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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."
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.
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....
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!
Fraud is fraud. It is illegal. Put the executives in jail and shut the company down. Have we as a society gotten so accepting of the corporate culture of greed and scams that outright fraud should be punishable by simply not making as much profit?
"How is that not a deterrent?"
:).
Because the company probably wouldn't have that money anymore, it's mostly gone to the bosses.
So the company goes bust and the bosses live happily ever after.
They might even be able to do it over and over again, I'm sure there are plenty of tricks
Whereas if you jail the bosses for massive fraud it is a deterrent, since for the X years they are in jail they can't enjoy the stuff they bought or could buy. Everyone has a limited lifespan, the richer you are the less you want to spend your life in jail.