Third-party billers agree to settle phone bill 'cramming'
Published: Sunday, March 16
OAN, a third-party billing company that readers long have accused of cramming unauthorized charges on their phone bills, and two other companies agreed this week to pay $1.9 million for consumer redress in a settlement of unauthorized billing charges related to collect calls for Nationwide Connections Inc. And two related companies.
The Federal Trade Commission announced the settlement this week.
The FTC charged BSG Clearing Solutions North America LLC, ACI Billing Services Inc. D/b/a OAN, and Billing Concepts Inc. (collectively, "BSG") with placing charges on behalf of co-defendant Nationwide Connections Inc. We wrote about the Nationwide settlement last week.
The three related companies control more than 85 percent of the billing aggregation market, in which aggregators contract with local telephone companies to bill on behalf of third parties.
Of the three, readers in our region have reported the most complaints about OAN.
Willoughby Farr is the owner of the Nationwide companies, which used OAN and other billers to bilk consumers of more than $30 million in bogus collect call charges, according to the FTC.
The settlement amount from OAN and other third-party billers is a fraction of the amount billed and collected from consumers, the FTC said. A previous settlement, announced last week against Nationwide and Farr, contained a monetary judgment of $34.5 million. But the FTC said it is certain of collecting only about $475,000 in assets from Farr, in the form of three homes and luxury items.
Farr also agreed to a lifetime ban on telephone billing.
According to the FTC, the BSG companies began receiving complaints from consumers soon after the Nationwide billing began, including complaints about charges for calls made to telephone lines dedicated to computers and fax machines, and to phones where no one was present.
The settlement would prohibit the BSG group from misrepresenting that consumers are obligated to pay for telecommunications charges that have not been expressly authorized. It also would be barred from billing or submitting any telecommunications charges for billing on a consumer's telephone bill unless such charge has been expressly authorized.
BSG must take all necessary steps before billing on behalf of new clients and while billing for existing clients to ensure it does not engage in the unauthorized billing of telecommunications charges.
The settlement bars BSG from selling or renting consumers' personal information obtained from Nationwide, and requires BSG to create and maintain billing and consumer complaint records for eight years and submit various compliance reports to the FTC for five years.
The FTC's case against the Billing Resource d/b/a Integretel, another billing aggregator involved with Nationwide, and its cases against three remaining individual defendants are still pending.
Consumers who see unauthorized charges on their phone bills should call their local phone company and report the charges as fraudulent "cramming." Demand that the charges be removed from the phone bill.
Phone companies will generally remove them, and then it is up to the original biller to decide whether to try to collect on its own.
Most crammers do not continue billing, but if billing continues, report the unauthorized charges to the FTC online at www.ftc. Gov or by phone at 877-FTC-HELP.
Local phone companies must help consumers who report cramming by removing charges from phone bills and are not allowed to penalize consumers who do not pay disputed third-party charges under federal rules.
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