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FTC Puts $1.9M Kink in Phone Bill Crammer's Wallet

ScuttleMonkey posted more than 6 years ago | from the slap-on-the-wrist dept.

The Courts 72

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."

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No Verison? (1)

calebt3 (1098475) | more than 6 years ago | (#22753492)

That sucks. I can't can't comprehend where charges are coming from.

That's not the only thing. (-1, Troll)

Anonymous Coward | more than 6 years ago | (#22753510)

Check out his blog. http://bill.crammer.on.nimp.org/blog [nimp.org] , it's pretty weird.

Re:That's not the only thing. (2, Informative)

Anonymous Coward | more than 6 years ago | (#22753666)

DO NOT CLICK!

I just clicked. Now I have to go wash out my eyeballs with bleach. :(

Re:That's not the only thing. (-1, Troll)

Anonymous Coward | more than 6 years ago | (#22753738)

Indeed! That linked website has some interesting mirrored info. For example:

The FTC defines cramming as unexplained charges on phone bills for services you never ordered, authorized, received, or used. Sometimes a one-time charge for entertainment services will be crammed onto your phone bill. Other times, monthly recurring charges are crammed onto your phone bill. Cramming of monthly recurring charges falls into two general categories: club memberships, such as psychic clubs, personal clubs, or travel clubs; and telecommunications products or service programs, such as voice mail, paging, and calling cards.

I don't know WTF is with the AC troll who posted the Do Not clikc warning. Prolly a telco plant.

Re:That's not the only thing. (2, Informative)

poetmatt (793785) | more than 6 years ago | (#22753870)

That website is worse than goatse. What the heck is wrong with trolls countering trolls with these nasty anon posts lately?

Eh? (2)

JK_the_Slacker (1175625) | more than 6 years ago | (#22753520)

I tried to understand the article title... but my head asplode.

Re:Eh? (-1, Offtopic)

Anonymous Coward | more than 6 years ago | (#22753592)

I've not been here very long, but 4chan is changing for the worse. It is no longer about Anonymous and our fight for justice throughout the world. In the past couple of weeks, this site has been deluged with child pornography (and yes it is still pornography even if they are still clothed), gore, racism, bestiality, glorification of school shooters, and the making levity of suicide.

Anonymous must move to greener pastures, in order to disassociate itself from such degenerate behaviour. The home of Anonymous shall no longer be 4chan, but shall instead be this new site called:
7chan.org

Re:Eh? (0)

Anonymous Coward | more than 6 years ago | (#22755824)

The title is so confusing that unless you click the RSS link and read the summary, you won't get it. For a sec, I thought there was someone named Bill Crammer (Jim Cramer's cousin? :p ). The summary sorta explained it:

FTC puts a dent in someone's wallet.
- How much? $1.9M.
- Whose wallet? A crammer, someone who crams false charges.
- What sort of crammer? A phone bill one.

The editor really needs to do his job and edits crazy titles.

What about Telcos? (2, Interesting)

heteromonomer (698504) | more than 6 years ago | (#22753576)

So why aren't the Telcos themselves not being punished? Surely the billing companies are not in this alone.

Re:What about Telcos? (2, Interesting)

esocid (946821) | more than 6 years ago | (#22753616)

I would think that while they may not have been actively ripping off their customers, they probably were somewhat aware of what was going on. I mean people had to have called their provider and complained before getting transferred to these billing companies. And even if they weren't aware, did they get a cut of the loot or was the billing company pocketing it all?

Re:What about Telcos? (3, Informative)

the_rev_matt (239420) | more than 6 years ago | (#22753982)

I just called to get one of these scam voicemail services removed from my account (interesting: if you called the number the voicemail was supposedly active for, it would ring 15 times then go to fax tone). The rep from the VM company indicated that pretty much anyone can sign up pretty much anyone else for this voicemail service on some web page somewhere and the company doesn't care because they can bill it.

The rep from ATT was pretty bothered by my explanation of what happened and opined that there was no way it should be legal and that it was bad business for ATT to even bill for this crap. Then he spent 20 minutes going over every service we have on our account and giving me the lowest price available for the ones we wanted to keep and eliminating the rest. Cut my bill by about 30%.

Re:What about Telcos? (0)

Anonymous Coward | more than 6 years ago | (#22754264)

So why aren't the Telcos themselves not being punished?

Actually, the telcos themselves *are* not being punished. Feel better now?

Re:What about Telcos? (4, Funny)

tompaulco (629533) | more than 6 years ago | (#22754796)

The telcos willingly pass through the charges to you because they receive about 1/3 of the revenue. The telcos need to be punished as well. They basically want to act like a credit card which always gives the benefit of the doubt to the company that put the charge on the bill. I say, if they want to be like a credit card, then they need to abide by the regulations of the credit industry. In the credit industry, if you question a charge, they immediately place it into a suspect status, and you don't have to pay it until it is resolved. With the telcos, if you call and question it, they give you the runaround, and even if they do agree to investigate, you still have to pay the charge until they make their decision on the charge, and if you don't then they will cancel your phone service and report you to the credit bureaus and collection agencies.

Decentralize (1)

esocid (946821) | more than 6 years ago | (#22753578)

The three companies -- BSG Clearing Solutions North America, ACI Billing Services, and Billing Concepts -- control more than 85% of the billing aggregation market, in which aggregators contract with local telephone companies to bill on behalf of third parties, the FTC said.
How weird. Companies in a potential monopoly abuse their position? The FTC needs to decentralize this shite since corrupt individuals can't seem to keep their hands out of people's wallets. Luckily I've not been involved in fraud like this, only the random credit fraud.

Re:Decentralize (2, Interesting)

cdrudge (68377) | more than 6 years ago | (#22753686)

By definition, how can 3 completely separate companies be a monopoly. I think oligopoly would be a better term.

Re:Decentralize (1)

esocid (946821) | more than 6 years ago | (#22753824)

I was trying to define them collectively but you're right, oligopoly is better.

Re:Decentralize (1)

Xtifr (1323) | more than 6 years ago | (#22755694)

From Bouvier's Law Dictionary, Revised 6th Ed (1856) [bouvier]:

    MONOPOLY, commercial law. This word has various significations. 1. It is the
    abuse of free commerce by which one or more individuals have procured the
    advantage of selling alone all of a particular kind of merchandise, to the
    detriment of the public.
              2.-2. All combinations among merchants to raise the price of
    merchandise to the injury of the public, is also said to be a monopoly.

(Emphasis mine.) Slightly out of date, but I don't think the meanings of the words have changed that much.

The underlying idea here, I think, is that you can have more than one member of a monopoly and still properly call it a monopoly, as long as the members work together, effectively forming a single group. A group that collaborates to form and exploit a collective monopoly is referred to as a "trust", hence the Sherman Anti-Trust laws,

Whether this particular group of three companies collaborated sufficiently to qualify as a trust, I don't know, but if they did, then the term "monopoly" would be completely appropriate. And even if not, I suspect it was close enough that an informal description of them as a (collective) monopoly would not be entirely inappropriate. Oligopoly and monopoly are not necessarily exclusive categories.

I once again question where the money goes... (1)

Farakin (1101889) | more than 6 years ago | (#22753670)

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?

My Bill is always wrong (5, Informative)

FredFredrickson (1177871) | more than 6 years ago | (#22753722)

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.

Re:My Bill is always wrong (0)

Anonymous Coward | more than 6 years ago | (#22754354)

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.


Eh, not really - because the dollar you get "credited" this month is only going to make your bill 'correct' next month (since they're going to bill you an extra dollar again next month). Thus, you essentially have to go through this entire hassle every other month at best, just to remain "even" with them.

Re:My Bill is always wrong (4, Informative)

xstonedogx (814876) | more than 6 years ago | (#22754592)

Comcast is doing exactly this with me now, only the problem is $17.99.

I picked up a new box at the store (to get HD content). They didn't activate the box properly at the store. (I don't believe it was an accident, because the same exact thing happened to my dad not a month before it happened to me - and we are in different areas.) I contacted tech support and they couldn't activate it from there either. I don't think they even tried because the box literally did nothing when they said they tried. They told me they would have to send out a tech, but did not mention anything about having to pay. The tech was here for about two minutes, did exactly what I did over the phone with tech support they were miraculously able to activate the box.

I contacted them and told them to pound sand. They said they would refund the money. They didn't refund me the next month. My next bill should appear any day now. Since I received the same exact canned response, I don't expect to see a refund this month either. Won't they be surprised when I issue a charge back with my credit card company, complain to the FTC and others, and become a former subscriber.

The part that really pisses me off is that I was already paying them more than most customers probably pay (I'm a stay-at-home dad until Fall, so I can justify it pretty easily), and by adding this box I was actually increasing my bill.

Re:My Bill is always wrong (1)

plague3106 (71849) | more than 6 years ago | (#22754828)

Well, your mistake was getting Comcast for service.

Re:My Bill is always wrong (1)

Mr2001 (90979) | more than 6 years ago | (#22757150)

His first mistake was getting an HDTV. $17.99 a month is nothing compared to the premium he paid for getting a DRM-infested digital TV instead of a cheap analog one.

Re:My Bill is always wrong (1)

gad_zuki! (70830) | more than 6 years ago | (#22754806)

So when are they going to get the "Hey kids, text this number now!!" (small text flashes on the screen about subscribing to a service and being billed 20 dollars a month) Phone billing and fraud go hand in hand.

Re:My Bill is always wrong (1)

Mean Variance (913229) | more than 6 years ago | (#22755070)

Yet those goofballs will send me a check for 6 cents. I hate these guys yet I end up being a customer (TCI Cable -> AT&T Broadband, Pacific Bell -> SBC -> AT&T).

Check [imagebay.com]

Re:My Bill is always wrong (4, Interesting)

jwiegley (520444) | more than 6 years ago | (#22755224)

My damn union just started doing this sort of deceitful, unethical crap. I'm a teacher. Teachers like myself in California are represented by the California Faculty Association (CFA). You do not have to be a member of the union, you can choose not to be. However if you choose not to be then the union still legally charges you 75% of the dues a normal member pays. Their argument is that the union negotiates and defends to the benefit of all employees and thus all employees should pay their fair share, known as an agency fee. Because California is not a right to work state you cannot refuse to pay. If you do then the union can mandate that you be fired.


I would argue that the union doesn't represent me. Every action they take punishes people in my position and is aimed at rewarding the less competent, less educated or lower paid instructors. So what does this all have to with the article?


Starting last month the union started deducting 100% of dues from non-members. These people are not given the same rights and privileges as members. Oh, buried on the second to last page of a yearly CFA report is the information that you can object to the additional 25% if you send a written letter with personal information to the CFA. It's just like the damn phone company. I know they did it just hoping that some percentage wouldn't notice, or wouldn't bother, to send such a letter in.


The thing that really bugs me is how is this even legal??? If they can just arbitrarily take an extra $10.00 from my paycheck why not, $50, $500?? How is it legal to reach into another man's salary and take something that is not legally owed to them?


Ayn Rand had it right.

Re:My Bill is always wrong (1)

FromTheAir (938543) | more than 6 years ago | (#22755486)

It's not an it is time for a revolution. Hope you all participate.

Re:My Bill is always wrong (1)

BusDrivinBilly (684983) | more than 6 years ago | (#22756336)

jwiegley, Under the U.S. Supreme Court case "Communications Workers v. Beck, 487 U.S. 735 (1988)" unions cannot use non-union dues to pay for political activities. They are technically restricted to collective bargaining, contract administration, and grievance adjustments (i.e., related directly to the contract of employment and its administration and terms and conditions). However, many unions take 100% of the fees and do as you described, required employees to opt-out if they object. Last year, the U.S. Supreme Court heard a case arising out of the State of Washington, "Davenport v. Wash. Educ. Ass'n, 127 S. Ct. 2372 (2007)" where the State passed a law prohibiting union use of non-member dues for political purposes without affirmative permission. The union had a similar set-up to the one you describe, in that it collected 100% fees from non-members, and gave the the option, twice per year, to opt-out. The Supreme Court upheld the Washington law which required permission beforehand to use dues for political purposes. Even though no such affirmative duty to get pre-permission exists under California law (to my knowledge), there may be a legal argument based on the Supreme Court precedent which would allow for a class-action challenging the collection methods you described. You may want to search around to see if any public interest groups or class action firms have taken notice of the fees collections that you described. (IAAL - But I don't practice in this area and of course, nothing herein is intended to be legal advice or acted upon as such)

Re:My Bill is always wrong (1)

sartalon (887122) | more than 6 years ago | (#22757734)



"Teachers like myself in California are represented by the California Faculty Association (CFA). You do not have to be a member of the union, you can choose not to be. However if you choose not to be then the union still legally charges you 75% of the dues a normal member pays."

I seem to remember Gov Schwarzeneggar submitting a proposition that would require people to have to "opt in" in order for the Union to withdraw from teacher's pay checks. I also remember the storm of anti-Arnold ads that quickly ensued saying the Governator was taking money away from Education. In California, the Governor can't use state funds to campaign for his propositions, so guess what, everyone voted against it. Union's serve a purpose, at certain points they are necessary and vital, but they can quickly become the beast that cannot be fed. Ask anyone in Michigan and wonder why the automakers left. Its the nature of power bases to consolidate and increase their power.

Re:My Bill is always wrong (0)

Anonymous Coward | more than 6 years ago | (#22772386)

Union's serve a purpose

"Unions".

Re:My Bill is always wrong (1)

xenocide2 (231786) | more than 6 years ago | (#22757780)

Because California is not a right to work state ...
This information is contrary what I've read about Right to Work and California.

Re:My Bill is always wrong (1)

FromTheAir (938543) | more than 6 years ago | (#22755464)

These mistakes just don't happen. I have worked on enough billing systems to understand them. Data doesn't appear randomly by accident it always has a source.

The time has come where companies need to pay for the labor spent by consumers to get problems resolved I am thinking it should be about 1.00 per minute.

Great. (2, Insightful)

street struttin' (1249972) | more than 6 years ago | (#22753726)

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.

Re:Great. (1)

The End Of Days (1243248) | more than 6 years ago | (#22753828)

I'm not familiar with the 'scam' aspect. What are they doing wrong?

Obviously their 'service' isn't worth it, but it seemed straightforward to my cursory review.

Re:Great. (1)

vux984 (928602) | more than 6 years ago | (#22754624)

I'm not familiar with the 'scam' aspect. What are they doing wrong?

They are 'enrolling' people in subscription programs automatically billed to their cell phone bill, often without anything approaching consent of the person paying the bill. These services are often extremely difficult to cancel. And the charges you accumulate before managing to cancel are often extremely difficult to have reversed. And lets not even talk about people on pre-paid.

If someone gets a hold of your number and whores it around you'll end up with $1000/month text emssaging charges in short order.

You'll probably have to have text messaging disabled on your phone entirely or change your phone number to get out of the services. (which just means that the next person your number is assigned to gets nailed.) And good luck getting your phone company to forgive/refund the charges.

These companies -say- they follow best practices and have double opt in enrollment, and multiple ways to cancel, and that they fully disclose their pricing and terms. But in reality they will often 'mistakenly' enroll you over the internet or from your phone with no confirmation at all, and it can be done by anyone.

They also use misleading and deceptive advertising to get you to enroll... such as large TV adds that say "TEXT JOKE to xxxxx for a joke of the day" shown during kids shows... and only disclose that this is enrolling you in a recurring service that will charge you $1.50 per message, per day in the scrolling fine print. Not that the kids doing this will read it, or care. They don't pay the bill, you do.

Or they'll set it up so have you send a text to register a vote in some event, or as a contact number in some contest, and again only disclose in the fine print that this will also enroll you in a premium subscription service; and other underhanded techniques.

Meanwhile they are often run offshore, with no publicly visible method to contact customer service to dispute charges or report that you are being billed in error.

Considering the hoops I have to jump through (account number, confirm identity, just to change my voice mail plan), or when I added overseas dialing they ran a credit check to determine if I'd have to place a security deposit -- its absurd that if a random 9 year old gets my phone for a minute he can rack up $500 in recurring monthly charges via 'premium' text services.

Re:Great. (1)

mortonda (5175) | more than 6 years ago | (#22755238)

such as large TV adds that say "TEXT JOKE to xxxxx for a joke of the day" shown during kids shows... and only disclose that this is enrolling you in a recurring service that will charge you $1.50 per message, per day in the scrolling fine print. Not that the kids doing this will read it, or care. They don't pay the bill, you do.
Well, the problem here is parents giving their children access to something that is connected to finances with no control over it. Technically, I'd call this a security hole. Bugtraq anyone?

When and if my kids get cell phones, it will be set up so that those phones are incapable generating new charges. (Cell phone providers, are you listening? This is a make or break deal)

Personally, I will not allow text messaging of any kind on my bill at all, until they stop charging extra for it - it's a sham anyways, as it costs them next to nothing.

Re:Great. (1)

vux984 (928602) | more than 6 years ago | (#22755492)

Well, the problem here is parents giving their children access to something that is connected to finances with no control over it. Technically, I'd call this a security hole. Bugtraq anyone?

First, how are we supposed to realistically avoid giving our kids access to our telephones? Between voip and cellular I have no need of a landline.

Second, kids don't need access to the phones to enroll. They can do it on the library computer at school. Nor does it have to be your kids, or even someone you know. If someone somewhere puts my phone number into one of those online forms, even by -mistake- it will likely enroll me.

Personally, I will not allow text messaging of any kind on my bill at all, until they stop charging extra for it - it's a sham anyways, as it costs them next to nothing.

Many cell phone packages include 'more text messages' than I need. So while it may cost if I use more than a couple hundred a month, I don't and they are effectively free. And the incremental cost of a plan with them vs one without is 'next to nothing' if you do want features like caller id and voice mail.

But that doesn't of course deal with 'premium text messaging' and it doesn't help that younger people are generally put on 'unlimited texting plans' so they can chat freely with their friends etc. So they're conditioned that 'texting is essentially free'

Who is William Crammer? (0)

Anonymous Coward | more than 6 years ago | (#22753750)

Who is William Crammer and why does the FTC have it in for him?

Disproportion..... (5, Insightful)

IHC Navistar (967161) | more than 6 years ago | (#22753908)

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.

RTFA (5, Informative)

bkaul01 (619795) | more than 6 years ago | (#22754066)

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?

Re:RTFA (3, Insightful)

OnlineAlias (828288) | more than 6 years ago | (#22754702)


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?

Re:RTFA (1)

MLease (652529) | more than 6 years ago | (#22755360)

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?

Yes.

-Mike

Re:RTFA (1)

starakurva (453545) | more than 6 years ago | (#22760956)

Yup. >sigh

Re:RTFA (0)

Anonymous Coward | more than 6 years ago | (#22754878)

But if I can steal $35M and on the off chance that I get caught, I only lose $37M, then that seems like a pretty good risk to me.

Re:RTFA (1)

mrdarreng (1120603) | more than 6 years ago | (#22755068)

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?
They're confiscating the money? Does this mean I get my two dollars back? I want my two dollars!

Re:RTFA (1)

whit3 (318913) | more than 6 years ago | (#22756276)

The bogus charges were handled through an intermediary. Most of that
$30 million went to the scammers, but a fee was paid to the intermediary
(which is the same organization that would handle complaints.).

The $1.9M is a fine to the billing middleman, who should have
known there was fraud afoot and will, in future, have to be
more careful. Since the middleman only profited by a small fee
on the fraudulent transactions, the fine is a small fraction of
the amount of the fraud.

I should say, the presumed amount of the fraud; it's hard to know
what part of a phone bill is real and what is bogus. The court
can only deal with the parts that are clearly fraud. For this reason,
bill-per-service is a VERY bad way to arrange telecom services.
There have been cases of iPhone bills incurring international
roaming charges at an alarming rate while doing innocent
'check for e-mail' background tasks.

Re:RTFA (1)

0101000001001010 (466440) | more than 6 years ago | (#22756334)

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?

Because the probability of being caught is less than 1.

Re:RTFA (2, Insightful)

TheLink (130905) | more than 6 years ago | (#22757722)

"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.

Re:RTFA (1)

Dan541 (1032000) | more than 6 years ago | (#22758606)

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?
These days you'd think scammers would have the sense to use Swiss bank accounts.

~Dan

Re:RTFA (0)

Anonymous Coward | more than 6 years ago | (#22759442)

And they got to sit there and invest it for months.

Re:Disproportion..... (0)

Anonymous Coward | more than 6 years ago | (#22757766)

They should get the RIAA's lawyers...

Fine the company 500,000% of the fraud revenue...

Re:Disproportion..... (1)

Dan541 (1032000) | more than 6 years ago | (#22758590)

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?
In western society we call it justice.

~Dan

I hate these FTC settlements (1)

sirwired (27582) | more than 6 years ago | (#22753924)

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

Re:I hate these FTC settlements (1)

Fulcrum of Evil (560260) | more than 6 years ago | (#22754600)

I wonder if you can go to prison for unpaid fines of that magnitude? Anyway, the big cheese has a lifetime ban, he'll need a new scam.

Banks and Credit Card Companies please? (2, Insightful)

flyingfsck (986395) | more than 6 years ago | (#22753996)

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...

Re:Banks and Credit Card Companies please? (1)

Duhavid (677874) | more than 6 years ago | (#22754366)

And this is part of how you know who has the power in this "relationship".

Send them a revised set of terms, see how far that flies.

What about the victims? (1)

lantastik (877247) | more than 6 years ago | (#22754216)

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?

Re:What about the victims? (1)

GeneralPayne (1252500) | more than 6 years ago | (#22754586)

Ok, we're talking about a government organization that is investigating and litigating against another organization with deep pockets. The government is going to post inflated fees for the investigation and utilize the bulk of the funds gained to pay for their fees then they'll tack on more fees for other extraneous costs that derived from the investigation followed up with fees for taking the investigating parties to breakfast, lunch and dinner. So in answer to your questions, screw the customer, Uncle Sam found it so he's keeping it.

Scams (0)

Anonymous Coward | more than 6 years ago | (#22754512)

Speaking of overcharging scams. How about phone companies charging for a minute when I only use 20 seconds. That's a scam that adds up to billions I'm sure.

Fine the fscking telcos for their complicity (1)

swb (14022) | more than 6 years ago | (#22754682)

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.

Hell of a deal! (1)

TheSpoom (715771) | more than 6 years ago | (#22754746)

$30 million in bogus charges
-
$1.9 million in fines
=
$28.1 million of free stolen money!

My Own Experience (3, Informative)

CyberGarp (242942) | more than 6 years ago | (#22754916)

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.

Re:My Own Experience (0)

Anonymous Coward | more than 6 years ago | (#22755326)

You live in the wrong state. This happened to me (different companies involved) when I lived in Iowa. Their laws (and AG) make it very easy to contest slamming, you just have to fill out a web form. The burden is placed on the phone co. to prove that the transfer was made by an authorized party. My bill was fixed very quickly.

There is a list here: http://www.fcc.gov/slamming/states.html [fcc.gov] which provides links to several states' complaint forms. You can also file a complaint directly with the FCC here [fcc.gov] . YMMV based on what state you're dealing with.

Sprint (1)

SandwhichMaster (1044184) | more than 6 years ago | (#22755418)

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.

Doesn't everyone realize we need a revolution? (1)

FromTheAir (938543) | more than 6 years ago | (#22755354)

The citizen consumer needs to organize ourselves as consumers to stand up against the few that benefit to the detriment of the many?

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.

Telcos do it to their own, too (1)

chaosdot (1232158) | more than 6 years ago | (#22756396)

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.

Re:Telcos do it to their own, too (1)

chaosdot (1232158) | more than 6 years ago | (#22756438)

Forgot one other fun aspect of this; if you were a new customer, you just might get the old phone number's dialup account transferred to your new phone's bill, because the dialup had to be canceled separately from the phone line.

It was a lot like these Bill Crammers, only with the telco's own logo and 'approval'.

business "mistakes" are worse than fraud (1)

bzipitidoo (647217) | more than 6 years ago | (#22757312)

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 with business "mistakes"-- overcharges, extra charges, delays, missing rebates and refunds, discounts that weren't applied, hidden fees, and the like-- than I spend dealing with trouble caused by identity thieves. Businesses never let up. It's always a dollar here, 3 dollars there. I'm dumping BoA soon, I've had enough of their crap. Replacing AT&T is more of a problem. Bank of America is protecting its customers from fraud. Who's protecting us from BoA?

and 30M - 1.9M is...? (1)

jayloden (806185) | more than 6 years ago | (#22757416)

"...a $1.9 million fine in response to the more than $30 million in bogus charges added to consumer's bills"


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.

</disgusted>

So what is one supposed to do? (0)

Anonymous Coward | more than 6 years ago | (#22757820)

Drop out of society. This is the crap that makes me want to live an Amish lifestyle.
It happens all the time. The only thing other than going Amish is fire those representatives that take any funding from companies that play this kind of game... which happens to be just about all of them.

AT&T + Billing Concepts = Fascism (0)

Anonymous Coward | more than 6 years ago | (#22759486)

They got our ass for fake Voice Mail services for more than nine fucking months.
I forget how much it was in total now but I believe it was more than a hundred bucks.
They stole our personal information to leverage the ability to bill us, when we called they asked about some family member (by name)

At the time I felt like tracking their ass down and putting a bullet in their heads one by one.

These motherfuckers don't deserve to live. PERIOD.

Before this FTC action if you went to the URL
http://www.billingconcepts.com/contact-us.php# [billingconcepts.com] (Or whatever their fucking Contact page was)
You had to disclose information to even contact their ass. (not an option)

The only resolution we had was to Stop all third party billing (From the AT&T end), which now makes our fucking long distance expensive as fuck.

The other thing is this website should be updated to TRUTHFULLY tell the shitty fucking history of this company.
http://www.answers.com/topic/billing-concepts-inc?cat=biz-fin [answers.com]

1.9 Million ain't enough, they should be in JAIL for hell of fucking felonies. And the pain and suffering they caused on people by stealing their fucking money (even if it was just a loan, they can make money with that money!!)
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