What Is Phonebill Cramming
"Cramming" used to be what you did the night before a big test. Now the word has a more sinister meaning like placing unauthorized charges on your telephone bill.
"I have a phone bill that says Voicemail Monthly fee $12.95. I want to know what that is for and if it's not suppose to be on there, I want it off my phone bill," said Deborah of Johnson City, Tennessee, one of hundreds of consumers who have written to ConsumerAffairs.com to complain about mysterious, unauthorized charges appearing on their telephone bills.
"I got my phone bill and ILD charged me $30.88 for some kind of internet service that I never authorized," said Christie, of Connel, Washington. "When I called them, I was kept on hold for over 30 minutes and have not been able to dispute these charges."
Of all the cramming complaints received at ConsumerAffairs.com, nearly 800 are about ILD TeleServices, whose name and telephone number appear next to the unauthorized charge on their phone bills -- and the number of complaints is steadily rising, with 80 filed in just the last three months.
ILD TeleServices claims that it is merely a billing "clearinghouse," meaning it is collecting the money on behalf of other companies some legitimate and some, perhaps, not who deliver their services through your local phone company.
If it all sounds confusing, you can blame the Telecommunications Act of 1996. That piece of landmark (others might suggest a different adjective) legislation changed the telecommunications landscape not entirely for the better, at least not for consumers. Fortunately, there are some little-publicized provisions that give consumers an effective way to fight back.
In deregulating the local telephone markets, the new law required big telephone companies like SBC Communications and Verizon to lease their lines to smaller companies and to bill their customers on behalf of companies providing such deregulated services as pay phones, collect calls and long-distance calls from public places, like hotels, hospitals, airports and prisons.
The purpose was to open local phone markets to competition and create more services at less cost to the consumer. But an unintended consequence has been an outbreak of profiteering by companies eager to fleece captive or unsuspected consumers.
Many of the new entrants are companies that attempt to bill unsuspecting consumers for things they never asked for -- like voice mail -- hoping they will not look that closely at their monthly phone bill and just pay it.
Other shameless profiteers are the hotels, hospitals, universities and prisons that add outrageously expensive charges for the use of their telephone equipment.
With so many layers in the billing process, the system has been open to abuse from the start. The company placing the charge does not bill the consumer directly. Instead, the charge is billed by a "clearinghouse," like ILD, which in turn contracts with your local phone company to place the charge on your bill.
The local telephone company makes nothing but a small administrative fee and has little choice in the matter; it is required to provide billing for these supposedly "competitive" entities.
In the case of ILD, the company says it executes hundreds of thousands of bills each month for a wide variety of companies, and that only a tiny fraction of the charges produce complaints. Company officials say they work with complaining consumers to resolve disputes, and that if one of its clients produces a large number of complaints, it is dropped.
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