Friday, March 27, 1998
By Jennifer Bresnahan
Capital News Service
LANSING-- Unless you're paying extra close attention to your phone bill, you could be the victim of phone scams that already could be costing you big bucks.
"Cramming" is happening to thousands of unsuspecting consumers across Michigan and nationwide. Phone services consumers never ordered are literally being "crammed" into their local telephone bills.
For example, Grand Rapids resident Mildred Davidson has experienced numerous types of fraud. The first, her long-distance service was changed without her permission in a fraudulent practice known as slamming.
"I opened my phone bill to find my total higher than usual," Davidson said. "I was shocked to see that the company I have used for long distance services for several years was changed without my permission."
The most common slamming ploy is the billing consolidation pitch.
Someone saying they are from a long-distance service or the local telephone company in that area places a call to a residence or business. Whoever answers the phone, whether he or she is the telephone account holder, is told it's possible to get all telephone carriers consolidated on one bill.
In some cases, the caller says it's now mandatory under FCC regulations or federal law for bills to be consolidated.
The person answering the phone says, "sounds good to me," not realizing that, in most cases, telephone services are usually consolidated on one bill already. In fact, the consumer is often assured this won't change anything regarding their service.
Davidson became a cramming victim only a few months after she had been slammed. Services she says she never ordered showed up on her local phone bill.
"When you receive eight pages in one envelope, you're not really very conscientious at all," Davidson said. "You thumb through all the pages, and the total amount looks right, and you write a check and drop it in the mailbox. Silly me."
In the case of her bill, the extra billing was listed as "miscellaneous charges, $6.99." Charges were crammed into her bill for several months until she finally caught on.
These charges, for services such as voice mail, paging and personal 800 numbers, are assessed by third parties and billed through local phone carriers.
Like slamming, cramming can happen by filling out a contest entry form, failing to respond to a sales pitch, or calling a 900 number. Crammers may simply pick a phone number out of the blue and place charges on a bill through a local telephone company, claiming the resident agreed to purchase the services.
"Cramming is one of the latest schemes consumers complain about to the League's National Fraud Information Center hotline," said Linda Golodner, president of the National Consumer League. "We're hearing from people about all kinds of mysterious phone charges suddenly popping up on bills."
Sometimes the company names listed on the bills in connection with these charges sound like they are services from local carriers. For instance, "Enhanced Services" is one often used. This makes it difficult for consumers to detect them.
Slamming was the No. 1 complaint in the state last year, according to the commission, and Michigan ranked fourth nationally in the number of complaints reported.
The National Consumers League lists cramming it as its fifth biggest complaint, just behind slamming.
Officials at the Michigan Public Service Commission say they get 15 to 20 calls a day from customers who discover such charges.
The volume of complaints is prompting concern among regulators, who say they want to stop cramming before it becomes as big a problem as slamming. Based on cramming reports the League has received, fraudulent charges range from $4.95 to $30 per month.
"It's not a lot of money and may not be noticed by the consumer at first, but charges can add up," Golodner said.
Several states, including Michigan, are declaring war on the gimmicks. People are asking local phone companies to make bills easier to read.
Sara Snyder, manager of media relations for Ameritech, said the phone company has seen an increase in complaints about unwanted charges. She said Ameritech investigates each complaint and will discontinue billing for a company if it's found to be levying fraudulent charges.
Ameritech also plans to simplify its phone bill later this year, Snyder said. The new bill will be itemized.
Ameritech already has brought legal action against several companies for slamming and cramming, Snyder said. She wouldn't name them.
According to Mary Jo Kunkle, a media and public relations specialist for the Michigan Public Service Commission, both slamming and cramming are not regulated practices in the state.
"We currently don't find the companies that engage in this practice. We advise consumers to contact their local telephone company if they feel they have fallen victim to these scams."
Here are some tips from the National Consumers League to avoid being a victim of cramming or slamming:
• Be careful when calling unfamiliar 800 or 900 numbers. Be especially wary of following instructions to "enter activation code numbers" or answering "yes" to questions that may unwittingly result in authorizing unwanted telephone services.
• Read fine print before filling out a contest form or coupon offer. You may be agreeing to new or additional phone services.
• Scrutinize each page of your phone bill carefully every month as soon as you receive the bill to make sure there aren't unauthorized charges. If you see something you're unsure about, call your local phone company and ask for an explanation.
• If you've been crammed or slammed, contact your local telephone company and the National Fraud Information Center (1-800-876-7060) to report the problem.
• Send a letter describing what happened and enclosing a copy of the bill to the Federal Communications Commission, Consumer Protection Branch, Mail Stop 1600A2, Washington, DC 20054.