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."

Comments

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.

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?