FTC seeking $52.6M for alleged bogus phone charges

AP News
Posted: May 08, 2012 3:08 PM
FTC seeking $52.6M for alleged bogus phone charges

Federal regulators are seeking $52.6 million from a billing company that they accuse of adding unauthorized charges to consumers' phone bills.

The Federal Trade Commission announced Tuesday it has asked a federal court to issue a civil contempt ruling against Billing Services Group and order repayment.

The agency says Billing Services added charges for unauthorized services such as voicemail and streaming video to bills for about 1.2 million phone lines, a practice known as "cramming." It says the company acted on behalf of an individual it describes as a "serial phone crammer."

The FTC says the cramming occurred from 2006 through 2010 and added about $70 million in bogus charges to phone bills. It says San Antonio-based Billing Services violated a 1999 settlement with the agency that prohibited unauthorized billing.

Billing Services disputed the FTC's allegations. It said the agency's request to the court "represents an incomplete and inaccurate representation of the facts and leaps to false conclusions."

"The bottom line is that the FTC is trying to blame (Billing Services) for the acts of another party," the company said in a statement.

Billing Services is the biggest third-party billing company in the U.S. Billing companies act as middlemen between phone companies and third-party vendors selling services. They collect charges for the vendors' services for the phone companies.

The agency asked a federal court in San Antonio to order Billing Services to pay $52.6 million, which it said is the amount that the company billed consumers and failed to refund.

In a court filing, the agency said the company worked with a "crammer" named Cindy Landeen and her associates to bill consumers for the unauthorized services, which included three voicemail services, one streaming video service, two identify-theft protection services, two directory assistance services and one job skills training service.

The company "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," David Vladeck, director of the FTC's Bureau of Consumer Protection, said in a statement.

Billing Services said it was being unfairly blamed for the actions of Landeen's company, which was one of its clients

Landeen couldn't be reached for comment. A phone number listed in her name was disconnected.