, but that's a different story)
Even if the customer didn't have a computer. Or aware they had dialup internet.
I heard all sorts of weird stories, usually related to this dialup scam, but the sad one was the lady who called up to close accounts because she was selling her apartment building; about a year back, she had messed up and disconnected the elevator telephone. When they re-activated it, the CSR added dialup internet to the elevator. It's just a handset and a switch that auto-dials some elevator emergency line.. There was about $240 in charges that she was eligible for reimbursement. She was indifferent and just wanted the thing closed and done for.
Ideal customer, methinks, as far as the telcos are concerned.
Over the past year, I've had to deal with just one case of outright fraud. Someone in another state somehow managed to charge a $500 wig to one of my BoA credit cards. I hadn't used that card in a few months. Took one phone call and one letter and perhaps an hour of my time to successfully dispute the charge and close that account.
I've had way more trouble dealing with corporate "mistakes" than with outright fraud. A company calling itself "Today's Escapes" somehow got a $20/month membership fee started on my card, and managed to slip in 2 months worth. When I called, they reversed the later charge but would not refund the earlier one, saying I had to abide by the agreement. I told them I hadn't made any agreement at all with them and that if they didn't refund the full amount I would dispute. They would not budge, so I disputed and eventually won. A magazine subscription service tried to automatically renew a magazine 2 years before the subscription was due to run out, and when I called about that I got only a recording that gave me a choice of press 1 to make no changes, or press 2 to "cancel" but which merely lowered the amount billed instead of eliminating it. Was yet another call to the credit card company to straighten that out, but this didn't require a dispute-- turned out that subscription service was a partner of BoA, and mighty BoA was able to eliminate it themselves. Um. I've also had to ride herd on AT&T. Every 3 to 6 months, AT&T finds another excuse to nickel and dime me. One time it took a complaint to the FCC to get action. The latest one was continuing to charge me for DSL service after switching me to UVerse. I know the time it'll take to straighten things out as far as I can sometimes isn't worth the money, but I do it anyway because I don't want them to get the idea I'll take that stuff lying down. As to the dozens of other fees and whatnot on the bills, it's very difficult to determine if they're correct. Wouldn't be at all surprised if they'd succeeded in sneaking other stuff past me. Meanwhile BoA is up to yet another trick. Changed the rules on an account I have so that suddenly it was below the minimum required balance and now the account is being charged a $20/month "maintenance" fee. More time to run in to a BoA branch and give them hell about that.
And that's not the worst. The worst has been medical bills incurred thanks to an auto accident. Been going to this Wound Care Clinic on a weekly basis for the same treatment each time. But somehow, they can't bill consistently. The health insurance blames the hospital as they're the ones who entered the codes, and of course the hospital claims they put in the same codes every time so it must be the health insurance got things wrong. Neither is able to explain the billing. Each of these outpatient visits lasts about 15 minutes, and consists of nothing more than measuring the wound, checking that everything is proceeding well, and changing the bandage. And the price is an absolutely outrageous nominal amount of $1300 to $1500, and that does not include the rental of a wound vac. If I understand it correctly (doubtful) it's $827 for the use of a room, $465 for the doctor, and, on the more recent bills, $74 for supplies. Once the insurance is through chewing on this, my portion of 10% has been somewhere between $47 and $153.
While I'm dealing with that stuff, I've also been after businesses that owe me money. Last year a company that had employed me as a consultant, under a contract quite favorable to them (as in 1099 not W2, and no compete for a year after I leave) with all the payment terms dictated by them, nevertheless managed to be late 5 times with my pay. I eventually got everything without great hassle and delay, but still, they could have done better. Every time they tried the excuse that 3 weeks wasn't enough time for a bill to wend its way through their system I pointed out to them that they were the ones who made those terms, not me.
I spend far more time dealing wi
Intellectual Property is a monopolistic, selfish, and defective concept. It is "tyranny over the mind of man"
I see. And $30M - $1.9M is still $28.1 MILLION DOLLARS in profit. Yeah, that fine sure showed them the error of their ways.