Tens of thousands of consumers lost millions of dollars because of a simple scam that went unnoticed.
"You'd have to be a genius to figure out all the taxes and numbers on here," said Clark Beerman, talking about the phone bill for his business.
Beerman has a lot of lines and a bill that's multiple pages.
"This one particular item kept showing up," he explained. "This is where I found the charge they were sticking on my bill."
It was buried below taxes and fees, and for most people who got targeted in this scam, it ranged from around $13 to $40.
"In this case there were tens of thousands of cramming victims, and losses totaled over $22 million," said U.S. Postal Inspector Andrew Wang.
Two scam artists, working through a middle man, told phone companies that various consumers and businesses had agreed to pay a monthly fee for their service: an internet directory. But that wasn't the truth.
"They were perpetrating a false billing scheme," said Wang.
In other words, the con-artists were billing people who never ordered their service. It's called telephone cramming.
"The placement of unauthorized charges onto a consumer or business' telephone bill," Wang added.
The victims, most of whom never noticed the charge, included thousands of business owners like Beerman, who eventually complained to their phone company. Those complaints ended up in the hands of U.S. postal inspectors, who busted the operation.
"It might have been going on for a year; it could have gone on forever," Beerman said.
Two brothers pulled off this scheme. One was convicted of mail fraud and money laundering and sentenced to 2½ years behind bars. The other was convicted of mail fraud and served a 20-month sentence. They invested most of their illegal proceeds in real estate, some of which the government seized.
The victims received only pennies back on every dollar they lost.
If you see unknown or suspicious charges on your bill and think you are a victim of telephone cramming, the Federal Communications Commission says first, call the company that charged you for the calls or services that you did not authorize. Ask them to explain the charges and request an adjustment if they are incorrect.
Then, call your telephone company, explain your concerns and ask their procedure for removing incorrect charges from your bill.
If you still aren't able to fix your bill, you can file a complaint with the FCC:
There is no charge for filing a complaint. You can file a complaint using an FCC online complaint form.
You can also file your complaint with the FCC's Consumer Center by calling 1-888-CALL-FCC (1-888-225-5322) voice or 1-888-TELL-FCC (1-888-835-5322) TTY; faxing 1-866-418-0232; or writing to:
Federal Communications Commission
Consumer and Governmental Affairs Bureau
Consumer Inquiries and Complaints Division
445 12th Street, SW
Washington, D.C. 20554.
Filing a Complaint with Your State Public Service Commission or the FTC:
For charges for telephone services provided within your state, contact your state public service commission. For contact information for your state public service commission, visit www.naruc.org/commissions.cfm or check the blue pages or government section of your local telephone directory.
For charges on your telephone bill for non-telephone services, you can also file your complaint with the Federal Trade Commission. You can file a complaint with the FTC online here. You can also submit a complaint by calling the FTC toll-free at 1-877-382-4357 (voice) or 1-866-653-4261 (TTY), or writing to:
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580.
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