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The Outrageous Ways Your Phone Company May Be Stealing from You

A growing number of scams are being perpetrated on telephone and Internet customers. Think you can easily identify bogus charges on your bill? Good luck.

Cramming, slamming and ramming are three of a growing number of scams being perpetrated on unaware telephone, wireless and Internet customers.

In simplest terms, the major scams are defined as follows:

  • Cramming is the illegal practice of placing unauthorized charges on your local, long-distance or wireless telephone bill, usually by a third party not known to the customer.
  • Slamming is the illegal practice of switching a telephone customer’s long-distance service provider to another carrier without the customer’s permission.

These scams have been around for years but continue to be replayed on unwitting telephone customers. However, the newest scam, ramming, adds a new dimension to the game:

  • Ramming is the illegal practice by which a phone company‘s customer is put on a service plan or package s/he did not need or want or cannot even use. It includes the “gimme” when the advertised price is 20-50 percent less than what a customer is actually charged.

An estimated 80 percent of phone company customers have been overcharged or are on plans they did not need or even order. These and other scams can cost residential customers $20 or more a month extra and small business customers up to thousands of dollars a month.

Can you easily identify these charges on your phone bill? Good luck. Your bill is designed to be unreadable and most people just pay the total charge and go on with their lives. Is there any better way to rip off consumers?

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Cramming has been getting some attention recently. Early in January 2011, the attorney general of Minnesota, Lori Swanson, sued a Pennsylvania company, Cheap2Dial Telephone LLC, for illegally billing more than 2,500 Minnesota consumers since 2008 for long-distance services they didn't authorize or use. According to Swanson, a monthly charge of about $17 went mostly unnoticed on phone bills of these people. For three years, the scam totaled more than $1.5 million.

Last September, Willoughby Farr, of West Palm Beach, FL, received a 21-year federal prison sentence for cramming. From April 2003 to December 2005, while Farr was incarcerated in the West Palm Beach County Jail he used three West Palm Beach companies -- Nationwide Connections Inc., Access One Communications Inc., and Connect One Communications Inc. -- to defraud telephone customers of approximately $35 million in collect calls. Because the charges typically appeared on the last page of consumers’ telephone bills, people automatically paid the charges.

The charges often involve such non-basic services as voice mail, a one-time charge for entertainment services, or a non-recurring monthly charge.

Cramming has long attracted scam artists. In 2004, two alleged Gambino crime-family members were busted for running a cramming scheme that ripped-off phone customers for an estimated $200 million through bogus charges. The scam suckered consumers responding to ads offering free trials for dating services, adult chat lines and psychic consultants. Once the respondent’s name and number were captured, they were charged as much as $40 a month on their phone bills for services they didn't order and never used; the charges were billed under innocuous terms like "voice mail."

“Modem hijacking” is a variation on cramming. It takes place when software, typically delivered via a pop-up ad or free screensaver, is downloaded onto a computer via an Internet connection, and uses connecting software to illegally reroute the computer connection to a different service provider. However, online fees associated with the new connection are often far more expensive.

Slamming, the practice of switching a telephone customer’s long-distance service provider to another carrier without the customer’s permission, has also attracted sophisticated scam artists. While the Federal Communications Committee (FCC) and state regulators have helped curb the practice, it still persists.

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