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Crackdown on phone bill 'cramming' falls short

It's too easy for people to get stuck with unauthorized charges, so the state PUC has ordered companies like AT&T and Verizon to ensure that third-party billings are legit. That's fine, but other safeguards are necessary.

October 29, 2010|David Lazarus

State regulators voted Thursday to crack down on unauthorized charges appearing on people's phone bills, a practice known in telecom circles as "cramming."

For the first time, service providers like AT&T and Verizon will be responsible for investigating companies that add charges to bills and ensuring that the charges are legit. The phone companies themselves will also be responsible for refunding all unauthorized charges.

"Too often, the phone companies have allowed scammers access to unwitting consumers," said Mark Toney, executive director of the Utility Reform Network, an advocacy group. "Phony voice-mail services are a common one."

Hancock Park resident Peter Lee can attest to that. He recently noticed a pair of monthly charges for $8.23 each on his AT&T bill. Calling the number associated with the charges, he discovered that he'd been signed up for something called InfoBilling, a voice-mail service he never ordered.

His experience illustrates the ease with which consumers can get saddled with unexpected charges — and the need for regulations that go even further than Thursday's action by the California Public Utilities Commission.

When Lee investigated what happened, he was told that InfoBilling's customer service was being handled by another company, MyService and Support. The MyService rep said that even though the voice-mail account was registered to Lee's AT&T number, it was in someone else's name.

The rep said she would close down the account and credit Lee for the two months' charges.

Curious about how his phone number had become linked to some voice-mail thing he'd never heard of, Lee went to InfoBilling.com and discovered how easy it is to stick someone with the bill.

Apparently all you have to do is list someone's phone number on the sign-up form and — voila — the monthly fees go there. "It's really easy to do," Lee, 54, told me.

He called InfoBilling a "shoddy scam."

According to the Better Business Bureau, both InfoBilling and MyService are in fact one and the same company. InfoBilling is just one of a number of aliases that MyService uses to hawk its voice-mail service.

The bureau gives MyService a grade of D-minus because it received 168 complaints about the company during the last three years, mostly involving billing issues.

According to their websites, Both InfoBilling and MyService share the same Minneapolis post office box.

As an indication of the lengths that MyService has gone to in duping the unwary, the company's site includes testimonials from two satisfied customers. One is identified as Melvin Reed, marketing director for a business called YourBilling Solutions.

"They really have made our business relationship feel like a partnership," he says of MyService. "I can't say enough about the level of service we have received."

The other testimonial is from Dawn Daniels, identified as president of a company called MyBilling Services.

"MyService and Support did a great job in performing their task," she declares. "They brought a lot of opportunities to our business."

The websites for both YourBilling Solutions and MyBilling Services offer a voice-mail service identical to InfoBilling's. Both also share the same phone number, along with MyService's post office box.

Moreover, the photo of Dawn Daniels from MyService's testimonial appears in a brochure that can be downloaded from MyService's site. In the brochure, though, she isn't the president of a company. She's apparently a professional model.

The MyService website was registered by a Paul Monette. The social-networking site LinkedIn identifies Monette as MyService's vice president of sales and marketing.

He's also listed in public records as the registrant for the websites of InfoBilling, YourBilling Solutions and MyBilling Services.

Reached at a Minneapolis phone number, Monette told me he couldn't comment about InfoBilling, except to say that the company is unrelated to MyService and Support.

When I pointed out that the two companies share the same post office box, he hung up.

The Minnesota secretary of state's office says Myserviceandsupport Inc. is a foreign entity. The company's website says it also has offices in the Philippines.

I reached a service rep at MyService and asked to speak with either Reed or Daniels, the executives from the testimonials. The rep said no one by those names worked at the company. She confirmed that the various voice-mail providers were all in fact operated by MyService.

I asked about the sign-up process. I pointed out that if I entered the phone number of someone else, that person could be charged for my voice mail.

"That's possible," the rep acknowledged. "But you could just call us and cancel the service."

In the past, phone companies would take action against crammers only after a customer had lodged a complaint. By that time, months of unexpected charges may have been racked up.

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