Cramming of Unauthorized Service Charges, Membership Fees, Subscriptions or Payments on Bank Accounts, Credit Cards or Telephone Bills Fraud
Cramming, the number one telemarketing scam of 1998, refers to putting unauthorized or nonexistent telecommunication or service charges on your credit card, bank account or phone bill.
Con artists have found the telephone billing and collection system to be a fertile area to defraud consumers. Taking advantage of changes in the telecommunications industry that began years ago with the break up of AT&T, these cons arrange to put charges on consumers' phone bills for services that were never ordered, authorized, received or used.
Sometimes a one-time charge for entertainment services will be crammed onto your phone bill. Other times it may be a recurring monthly charge. Cramming of 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.
The charges may just appear on your phone bill as a charge for either a regular long distance or a collect telephone call. People who receive these bills have no way of knowing that the charges are actually for a sex line or psychic line and not long distance or collect calls so they pay without ever realizing.
Automated Phone Number Capture
Anyone capable of capturing a consumer's telephone number can cause charges for a product or service to be included on that person's phone bill. Using Automatic Number Identification (ANI), a system similar to "caller ID," they can capture the phone number from which a call to the party originates. Thus, the only thing needed by scam artists that have ANI is a method of inducing you to call them.
You don't even need to divulge credit card or other account numbers in order to be billed. Similarly, phone numbers can be obtained, without high-tech equipment, through purported sweepstakes that require a phone number on an entry form, or even through simply drawing numbers at random from the telephone directory.
It is not possible for the owner of the telephone line to block telephone number capture through ANI on calls that they themselves or others place from their phones, and it is not possible to prevent others from access to their phone number. The person placing a call or otherwise providing a telephone number may not even be you.
Shortly after the introduction of 900 numbers, this technology was used by unscrupulous operators to deceive and defraud consumers. Once the call was placed, they were billed for the alleged service or information and the unwitting victim often had no means to contest the charge. In many cases, they never even received the promised information or service.
Here are some common ways crooks get your phone number and cram charges onto your bill. You may never get the service —just the bills.
800 Number Calls
You call an 800 number advertised as a free date line, psychic line or other adult entertainment service. A recording prompts you to give your name and to say "I want the service," or some similar phrase, to get the advertised free service. You may have no opportunity to speak with an operator or ask questions, but you are automatically enrolled in a club or service program. The phone number from which you call is captured and billed. You often never get the "free" service you called for, or the service you're billed for.
Sometimes a recorded voice directs you to press one or more specific keys on your phone to be transferred to an adult entertainment or chat line. If you do, you are connected to the service of your choice but the charge for the service then appears on your bill as an international long-distance call.
Contest Entry Forms
You fill out a contest entry form, thinking you're entering to win a prize. In fact, some unscrupulous promoter is using the contest to get your phone number, enroll you for a calling card or some similar service, and bill you on your phone bill. The disclosure on the entry form, which is very difficult to comprehend and in very fine print, says that by completing the form you agree to pay $4.95 a month for the company's services.
Direct Mail Sweepstakes
You receive a sweepstakes promotion in the mail that tells you to dial an 800 number to enter or claim your prize. When you call, a recording follows an automated script to enroll you in a club or service program. The phone number from which you call is captured and billed. Once again, the disclosure on the sweepstakes mailer is very difficult to comprehend; is in very fine print, or is a "negative option" billing, so unless you respond to refuse, they sign you up.
"Instant" Calling Cards
Someone may use your phone to call an 800 number for an adult entertainment service, and be offered an "instant calling card." The "calling card" isn't an actual card, but is rather an access process linked to the phone number from which the call was placed, whether or not they are made from your phone.
Dating Service Calls
You call an 800 number advertised as a way to meet local people for free. You're told your date will call you back, or you're asked to enter a code to be "teleconferenced" with your date. What you're not told is that you'll be charged a hefty fee for your conversation with your date.
Some ads for adult entertainment services tell you to call a number starting with 011, 500, or another unfamiliar area code. The ads don't explain that these numbers are for expensive international calls, and that the entertainment provider is making money every minute you stay on the line.
"Free Minutes" Deals
You may see ads promising "free time" for a date line, psychic line, or other adult entertainment service. When you call, you're put on hold but told that you won't be charged for this time. Sometimes, the "hold time" is deducted from your free minutes. In fact, you may be billed for some of your hold time as well as your talk time.
Hurry Up and Call
You get an e-mail, fax or even a call on your pager which says to call this number immediately, there's been an accident or sickness in your family, or outstanding bills you owe are past due, but it turns out to be just a mix-up when you call.
While connected you get a lengthy recorded message or person pretending not to understand what the call is about so as to keep you on the phone longer. You are actually being billed for the call at anywhere from $6.99 - $25 per minute. It pays to ask the operator for the location of any strange number prior to calling.
Cell Phone Spamming Becomes Indirect Cramming
Cell phone users in Tokyo are regularly bombarded with hundreds of unwanted e-mail messages as well as the newest mobile come-on: the one-giri spam scam.
One-giri is Japanese shorthand for computers that dial numbers randomly, ring once and hang up. The callers - usually dating services that phone thousands of numbers randomly - are themselves not charged because no one picks up but the incoming call leaves a phone number on the receiver's handset.
Curious to see who called, unsuspecting Japanese redial and get an offer such as "press 1 if you want to meet a friend, press 2 if ..." which they generally rush to refuse, lest they run up extra charges.
NTT DoCoMo, which runs the market leading i-mode service, processes
950 million cell-phone data messages a day, yet a staggering 85%
of them are sent to nonexistent addresses, most by computers that
randomly generate numbers and send messages searching for active
The company, which will spend $8.7 million this year to block unwanted bulk mail from entering its servers, says one-fifth of the 30,000 complaints it received in October were about annoying e-mails.
In addition to suffering bad public relations, the carriers are
seeing their network computers overload and the slowing of transmission
times as shady programmers continue to develop algorithms sophisticated
enough to bypass server walls and create lists of valid addresses
that can be resold.
While Japanese cell-phone providers are urging users to change their addresses frequently and to refuse to return calls from unknown numbers, people are still spammed on a regular basis at their own expense.
This digital epidemic will soon spread beyond Japan's shores as DoCoMo is preparing to introduce its i-mode network in Europe.
All the Wrong Places
Looking for companionship you decide to try a service advertised in the newspaper as a "free matching" service with "local singles". You are urged to call a toll-free number. When connected they ask you where you are calling from and what sort of person you want to meet. They tell you that they will have a "local single" return the call, then hang up.
Shortly thereafter, you begin receiving return calls, often many, over the course of several days from the services' employees posing as "local singles." They do not disclose in the first call, or during any of the return calls, that there is to be an amount charged, contrary to the advertising claim that the service is "free".
Nevertheless, when you later receive your phone bill, you are shocked to find exorbitant charges —described as collect or direct calls from a number in Florida, England or some other distant locale —billed to your telephone number at the rate of about $4 per minute. In a number of instances, the bills have reflected two calls allegedly occurring during overlapping periods of time to the same number.
Many people were charged hundreds of dollars on their phone bills for one company's audio entertainment service delivered through return calls. In many cases no initial call to the service was ever made and even those who did call are generally shocked and surprised to find these unexpected and substantial charges on their telephone bills.
They may even provide a toll-free 800 number on your phone bill, ostensibly for you to call with complaints or questions. However, when you call this number you find it difficult to reach a representative.
You may reach only a recorded message telling you that if you need to speak to a representative you will have to try back later because all operators are busy. Or you may be put on hold for long periods of time. In fact, you could easily spend several hours over a period of several days simply trying to reach a person who can answer questions about the charges on your phone bill.
When you finally succeed in reaching them, they tell you that you are legally responsible for the charges, regardless of who, if anyone, ordered and received the service in question.
In many instances, they initially refuse to credit your account, even though you have neither ordered nor authorized an order for their services. In some cases, they will issue a credit to you only after the intervention of your phone company or government authority.
You receive an e-mail informing you that your order has been received and processed and your credit card will be billed for charges ranging from $250 to $899. The trouble is, you haven't ordered anything. The e-mail advises you that if you have questions about your "order" or want to speak to a representative you should call a telephone number in area code 767. You don't realize that the area code is for Dominica, West Indies, because no country code is required to make the call.
You call expecting to speak to a representative about the erroneous "order" but are connected to an adult entertainment audiotext service with sexual content. Later, you receive telephone charges for the international, long-distance call.
Callers to one number are led to believe they are talking to a live person, but in fact it is a clever recording that responds to the caller's voice. Among other things, an irate-sounding man with a British accent warns, "Your check will come round or we'll come round to get it." The recording seems designed to keep callers on the line as long as possible, and is reportedly billed at $25 per minute.
Others reported that this "man" with a British accent kept telling them to hold on while he picked up other phone calls and supposedly yelled at his staff. He continued to yell at the callers as well, saying "send the money," and yelled into other ringing phones as long as the callers remained on the line.
"This scam used low-down tactics and high-tech tools to rob consumers in their own homes," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection.
They contacted people using bulk e-mail —commonly known as spam —using inactive return addresses which prevented you from refuting the orders by e-mail.
Note: A viewer has indicated that this particular scam event is actually an urban myth that never really occurred, except in the mind of the initial storyteller. Should anyone wish to dispute this claim please write so that it is not unintentionally perpetuated.
I Know So Many Girls
You get a call and the operator asks if you would accept a collect call from "Jennifer" (sometimes "John" is used). If you agree, you then hear a prerecorded message that informs you that you have just made an $8 donation to a nonexistent missing children's charity.
One operation from Mexico calls U.S. residents of Mexican ancestry and asks if they would accept a collect call from a person with a common Spanish first name along with their surname.
Many people accept the calls thinking they are from relatives bearing the names given. Even though the calls are shortly disconnected as "mistaken" numbers they all incur a minimum $57 charge.
A Recurring Nightmare
Somewhere around 900,000 victims across 22 countries have had over $43 million dollars worth of fraudulent or nonexistent services crammed onto their credit cards at the rate of $20 per month.
The Federal Trade Commission has won a $37.5 million verdict against a group who bought access to lists from a California bank that provided the account numbers for more than three million valid Visa and MasterCard credit cards.
Rather than use the lists to confirm that potential customers had valid cards, the defendants debited the cards for "Web site services" the cardholders had never used. In effect, they stole and processed Visa and MasterCard numbers from the database such that over 90% of their $49 million a year in "sales" were actually unauthorized charges.
J K Publications (alias Webtel, Netfill, etc.) and their front companies generated about a third of all customer complaints at a major card company in late 1998. Their merchant accounts had a "chargeback" rate 100 times the national average but each time a merchant account was closed by the credit card companies, they would open a new one. At one point, they alone, accounted for 4% of all Visa chargebacks.
They used at least five different merchant accounts and four fictitious business names to process the transactions. The timing of each new merchant account application coincided with the impending threat of being placed on VISA USA's "active monitoring" list for excessive "chargebacks" -- amounts debited to cards but disputed by the consumers who were charged.
According to U. S. District Court Judge Audrey B. Collins, "A shocking 40% to 50% of the "web" charges were taken from people who said they did not have a computer and had not given their card numbers to anyone."
Consumers, many of whom were billed repeatedly over successive months, appealed to their credit card companies for help, but many banks will only go back 60 days and since the total for two months was less than $50, the credit card company was not obligated to refund everything. People were also told that they could not block future charges to the cards so many finally canceled their credit card accounts as the only way to avoid the charges.
The $37.5 million damages verdict represents the illegal charges minus the amounts that consumers already received through chargebacks and credits. The FTC has identified in excess of only $20 million in defendant's assets, so it is not clear whether the $37.5 million ordered by the Judge will be available for consumer redress.
One defendant was barred for 10 years from owning, controlling, holding a managerial post, consulting for or serving as an officer in any business that handles consumers' credit or debit card accounts, while another fled to Jamaica soon after he was served with the complaint.
The distributed nature of the Visa/MC system, with each bank managing its own "business", is a weakness in the system. Visa International does not have access or control to Merchant Account information. Only the banks have that information.
Networked e-commerce allows criminals to test credit card numbers across the merchant account system in high volume. Using credit card number generation technology they can attack a very large number of victims in a widely distributed manner with small transactions, thereby delaying detection and reducing the incentive for prosecution.
Though it allows credit card numbers to be used without identifiers it also enables this type of fraud. This has privacy advantages but it would be a lot harder to generate credit card numbers if identifiers were required.
More info on the Netfill Cramming Case
You Actually Save 1.46%
The use of bogus "rebate" checks is often used to deceive consumers into signing up for such ongoing billable services as Internet yellow page directory and Internet services.
YP.Net; Telco Billing, Inc.; Publication Management Inc. and their owners
The FTC alleged that they sent checks for $3.50 marked "REBATE ACCOUNT" to people all over the country but that nothing on the front of the check alerted consumers that, by cashing the check, they were agreeing to purchase an Internet yellow page listing at the rate of $19.95 per month for a year, or that the charge would automatically be placed on their telephone bill.
The FTC charged that because only a notice printed on the inside of the envelope spelled out the terms and conditions of the agreement it was deceptive.
The settlements will not only bar them from using the term "rebate" on solicitation checks in the future but they are now required to clearly and conspicuously disclose the obligations you will incur by cashing such solicitation checks. They will also be required to send notices to confirm service and billing agreements and to give people the opportunity to cancel.
In addition, they are required to give certain affected consumers the option of a two month refund.
A related company, Simple.Net, along with Simple Access, Inc., Dial Up Services, Inc., and ISP Marketing, Inc. engaged in a similar marketing scheme and are subject to a similar injunction.
Enhanced by Fraud
The FTC, which accused San Antonio Texas-based New Century Equity Holdings Corp. and two of its subsidiaries of "cramming" or hiding unauthorized charges for Web site design and "other enhanced services" on the phone bills of thousands of unsuspecting consumers has settled its complaint.
New Century and its subsidiaries, Billing Concepts Inc. and Enhanced Billing Services Inc., agreed to a settlement of the complaint which alleged that the companies attempted to force consumers to pay for Web site design services and calling cards that the consumers did not ask to receive.
It was noted that New Century and its subsidiaries did not sell the services in question, but rather acted as "billing aggregators," serving as intermediaries between the fraudulent vendors and the phone companies.
As such they provided the portal into the telephone billing system, without which crammers would have no way of placing charges on consumers' phone bills. The FTC has also filed complaints against several of the crammers who used New Century's services
Under the settlement deal, New Century Equity Holdings agreed to notify consumers who may have been bilked and surrender $350,000 that it and its subsidiaries collected or sought even after complaints from consumers that they did not authorize the charges in question.
A Good Job You Called
Two men have been charged in a cramming scam that bilked 5,600
people out of $120,000 by charging a fee for Chicago city job applications.
Joseph Peters of Chicago and Canio Carl Saluzzi of New York were charged with placing ads with local newspapers that offered "City jobs, now hiring, no experience".
The ad instructed applicants to contact a telephone number at a charge of $19.95 per call.
People who called the number were greeted with a recorded message
that instructed them to call a different number. Those who called
the second number were told a list of jobs was available by visiting
or calling City Hall, or by checking the city's Web site.
Thousands of residents looking for work were duped into paying for job listings that are free and available to anyone contacting City Hall.
City officials, who were alerted by people who noticed the charges on their telephone bill, had Ameritech shut down the advertised phone line. Officials said people who called the number should contact Ameritech to dispute the charges.
Uncertain Future In The Cards
02/02 - Miss Cleo, is a familiar face on television
advertisements which offer viewers an insight into their lives
through free psychic readings or Tarot cards.
"Call me now," she implores in her husky Caribbean accent, as a toll-free number flashes up on the screen. But to actually speak to the psychic, callers must dial another number that charges $4.99 a minute after the first three minutes.
Federal regulators, who said two Florida-based companies behind the psychic -- Access Resource Services Inc. and Psychic Readers Network -- were reaping huge profits from so-called free readings that on average cost consumers $60, have filed a complaint accusing them of using deceptive television advertisements to scam as much as $360 million from hotline callers.
Sean Moynihan, a lawyer for the two companies, denied the charges even though Howard Beales, head of the FTC's consumer-protection division, said the two firms, previously the target of legal action in nine separate states, were "permeated with fraud."
The federal agency said that while it has received more than 2,000 complaints about Miss Cleo over the past 18 months, they estimate that up to 6 million people might have been affected.
The federal complaint seeks to put a permanent stop to the deceptive advertisements, appoint a receiver to preserve company assets, and freeze the assets of the firms' chiefs, Steven Feder and Peter Stolz.
Tips to help you avoid cramming scams.
Be aware that your local telephone company may bill for services provided by other companies.
Be especially wary if you're told to enter codes, leave your name, or answer "yes" to prompts. Unscrupulous entertainment providers may use this ruse to send you a bill.
All 900 numbers cost money, even if you're calling to claim a "free" prize. All 900 numbers that cost more than $2 must give you a brief introductory message about the service, the service provider, and the cost of the call. You have three seconds after the message ends to hang up without being charged.
Consider getting a 900 number block; it stops calls from going through to 900 number services. Blocks also are available for international, long distance, and local toll calls. Call your phone company for details.
Examine your phone bill for recurring monthly charges. These charges typically appear as "Miscellaneous Charges and Credits." They may be so small, or described in such general terms, that they're easy to overlook or confuse with valid services you may have ordered from another provider. Watch for fees described as "Min Use Fee," "Activation," "Member Fee," "Voice Mail," or some similar phrase.
If you find an error on your bill, instructions on your statement will tell you who to call or write to dispute the charge. Follow up any phone conversations with a letter, sent by certified mail, return receipt requested. Keep a copy for your files.
I really appreciate your site. Between yours and Quatloos.com, I have been able to reveal several scams in progress that have been presented to me in recent years. This latest problem I face may be up your alley, maybe not.
Recently, I received "membership packets" from several different companies describing themselves as travel clubs and buyers clubs. The common thread these "clubs" all share is that they are offering a free trial membership to whatever it is they peddle and if I DON'T take action to either call or write them to cancel my "membership" during the trial period, they will bill my credit card for whatever membership fee they're charging.
Keep in mind that we were not contacted by any telemarketer or by any other method beforehand, and never authorized these companies to enroll us in anything, and never provided them a credit card number!
I contacted one of these companies who said they had a recorded telephone authorization from my wife, but could not produce same upon my demand. They then proceeded to offer me extra "features" at no cost if I would reconsider my cancellation.
Of course, I told them what to do with their "features" and made it clear that I wouldn't purchase any product, no matter how outstanding the value, from someone who resorts to these kind of marketing tactics. I suspect that what these companies are doing is waiting for you to call and cancel your "membership" so they can offer some kind of extra throw-in to change your mind, and then that's when they actually get your credit card number and voice authorization.
However, I have not taken the gamble of ignoring one of these clubs to see if they will actually charge one of my accounts. Is what these companies are doing legal? If not, is there any bureau I can report them to? Any insight or advice you could provide would be appreciated.
Thanks, Mike Wilcox
Thanks for the kind words. Just out of curiosity, who do you reveal these scams to? As for this negative option billing scam I think you hit the nail on the head. They just want you to call so they can get their claws into you. I am surprised that they are not also using the cramming technique of billing your phone call as well, regardless of the outcome by tricking you into calling a 900 or out-of-country long distance code.
I wish I could advise you who to call other than the FTC. From my FAQ page there is a link to Reporting the crime to other agencies as well. I would like to post your message on my site if I may, perhaps we will hear more on this from other viewers.
You may recall I wrote you last week about the trouble I was having with companies enrolling me in their discount/travel/buying clubs without my permission. The literature they send in the mail says you get a "30 day free trial membership" and if you do not cancel at the end of the "trial period", you are automatically billed for the membership fee. Even if you never consented to be enrolled in the program.
Well the story got uglier since I last wrote you. Turns out that Imperial Holidays debited my account before I even had a chance to get off my cancellation letter. Furious, I called them up and was told that they got our information from a company selling a gadget on TV which my wife bought over the telephone last month. At the time they took the order, they asked her if they could send her some information on a discount travel offer they had. At no time did they mention they were enrolling her in any "free trial membership".
But here's the kicker: They told me that the 30-day trial membership began the day my wife agreed to let them send her the information. Since I did not get this information until 3 1/2 weeks later, I effectively had 3 days to call and cancel this "free" membership before my account would be charged!
To make a long story a little shorter, Imperial Holidays (also dba Crown Holidays) agreed to refund our money, but said it would take up to 30 days to credit our account. I called my bank to dispute the charge, then called the Florida Attorney General to file a complaint! The bank says they will likely credit the money to my account while they attempt to recover from Imperial Holidays, but now I'm committed to doing anything and everything I can to expose this and any other scams like it.
Please feel free to post any or all of this correspondence to your site if you feel it will help protect anyone else from this filthy scam!
Mike WilcoxUpdate 02/02 - I had written you in the past regarding Triad Discount Buying Service, a company that buys credit-card numbers gathered by other companies marketing products on TV commercials, etc., then enrolls them into their program and charges an annual fee without their permission.
While I was successful in getting money back that they stole from me on three different occasions, others were not so lucky. Thanks and keep fighting the good fight!
Crown Holidays "Membership" scheme
Date: Fri, 03 Aug 2001
I recently found your website dealing with scams and fraudulent schemes. I have a story to share with you which is similar to the posting that Mike Wilcox has on your site.
My wife recently bought a gadget thru a television ad and we were told that we would be enrolled for a free 30-day trial membership in "Discounts USA" (a company offering discount travel programs and such) and my card would automatically be charged a membership fee after the trial period unless I called up and cancelled.
We cancelled the membership on the same day.
When my credit card statement came the next month, there was a membership charge from this "Discounts USA" and from a company called "Crown Holidays" that we had never even heard about.
I called up both companies and asked for an explanation. I took particular exception to the charge from "Crown Holidays" because they had not even informed us that we were being enrolled for a membership program. No literature, no brochures, nothing. Anyway, both companies apologized and promised to credit back the membership charge to my credit card account. "Discounts USA" did.
When I called up "Crown Holidays" again, I couldn't even get to talk to a customer service representative. They were apparently directing all complaints to their email address. So, I wrote them a mail threatening a lawsuit in the hopes of recovering my money. As is to be expected, I have yet to see that membership money.
Anyway, I have gone the same route as Mike Wilcox and disputed the charge with my credit card company and also filed a complaint with the Florida Attorney General. I am curious to know, though, how far Mike has gotten with this approach.
I sincerely hope that "Crown Holidays" gets pulled up for their fraudulent practices and am willing to put in any effort to expose these guys.
As a matter of idle curiosity, I often wonder about the holiday deals from Crown Holidays that guys who do "sign up" for membership get. Are they promised a holiday in the Caribbean and get put on a cargo plane to Surinam (No offence to my Surinamese friends; I'm sure it's a beautiful country in its own right. But when I think of the Caribbean, I usually think Bahamas)?
For info on Vacation Memberships.
Well, Crown Holidays backed off and they have credited the money back into my account; it showed up on my last credit card statement. So, I'm okay on that front. I'll just be more wary of buying over the internet or phone from now on.
As No Longer Seen On TV
12/31/01 - Boca Raton-based Triad Discount Buying Service Inc., related companies and their operator, Ira Smolev, will pay $8.3 million in consumer restitution a $9 million multi-state settlement with a group of buying clubs alleged to have deceived consumers into purchasing club memberships.
Some consumers, when purchasing items seen on television or over the telephone, would be signed up for a free, 30-day membership to a buying club - sometimes without their knowledge. The third-party companies would then provide the consumers' credit card numbers to the Triad companies, and within 45 days the companies charged membership fees to the consumers' credit cards without their authorization.
Under the agreement, approximately 275,000 individuals who filed complaints against Triad companies nationwide may be eligible for partial membership refunds from the companies pending court approval.
In addition, Smolev, as well as the Triad companies, are required to drastically revise their marketing practices to avoid future deceptions. Included in those changes are prohibitions against misrepresenting "free" offers of goods or services and failing to disclose any obligations of consumers in accepting trial offers. The companies are also prohibited from signing up new members or renewing existing memberships without express, verifiable authorization from the consumer, and from obtaining or disseminating consumers' personal billing information, including credit and unique identifying information, without authorization.
Cramming Voicemail Down Your Throat
I received a phone call from a man who said that he represented a new telecommunications company in the area and he wanted to verify my address so that he could send information about the company's new service.
I asked what the service was but he just repeated his opening speech about address verification and added that he would only be sending four pages on the product which I could throw in the trash if I did not like what I read.
Thinking back, it was very leading to get me to say yes to the questions, even making a joke of the repetition which sort of made me feel stupid for being concerned and asking questions, though he would still not tell me what the product was.
Then the following day I received a phone call from another man from the shipping department saying they gotten my zip code wrong and wanted to verify my address.
I stopped him and said that as it was just paperwork why was it being handled through a shipping & handling department? I stated that I did not purchase, order or agree to anything.
He said "Yes, but I need to verify your address..." and started his speech over again just like the other guy did. Again, every time I interrupted he would start over. The last thing he said was our service would be added to your phone bill and quoted a price. Thank you and have a good day, bye.
It was very frustrating and by the time I hung up I knew there was something wrong but they had my info so I would just have to wait and see what the scam was.
I realized afterwards that I should have hung up or refused to answer the questions but with their sales pitch and tone they both kept me rather flustered and I simply didn't think fast enough to respond correctly. Now I have received a letter that reads:
Welcome to VENUS VOICEMAIL SERVICES - the Next generation of communications!
The following package contains information about your new service provided by Venus VoiceMail Services... bla bla bla Your New Voice Mail Number is: xxx-xxx-xxxx Your Access Code is: xxxx Thank You and Welcome bla bla bla If at any time you need assistance, please call one of our Customer Service Representatives at: 1-888-948-1930
In very small print at the bottom of the letter it reads - Your Activation Fee is $19.95 Your Monthly Charge Will Be $14.95
As soon as I received this mail, I tried to call the phone number but got a message. "Office hours are Monday - Friday 8:00 - 8:00. This machine will not accept messages, please call back during normal business hours."
The customer service for Verizon, my telephone company was closed as well so I can't contact them to see if I can stop this from being added to my bill until Monday. I don't have the time to play this kind of game at work where there could be repercussions for using business phones and time for personal issues.
I would really like to go after the people responsible for this mess. Any advice would be greatly appreciated.
Cynthia Coffey 03/23/02
I also foolishly allowed Venus Voicemail Services to send me the information because they told me I could throw it in the trash. I basically told them they could send it to me just to get rid of the person on the phone.
Now I have received a letter disclosing an activation fee of $19.95 and a monthly charge of $15.95. After reading about cramming I feared it would be billed through my local telephone company so I phoned them back to cancel.
They were able to pull up "my account" and while I was assured it was now cancelled I also asked for a cancellation number. The "support lady" did in fact give me a number though I have to wonder about that.
When I asked who their parent company was she told me this:
Mercury Internet Services
240 Arch Street,
Philadelphia, PA 19106.
I wonder if it is still considered a scam since I think I was able to "nip it in the bud."
Connie Hudson 05/04/02
We Meant a Sinner Every Time
04/02 - Though they can't find them yet, the FTC is moving to shut down a multimillion-dollar e-mail scam run by BTV Industries in which Internet users responding to an official-looking contest notification for a Sony PlayStation 2 or some other prize were funneled into a pay-per-view adult Web site.
Consumers who responded to the contest notification were directed to a Web page that appeared to be operated by the popular Web portal Yahoo. From there, consumers were prompted to make a "toll-free" Internet connection to claim their prizes.
By accepting that prompt, it downloaded a file that auto-dialed a 900 number and funneled you into an adult Web site, where you were charged up to $3.99 a minute by AT&T who has been cooperative about paying refunds to consumers who complained about the charges.
Although the contest notification did eventually trigger a disclosure box that outlined the fees for entering the site they were in fine print and ran totally contrary to the terms mentioned in the contest notification.
Yahoo Inc., which is not affiliated with the Yahoo sweepstakes spam campaign has also filed suit against the alleged scammers.
I'm a reporter at the Voice of America. A family that was being spammed by disgusting porn offers and pop-up ads on both parents' computers got some bad advice and is now in a minor pickle without knowing how to get out of it.
A friend told them that the way to end the annoying spam of porn was to actually ACCEPT one of those "free three-day offers," join the "service," and immediately resign, on the theory that only on the inside would these people listen to their requests to shut the stuff down.
They did so and now are trapped in the site, which blatantly says it will ignore all emails and that cancellation of membership will be accepted only through the "customer service" site on a website whose address is listed -- which turns out to be the same impregnable site that lists all kind of perverse options but has NO customer-service site at all.
They foolishly gave these people their credit-card number as "age verification," and are sure they'll soon get billed for "regular" monthly membership -- none of which they want. Yet the site threatens all kinds of legal action and harmful damage to their credit ratings to anyone who doesn't pay the premium.
They are considering closing the credit card and getting a new one, as well as changing their email address -- and ignoring payment to these scam artists -- but are worried that "membership fees" will keep piling up and that, indeed, legal action will eventually ensue, damaging their credit. Not only that, their credit card info has been given to disreputable people, so that's in danger, too. Surely no judge or jury would take the side of a filth-pot of a business, or would it?
This website, in addition to being disgusting, appears to be a pure and simple scam -- enticing people into a "service" and then giving them no way to get out. Setting aside the vile nature of the material, even those who are just curious and take the "free trial membership" have no way to end it. They get sucked into full "membership" with no way to get out.
Do you have a suggestion, or can you recommend someone who can suggest a strategy to permeate this terrible scam, withdraw from "membership," and protect their credit card info and credit rating?
How do those -- who are NOT into pornography -- and even those who may have been enticed to "join" out of curiosity -- get OUT of such entanglements?
Ted Landphair 08/05/02
If ILD Teleservices is the name that appears next to mysterious charges on your phone bill it's because ILD, among other things, is a "billing clearinghouse" for companies that bill for their services by placing charges on local phone bills.
ILD's Web site provides no clue to consumers as to how they might dispute inaccurate charges. However, it is one of seven clearinghouses that belong to something called CERB, ( www.cerb.org ) the Coalition to Ensure Responsible Billing.
CERB members subscribe to "stringent, pro-consumer policies for ensuring that only legitimate charges appear on consumers’ bills."
Fred Lloyd - Vice President, Strategic Planning firstname.lastname@example.org
ILD Telecommunications, Inc.
5000 Sawgrass Village Circle, Suite 30
Ponte Vedra Beach, FL 32082
(904) 273-2440 Tollfree: 1(800)433-4518 Fax: (904) 285-3616
Some company named Americount Telephone recently took $299 from our checking account.
Usually when money is taken with authorization, the company posts a telephone number but not in this case. Further investigation turned up a fax number only. One other number was given and we reached an operator who informed us that they have fielded numerous complaints about this company and that they are being investigated.
Apparently, they have victims in just about every state except Iowa though I have searched for the company and have had no luck whatsoever. If anyone has heard of this company or has any tips on how to find and report them will be greatly appreciated.
Kelly Lawler, Delaware 09/25/02
10/03/02 - Jefferson City, Mo. - Attorney General Jay Nixon on Oct. 2 sued ( 72K) a Montreal telemarketer that has been calling Missourians and asking for credit card, bank account and Social Security number information under false pretenses, including telling consumers that the telemarketers are working with the Attorney General's Office to try to stop fraud.
Nixon sued AXS Marketing, which operates under the name Telguard, and its owner and president, Oren Pinto for violating Missouri consumer protection laws which have resulted in some Missourians seeing unauthorized charges or withdrawals to their accounts.
"It is outrageous enough that AXS is trying to obtain sensitive information from Missourians by telling them that the company can help remove what are, in reality, non-existent charges on credit card and checking accounts and then turning around and making fraudulent withdrawals," Nixon said.
"AXS compounds this deceit in some cases by telling consumers that they are working with my office on anti-fraud efforts," Nixon said. "We are going to put a stop to this, and we are asking the court to order restitution and penalties as well."
Nixon said the misrepresentations by Canadian telemarketers AXS Marketing include:
|Telling consumers that, for a fee, AXS is able to protect consumers from unauthorized charges;|
|Telling consumers that such unauthorized charges have been made to consumers' accounts;|
|Stating that AXS can help prevent telemarketers and direct mail businesses from contacting or soliciting consumers; and|
|Representing that AXS is working with the Attorney General's Office or other law enforcement agencies, when such is not the case.|
The lawsuit asks the court to order them to pay restitution to any Missourians harmed by their conduct, as well as appropriate penalties and costs.
Last year Nixon obtained a court order requiring another Canadian telemarketer from Quebec to pay $14,500 in restitution and to the state for making calls to Missourians to sell placement on a phony "international" No Call list.
I am currently trying to research a company called DirectOne, which sells long distance telephone time. There have been many complaints to various state public utilities commissions that DirectOne gets credit card numbers from other telemarketers and places unauthorized charges on the cards. We have had at least 16 complaints to the PUC here in South Dakota alone. My uncle happened to be one of the victims, which got me interested in it.
He saw an ad on TV to purchase WWII documentary video tapes, which he called, got a company called Publishers Choice, a/k/a National Syndications Inc., gave them his credit card # and ordered the tapes. Shortly afterwards he discovers a charge for $49 on his credit card from DirectOne, who he'd never heard of. He called, and they claimed that he had ordered the service from Publishers Choice. The other victims tell a similar story.
Direct One previously did business as Direct American Marketers, Inc., a sweepstakes company that lured people into calling a 900 number to collect their prize. They were eventually sued in many jurisdictions, with a number of multi million dollar judgments imposed against them. Anthony C. Brown was barred from engaging in any prize promotions that involve pay-per-call services in the future. (FTC File No. 962 3232 (DAMI))
Direct American Marketers required contestants to spend about $28 to call a 900 number to find out if they had won a $7,500 prize. The average call cost $3.98 per minute for seven minutes.
The official looking letter and $7,500 "check" from Direct American Marketers Inc., 1 NCC Plaza, Laguna Hills, Calif. had outside markings with the words "official business", "fiduciary statement enclosed" and "penalty for unauthorized use."
They took bankruptcy and in August 1999 Direct American Marketers Inc. changed it's name to Direct One Inc. with Anthony C. Brown as president and Reta Fishman as the other director. Information for the Santa Anna corporation on file with the California Secretary of State.
The SD Attorney generals office just finished an action against DirectOne in which Direct One agreed to refund anyone in SD who claimed they were duped. Evidently the AG's office sent out 1400 letters and got lots back claiming they didn't order the services. Only a couple people said they had actually asked for the services.
One letter from a company called DirectOne Communications thanked people for enrolling in their service and stated that "Each month on the 28th DirectOne will automatically refresh long distance minutes for a total of $43.90".
I suspect that there is a relationship between these companies and much more to the story, but I don't know how to research it.
Mike Abourezk 10/26/02
Close Your Eyes and Open Wide
My latest phone bill included a $14.95 for Nationwide Voice Mail setup which I did not order. A call to the company revealed that a friend had supposedly ordered the service however, the phone is in my name, and I am the only one authorized to order anything.
He is not an occupant of this residence but the company representative
said that a search on U.S. Postal records revealed that he
received mail at this address, therefore the order was valid.
First of all, I want to know why/how a company has access to U.S. Postal records. I was under the impression that only law authorities/agencies and the like have access.
Secondly, although he has received a piece of mail here, he has never lived here. But here is the kicker. He never ordered the service in the first place.
He responded to an email for "$1,000 in Name-Brand Grocery Coupons". Thinking his sister, who uses coupons, would be pleased, he responded to the offer, and gave his information at the internet link provided, and clicked the continue button.
The next screen asked for credit card/checking account information to activate the offer. Since he has neither, he simply closed the window without completing the offer. He never got the chance to view the offer details since he didn't complete the registration process.
However, this doesn't seem to have bothered Nationwide one bit, since they already had his information in the first screen, they signed him up for this service, completely without his permission, which of course would have been moot, since he does not have authority to order any services to be billed to my telephone bill, nor was that his intention.
I have since found a copy of the arrangement at another website offering the same "deal" http://register10.grouplotto.com/deals/terms_nationwide_1000.cfm
Upon contacting the company at the number provided on my phone bill, they told me that the set up fee was non-refundable and the representative refused to let me speak with a supervisor. When I indicated that I would report the company to the authorities, he told me to go right ahead as this area of business was "unregulated."
I have no doubt that it is unregulated, however that certainly doesn't make it legal.
An email from the company indicates that his (really my) service has since been canceled, however I would still owe the non-refundable set-up fee.
Thank you for contacting our Customer Service Department. Your service cancellation request has been received and your toll-free voice mail service has been cancelled. No additional information or effort on your part is necessary. If you wish to confirm the cancellation of your voice mail service, just visit www.nationwidevm.com/cgi-bin/cancellations.
Effective immediately, Nationwide Voice Mail will not process any additional monthly reoccurring charges against the telephone number you originally authorized us to bill when you responded to a recent email solicitation promoting our service.
However, you remain responsible for any of the charges that have already appeared on your local telephone company bill, and for any charges that may have already been processed for the billing cycle that has yet to appear on your next local telephone company bill.
If you did not wish to cancel your toll-free voice mail service, please email your reactivation request to email@example.com. Should you require any additional assistance, please call customer service at 800-799-9019.
Nationwide Voice Mail Company:
Nationwide Voice Mail, Inc.
P.O. Box 990-165
Boston, MA 02199
This for a service that was never used, authorized or even asked for.
Tessie L. Daniels 05/02/03
Not Running a Bed and Pornfest
Several months ago a young man who was staying at my home used my computer to look at porno sites. He is a minor but clicked the button that said he was 18. The porno company disconnected my computer from my local server and connected it to a company outside the country that charges $8.10 a minute.
He was on line for less than an hour and the bill was almost $500.
The phone company cut the bill in half because I complained to them but I am still fighting not to pay the bill. I understand that there is a law that states that clicking the button to say that you are 18 is signing a legal contract. The boy who did this was not 18 so there is no contract.
I intend to fight this as long as I can and would appreciate any advice or information that you can give me.
Jeanne Whipple 05/18/03
See Before You Agree
I read recently on your site that someone was charged $500 because a child who was visiting her house, and using her computer, clicked the "I agree" button on a porn website.
I assume the details of the charge were listed in that little contractual box which I along with most internet users have come across and probably ignored because we have seen it a hundred times and have had no negative impact from clicking the I agree button.
What is stopping somebody from implementing these sort of tactics on a more mainstream website where you wouldn't be suspect of malicious intent? For example if you go to a weather related website to check up on a trip you are about to take and you have to click an agree button?
I can't believe that the telephone company is actually trying to charge this person. This should be illegal. How can you be charged for something which is buried in the body of a document? I guess this goes back to the old saying "always read the fine print"
Dan Brown, B.C. 09/03
Mercury Internet Services, Epixtar Corp, GoInternet Net Inc, SBA Online Inc have all had complaints for cramming offenses.