FTC Seeks $52M in Refunds from Bogus Phone Bill ‘Cramming’

The Federal Trade Commission alleges that the nation’s largest third-party billing company made it possible for con artists to steal more than $70 million in bogus phone bill charges in a practice known as “cramming.”
The FTC is seeking a civil contempt ruling against Billing Services Group (BSG), alleging that the company placed changes on nearly 1.2 million telephones lines on behalf of a “serial crammer.”
The FTC alleges that BSG violated a previous court order. The agency said it is asking a federal court to make the company pay more than $52.6 million, the total amount that BSG billed consumers and failed to refund
The charges were supposedly for “enhanced services,” such as voicemail and streaming video, that consumers never authorized or even knew about, the FTC said.
“BSG made it possible for con artists to steal people’s hard-earned money by placing charges on phone bills for services they never ordered or used,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection. “Under previous federal court orders, BSG cannot profit from the fraud of others and then deny responsibility for the harm they made possible.”
The FTC alleges that by putting the bogus charges on consumers’ phone bills, BSG violated the terms of a 1999 settlement with the agency, which prohibits unauthorized billing, misrepresentations to consumers, and billing for vendors who fail to clearly disclose the terms of their services. The contempt action is the FTC’s fourth action addressing extensive cramming by BSG entities.
Billing aggregators act as intermediaries between third-party vendors and the local phone companies by contracting to have the local telephone companies collect charges for the vendors’ services from consumers.
“Cramming” is the placement of unauthorized charges on phone bills.

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