Phone Customers Pay $2B Yearly In Bogus Fees 220
Hugh Pickens writes writes "CNN reports that a one-year study by the Commerce, Science and Transportation Committee shows about $2 billion a year in 'mystery fees' show up on the landline phone bills of Americans. Known as cramming, the extra charges include:long distance service, subscriptions for Internet-related services, access to restricted websites, entertainment services with a 900 area code, collect calls, and club memberships. The Commerce Committee's report says phone companies receive a small fee — often just a dollar or two — for allowing charges from third-party vendors to appear on their bills but due to the large number of customers the charges eventually add up. Illinois Attorney General Lisa Madigan told the panel people are unaware their phone numbers can be charged almost like a credit card and her investigations indicate customers are not even getting services in return. 'My office has yet to see a legitimate third-party charge on a bill,' says Madigan, who added most customers don't detect the charges on their bills. Senator Jay Rockefeller says Congress needs to pass legislation to protect customers from unauthorized third-party charges on their phone bills because the telephone industry has failed to prevent the practice. 'It's pretty obvious at this point that voluntary guidelines aren't solving this problem,' says Rockefeller. 'It's time for us to take a new look at this problem and find a way to solve it once and for all.'"
Re:How are they mysterious and undetected?? (Score:5, Interesting)
1) This whole article is in fact about the fact that it's a fraud. That's what makes them "mysterious" and "illegitimate": they're bills for services that were never provided.
2) A typical US phone bill that does not have any of these charges on it (so just a normal bill) has a dozen or more line items with names designed to be as obscure as possible. Not only that, but in many cases these change from month to month (both the total bill amount and the exact itemization). As a result, it's actually easy to miss a $1 charge that shouldn't be there unless you're _very_ carefully reading the bill every month. Which most people don't.
3) For reasons that are beyond me, many people have their phone bills set up to auto-pay (basically have the phone company just withdraw the money from the user's bank account). So in that case there is no cheque being written. The payment just happens; you get sent a bill (or an e-mail that you can look at the bill online, if the phone company's incessant attempts to get you to go paperless succeeded).
So the deck is stacked against people noticing the problem. If they _do_ notice it, they have to decide whether they want to spend several hours on the phone trying to get rid of the charge or just pay it and move on. I bet in many cases people do the latter.
Don't just hate the telcos (Score:5, Interesting)
But I suppose Comcast is, for all practical purposes, a telco too.
I buy broadband only from Comcast, and at a discount too from a reseller.
One month my bill doubled -- they started charging me for CableTV. Call them up, ask them why CableTV is on the bill. Wait for them to look up my records, then the lie that "someone at your address authorized the add on." I tell them "nope, I'm the only one at this address with the authority to do that, and I did not, so take it off, I'm not using it, I'm not paying for it." Next lie was "oh, we'll send someone out, you'll have to be at home for the service call." My response: "How did it get added without an installer coming out? You didn't need someone here to add it, you don't need anyone here to delete it."
My wife and kids are finally trained too. Verizon sales droid walking the neighborhood rings the doorbell when I'm not home, tries to sell my wife or kids, I forget who, on FIOS. Nope, they told the rep, you block port 80. The sales droid had no idea what that meant.
Re:How are they mysterious and undetected?? (Score:4, Interesting)
On top of paperless billing is "automatic payments" for your "convenience" (it's really for their convenience). So, mystery charges are added to a bill, you get an email with your itemized bill telling you "thank you for your payment" and good luck trying to get the company to refund that money.
It Is Theft - And Fraud (Score:5, Interesting)
I finally got tired of it and looked them up online to find how to stop the annoyance. That's when a few of the Google hits were about fraudulent charges. I immediately checked my bill and sure enough - buried in a line that I had to expand twice were the charges from Celebrity Squares.
I called Celebrity Squares and they said I had specifically requested the "service". I have a static IP address and they gave me a date, time, and my IP address to say that I had signed up and I had not. My logs don't go back that far or I would have seen what website I gave my call phone number to because they were either corrupt or compromised. Regardless, this was a fraudulent charge and had been happening for a while.
I demanded all money back but they only refunded $30. I called my cell phone company, told them my story, complained about the fraudulent charges, and they also refunded $30. $160 had been taken from my account by Celebrity Squares.
I was fed up so contacted my Senator who took up the case and contacted the cell phone company about the charges, hiding the charges on my bill (I sent them screen grabs since I do online paperless billing), and allowing Celebrity Squares (and others) to add charges to people's bills without the customer's permission. The cell company refunded all of the money taken by Celebrity Squares and was going to back bill them for the amount.
My case was one of the ones presented as evidence during the Senate hearings this week. Companies like Celebrity Squares are dirty and the cell phone companies are more than happy to let them add charges because they get a cut. They make millions off of these scams. I can only guess how much money Celebrity Squares and others make.
If you get monthly stupid celebrity quiz questions, they got you too. Go check your bill and see how much you are being charged and you can see how much money you have had stolen.
This is a huge problem.
As an aside, the cell companies can lock out those kinds of charges but you have to opt out. By default you are opted in and third party companies can add charges to anyone's bill that hasn't said specifically to block them. One of the points I made to my Senator was that that needed to change. People should be opted out by default and have to choose to allow such charges.
Please post a reply if you got slammed by Celebrity Squares. And tell your Senators. Or if you got slammed by anyone. The more who come forward, the better chance of getting legislation passed that blocks these activities and if your evidence is good enough, we might be able to get prosecution for companies like Celebrity Squares.