Hey! Found a very interesting article about fraud again. What can I do if there is so many fraud arround? So, read it for being ready and enjoy!
Sep 02, 2009 (The Hutchinson News – McClatchy-Tribune Information Services via COMTEX) — Sarah Otto became suspicious last month when she noticed a $15 spike in her local phone bill.
So, the 26-year-old Hutchinson resident called AT&T to inquire why she was being charged an extra $15 for “Enhanced Services” — and to find out what exactly those services were.
AT&T directed Otto to call the 800 number listed under “Enhanced Services” on her telephone bill. As it turned out, Enhanced Services was short for Enhanced Services Billing Inc., or ESBI, a San Antonio-based company that bills consumers for third-party vendors.
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In Otto’s case, ESBI began billing her on behalf of the company Residential Email.
After a series of frustrating calls to automated voice-messaging systems for both companies, Otto said, she finally reached a Residential Email representative.
“The lady I spoke to was somewhat rude and said the company sells e-mail accounts,” Otto said. “She said I got on the Internet, clicked on an ad, verified my maiden name, my mother’s maiden name and inputted all of this info into their system.
“They said I confirmed my information in an e-mail and they called and confirmed it with me, too. When I told them I was not authorized to make changes on the account, because it’s in my husband’s name, the lady said, ‘Oh, that’s right. It was your husband.’ ” Otto says none of that happened, though. Neither she nor her husband, Adam, signed up for Residential Email or confirmed the service in e-mail or on the phone.
And although the company has now offered them a refund, Otto believes she was a victim of “cramming,” in which a company illegally adds unauthorized charges for various services to a consumer’s local telephone bill.
Otto has since filed a complaint against ESBI and Residential Email with the Kansas Attorney General’s Office, as well as the Federal Trade Commission.
She also contacted AT&T for help.
“AT&T told me to get a confirmation number on the refund or (the company) might not do it,” Otto said. “I had to ask six times to get a confirmation number from that lady.
“They knew full well this is going on, and the woman at AT&T said this happens a lot and (third-party companies) count on people not checking their bill.” Marisa Giller, an AT&T spokeswoman based in St. Louis, acknowledged Enhanced Services, or ESBI, is one of AT&T’s largest third-party billers, but she said reports of cramming were not common.
Third-party vendors adhere to strict guidelines from AT&T, Giller said, with less than 1 percent of AT&T customers’ bills bringing cramming complaints. She did not know how many cramming complaints had been lodged in the Hutchinson area or in Kansas.
The Kansas Attorney General’s Office received 117 complaints about phone bill cramming in fiscal year 2009, according to Ashley Anstaett, an attorney general’s office spokeswoman.
Otto, however, isn’t the only local citizen with a cramming complaint. Cindy Boswell of Hutchinson also reported noticing a $15 increase in her phone bill in late July.
Boswell was also billed by ESBI, except she was billed for voicemail services she never signed up for through Intelicom in Henderson, Nev. She is still awaiting a refund from the company.
Her neighbors have had the same problem, Boswell said.
“My neighbor was told her husband signed up for the services, but her husband is dead,” Boswell said.
Both Otto and Boswell have had AT&T block third parties from their accounts, something Giller acknowledged customers can opt to do.
But Otto thinks the listing of “Enhanced Services” on her phone bill was deceiving, as it was listed under plans and services, service changes, repair services, Internet services and long-distance services. She didn’t expect “Enhanced Services” to be the name of a company.
“It’s very misleading and very clever on this third party’s part,” she said. “We thought it was an extra service put on our phone like Caller ID, not a third party out of Texas.” Digging deeper Frustrated by the deception, Otto did a little research of her own and discovered Enhanced Services Billing Inc., a subsidiary of New Century Equity Holdings Corp., had already been investigated by the Federal Trade Commission several years ago for deceptive practices that violated the FTC Act.
In August 2001, New Century, owned by Platinum Equity LLC, settled with the FTC and agreed to repay $350,000 to consumers.
ESBI was also required to provide notices to consumers that their bills may contain unauthorized charges for enhanced services. They were required to inform consumers how to obtain a refund, too.
The FTC’s complaint charged ESBI with falsely representing that consumers were to pay charges on their telephone bills for Web sites and other items they had not ordered or authorized others to order for them; and ESBI unfairly attempted to collect — or arrange for local phone companies to collect — payment of charges from consumers for unauthorized services.
ESBI, according to the FTC, served as a “billing aggregator,” acting as an intermediary between vendors and local phone companies.
“Once the charges are collected by the phone companies, the billing aggregators, after taking their fee, pass the revenues back to their client vendors,” according to an FTC news release on the 2001 settlement.
“Although billing aggregators’ services allow consumers to use their phone services as a payment mechanism, they are also susceptible to abuse if the billing aggregators fail to adequately police the practices of vendors who may engage in fraudulent billing.” FTC director of public affairs, Claudia Bourne-Farrell, said ESBI is under an FTC order and that the company is monitored by the FTC to ensure compliance.
When contacted by phone Tuesday, a spokeswoman for ESBI in San Antonio described the company as a “billing clearinghouse” that bills for numerous third-company vendors. She said the company assumes the charges are legit and authorized by consumers and does not look into the charges.
