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FTC Seeks $52.6 Million for Alleged Phone-Bill 'Cramming'

Phone bill cramming
Phone bill cramming

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 Ltd. 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.

A company spokeswoman didn't immediately return a call seeking comment.

The FTC called Billing Services 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" 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.

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