Cramming Archives | Citizens Utility Board

CUB saves consumer from $1,400 in charges from a bad electric/gas deal

Jennifer — Mon, 29 Oct 2018 16:07:58 +0000

Ruben H. of Chicago found out why his gas and electric bills were getting so high through his landlord: He had been enrolled with an alternative supplier, Direct Energy, since 2015. And he paid nearly twice what the utilities charge. He called ComEd and Peoples Gas, and then contacted Direct Energy. He stated he never authorized service from Direct Energy, but the supplier insisted the enrollment was valid and he was responsible for the charges. Ruben asked Direct Energy to play the recording showing that he in fact authorized service. A few things were way off. It wasn’t Ruben’s voice. The voice answering said yes to every question asked. Every question was in English…Ruben only speaks Spanish. Ruben asked Direct Energy what number the company had for him; it wasn’t his number. CUB’s Bilingual Consumer Rights Specialist Annie Warnock asked Direct Energy to investigate, arguing that Ruben should not have been responsible to pay for service he hadn’t requested or authorized. In March, Direct Energy cancelled the service, but Ruben also wanted compensation for the difference he had been paying. Upon further review, Direct Energy removed the charges, totaling $1,417.69!

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DEA uncovers scam that could net you a refund

Matt — Mon, 19 Sep 2016 21:40:47 +0000

AT&T has agreed to pay nearly $7.8 million to settle government allegations that the phone giant allowed scammers to charge some customers about $9 a month for a fake directory assistance service, uncovered in a sting from, of all places, the Drug Enforcement Agency. The settlement, announced by the Federal Communications Commission (FCC) in August, is the latest action against the “cramming” scam. Cramming is when a third party bills you for unauthorized charges. Scam artists take advantage of complex telecom bills to hide fraudulent charges–usually less than $10 a month–among the other legitimate fees you receive on a monthly basis. AT&T will issue refunds, totaling almost $7 million, to current and former customers who were charged the fee since 2012. AT&T also agreed to pay a $950,000 fine to the government. The company is working on a plan to distribute the refunds to customers who received the unauthorized third-party charges, according to an FCC statement. In the last five years, the FCC has taken more than 30 enforcement actions against phone carriers for cramming and unauthorized carrier switches. In this case, the FCC says AT&T received a fee from companies that added the charges to customer bills but never provided the services they promised. The DEA stumbled onto the scam while probing a drug-sales and money-laundering operation. The DEA discovered the scam while investigating two Cleveland-area companies, Discount Director, Inc. (DDI) and Enhanced Telecommunications Services (ETS) for drug-related crimes and money laundering. In the course of seizing drugs, cars, jewelry, gold and computers totaling close to $3.4 million from the companies’ associates, DEA investigators found financial documents related to a scheme to defraud telephone customers, according to an FCC release. “A phone bill should not be a tool for drug traffickers, money launderers, and other unscrupulous third parties to fleece American consumers,” said FCC Enforcement Bureau Chief Travis LeBlanc in a statement. “Today’s settlement ensures that AT&T customers who were charged for this sham service will get their money back and that all AT&T consumers will enjoy greater protections against unauthorized charges on their phone bills in the future.” Under the settlement, AT&T has agreed to cease billing for nearly all third-party products and services and it is required to obtain express consent from customers before allowing third-party charges on their phone bills. This isn’t the first time AT&T has been in hot water with the FCC. In 2014, the company agreed to pay $105 million in fines and refunds to current and former customers for unauthorized third-party subscriptions and premium text messaging services as part of a global cramming settlement with the FCC.

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The $105 million cramming settlement: what you need to know

Jim Chilsen — Wed, 15 Oct 2014 11:00:33 +0000

Last week, we brought you great news: Federal regulators, Illinois Attorney General Lisa Madigan, and her counterparts from across the nation have reached a $105 million settlement with AT&T to settle claims that its customers were hit with unauthorized third-party charges. It’s a scam called “cramming,” and we couldn’t be happier to hear that authorities are cracking down on the fraud. What does this mean for you? Read CUB’s frequently asked questions about the settlement, including what to do if you believe you deserve a refund and how to protect yourself from scammers. If you have more questions, call CUB at 1-800-669-5556.

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$105 million settlement another win against one nasty cellphone scam

Jim Chilsen — Thu, 09 Oct 2014 18:55:06 +0000

CUB’s consumer advocates were happy to read the headlines this morning: AT&T will pay $105 million to settle claims that its customers were hit with unauthorized third-party charges. Federal regulators, Illinois Attorney General Lisa Madigan, and the nation’s other attorneys general say its the largest settlement in history involving cramming–when charges from third-party companies are added to your bill for services you didn’t OK. The development once again shines a light on one of the industry’s uncomfortable truths: Cellphone carriers get a cut of mysterious third-party fees that show up on bills. In fact, the Federal Trade Commission (FTC) told USA Today that AT&T has kept at least 35 percent of third-party charges placed on cellphone bills. While not all third-party charges are unauthorized, questionable fees often are for things like ringtone subscriptions and premium text-messaging services like horoscopes and love tips. (One of our lawyers–and her mom–got hit with a $9.99 fee for love tips. We give her a hard time about that.) This is the latest in what has been a string of victories against cramming. Late last year, AT&T and other major mobile carriers agreed to ban questionable premium texting services from their bills. Out of the $105 million settlement, $80 million of it will be used to reimburse affected customers (the rest will go to pay state and federal penalties). If you’re an AT&T customer and you think you were crammed, visit the FTC website to submit a refund claim or call the settlement administrator at 877-819-9692 for more info. In addition to refunds, AT&T must: obtain customer consent before billing consumers for third-party charges; provide a full refund or credit to consumers who are billed for unauthorized third-party charges going forward; inform new customers about third-party charges and how they can be blocked; present third-party charges in a dedicated section of a bill, along with information about blocking such charges. Illinois has been a national leader in the fight against cramming. Back in 2012, the governor visited CUB to sign one of the nation’s toughest laws against the scam, basically outlawing cramming on landline bills. Then, CUB launched a statewide campaign to warn consumers that cramming was on the rise on wireless bills. We’re turning the tide against this scam, but please make sure to read our fact sheet to protect yourself–and, of course, always read your bills!

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The ‘un-carrier’ under fire over the cellphone industry’s uncomfortable truth

Jim Chilsen — Wed, 02 Jul 2014 21:22:54 +0000

A federal lawsuit accusing T-Mobile of profiting off a scam called “cramming” shines a spotlight on an uncomfortable truth in the cellphone industry: Wireless companies can make lots of money off of so-called third-party charges–even when they’re fraudulent. Cramming is when third-party companies throw charges on your bill for services you didn’t authorize. Often these are “premium texting services,” such as horoscopes for up to $9.99 a month. (The horoscope service can make at least one accurate prediction: Higher bills!) Consumer advocates say “cramming” costs victims up to $887 million a year. On Tuesday, the Federal Trade Commission (FTC) filed a federal lawsuit accusing T-Mobile, the self-proclaimed “un-carrier,” of essentially turning a blind eye to the scam and raking in hundreds of millions of dollars from these fraudulent third-party fees. (See CUB talk about it on Fox Chicago.) Regulators estimate that T-Mobile kept as much as 40 percent of the bogus charges. CUB has long called upon the phone industry to do more to combat cramming. The fact that companies can get a cut of the money raises questions about their motivation to really tackle this problem. In-your-face T-Mobile CEO John Legere called the lawsuit “without merit,” and wondered why the FTC would pick on his “most pro-consumer company” and not “the real bad actors.” As usual, there’s another side to that story: The FTC says it had tried for months to negotiate with T-Mobile to secure refunds for cramming victims, without success. CUB and Validas have warned Illinois that cramming is a growing problem in Illinois. So scan your bills for suspicious charges and follow these tips: *Register your cellphone number with the Do Not Call list, at www.DoNotCall.gov. *Beware of online contests or “free” offers that require filling out a form or giving your wireless number. *Ask your carrier if it offers free fraud protections, such as blocks on texts and data. *Beware of questionable texts. The website www.SMSwatchdog.com can help you identify fraudulent messages. If you spot a suspicious charge, first call the cramming company to dispute the charge (see if the company’s number is on the bill). Then call the cellphone company. Inform it that you’re disputing the charge and you’re only paying the undisputed part of your bill. Make sure you agree what that undisputed amount is, and record the time of the call and the full name of the person you talk to. Finally, file a complaint with the office of Illinois Attorney General Lisa Madigan. (Visit www.illinoisattorneygeneral.gov, or call 1-800-386-5438, for Northern Illinois; 1-800-243-0618, for Central Illinois; or 1-800-243-0607, for Southern Illinois.) Keep one copy of the complaint for yourself and send the other to the cramming company.

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Giving Tuesday: For CUB, ALL the battles are big

Jim Chilsen — Tue, 03 Dec 2013 20:13:37 +0000

In honor of “Giving Tuesday”–the national day to support nonprofits–CUB has created this nifty Holiday eCard, with the CFL candle theme, pictured here. It allows people to honor friends and family this Holiday season–and support CUB’s fight for lower utility bills. That fight made headlines this year, as we helped to win some $300 million in rate cuts and refunds. But that’s not the only good work we do. CUB’s consumer advocacy team tackles about 10,000 calls, emails and letters a year, and we get people out of some terrible jams. For example, CUB… Helped Marquis get his electric service restored when no one else could. “A million ‘thank yous’ are not enough!” said Marquis, who needed the electricity to power vital medical equipment. Helped a Realty company erase an erroneous $1,100 gas bill, after the company had tried to do the same, with no luck, for more than a month. Helped Mrs. Jones who for years had been wrongly billed for somebody else’s electricity usage. (Yep, that happens!) CUB helped increase the refund ComEd gave her by $4,500! Helped Elaine get her heat turned back on after a mix-up with the gas-bill assistance she was owed. “You never know when you will hit rock bottom like me,” said Elaine, who has had to undergo expensive treatments for cancer and asthma. “So when someone helps you, you have to take the time to say ‘Thank You!’” So on “Giving Tuesday,” think of Elaine, and Marquis, and Mrs. Jones and the $300 million in higher rates we helped block, and send someone special a CUB Holiday eCard. The gift of a CUB membership makes a difference!

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A gut punch to cellphone scam artists

Jim Chilsen — Mon, 25 Nov 2013 11:15:46 +0000

We hope this is the beginning of the end for the insidious “cramming” scam. The nation’s big four cellphone companies are voluntarily banning most premium texting services from their bills–charges that have been a major culprit in the scam. The agreement was pushed by 45 state attorneys general, including Illinois’ own Attorney General Lisa Madigan. It involves AT&T, Sprint and T-Mobile. Oddly, the nation’s biggest carrier, Verizon, did not sign on to the agreement. The company said it planned to drop such texting services from its bills anyway–but if that’s the case it begs the question: Why didn’t Verizon just join the agreement? Cramming is a particularly nasty scam involving shady, third-party companies that “cram” charges on your bill for services that you never ordered or used. A National Consumers League (NCL) analysis this year estimated that wireless cramming costs consumers $887 million a year. In Illinois, CUB sounded the alarm about the scam a year ago when it and wireless research firm Validas said the number of potentially fraudulent fees on bills had nearly doubled over the past year. Crammers try to hide relatively small third-party charges–they averaged $3.76 a month in the CUB/Validas analysis–among the forest of fees we see on our monthly cellphone bills. Attorney General Madigan’s office said commercial premium texting services, formally called “Premium Short Messaging Services (PSMS),” account for the “overwhelming majority” of cramming complaints reported in Illinois. (Note: The agreement still allows premium texting for charitable causes.) Such “premium” services include celebrity gossip items and horoscopes. One of CUB’s lawyers went months before discovering that she was paying $9.99 a month for “Lovegenie tips.” (We give her a hard time about that one!) This is a major victory, but there’s more work to be done. The NCL–which CUB has partnered with to call for better cramming safeguards–said better regulation is still necessary to give the agreement between the AGs and the wireless companies the force of law, and to protect customers with other companies.

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From the CUB files: Top 5 worst consumer horror stories

Jim Chilsen — Thu, 31 Oct 2013 13:44:30 +0000

As CUB approaches its 30th anniversary, we’ve compiled a list of some of the worst consumer horror stories we’ve ever heard. What better way to celebrate Halloween? 1) The phone plan that ate my bank account! It sounds like the title of a 1950s creature feature, but, unfortunately, it’s reality for a lot of people paying too much for too many calls (and in the iPhone age too much data). The most chilling cases: A woman who came to a CUB phone clinic in Gage Park was overpaying by $1,200 a year. In Vernon Hills, another caller was wasting $1,500 a year, mostly because of expensive calls to the Ukraine. (She could save money with a calling card.) 2) “The Evil Within.” That’s a hot, yet-to-be-released horror video game, but it also describes the devilish—and unnecessary—charges we’ve exorcised from bills over the years. There’s the tale of the kidney transplant patient who was about to get her phone disconnected for $3,365 worth of calls she never made to Antigua. (Many calls were made in the wee hours of the morning—and she said she could barely make it past the 10 o’clock news!) Then there’s the happily married mom who for months unknowingly paid for a “love genie” dating tips texting service on her cellphone bill. 3) Service from hell. When you ask the phone company to install service, you don’t expect it to take away your heat. But that’s exactly what a Chicago mom said in a complaint to CUB in 2000. Unfortunately, the technician unhooked a thermostat and installed a phone there instead. The mom spent months trying to get the company to pay for repairs. (Honorable mentions: The tech who used a customer’s basement phone to make 1-900 calls, and the rogue cable and gas workers who called two customers derogatory names–think male anatomy, female dog–on official company correspondence. That’s scary!) 4) When a stranger calls. Remember that creepy 1979 movie (with a 2006 remake) about the poor babysitter harassed by fiendish phone calls? The electric and gas markets feel a bit like that these days—with some alternative suppliers making outrageous claims. A CUB attorney received one of these pitches and in the span of 10 minutes was told: 1) The state “recommended” she choose an alternative supplier; 2) if she didn’t choose a supplier, she would get a penalty on her bill; and 3) she would be protected from ComEd rate hikes. All monstrous lies! (Honorable mention: The electric peddler who said, “ComEd is about to leave Illinois, so you need to switch now.”) 5) The Michael Myers of bad deals. Like the infamous “Halloween” movie villain, some questionable deals just never go away. We recently found a woman paying for voicemail—even though she had an answering machine! AT&T’s Line-Backer also leaves a long trail of victims. CUB has had to break it to many people that they were paying a high price to cover repairs that happen only about once every 20-30 years. One guy lamented that he had no business paying for repairs he could do himself: “Well damn, I’m a licensed electrician, I can take care of that.” […]

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CUB’s Consumer Advocacy Team: Meet the CUB crew fighting for you!

Jim Chilsen — Mon, 07 Oct 2013 12:57:13 +0000

Each year, CUB’s Consumer Advocacy Department handles nearly 10,000 calls, emails and letters from Illinoisans with questions or complaints about utility service. The team has saved individuals thousands of dollars by identifying errors on electric, gas and phone bills. Consumer Advocacy Director Sandra Marcelin-Reme said a lot of problems stem from a lack of communication. “Unfortunately, we often find utility customer service representatives who don’t have proper knowledge of the rules, or don’t properly hear the customer out,” Sandra said. “Customers with individual problems get too many one-size-fits-all responses.” That’s why reading your bill is so important, said Annette Evans, a consumer rights associate. “If you understand your bill, you’re in a much better position to negotiate.” As Senior Consumer Rights Specialist Aimee Gendusa-English sees it, she’s “building an army of resistance” against unfairness and misinformation. The key to doing her job well is listening to consumers and asking the right questions. Add to that another rule of good consumer advocacy: Never end a conversation feeling nothing was accomplished. “I want them to know that I’m trying—I’m working hard for the consumer,” said Consumer Rights Associate Danielle Holmes. The job has its share of downs—like when nothing more can be done to help. However, when consumers write or call back to say their problems have been resolved, it makes up for the frustrations. “That’s the best,” said Ivonne Hernandez, bilingual consumer rights associate. “When the consumer calls and says ‘My account was credited.’” If you have a question, concern, or complaint about your utility service, call CUB’s Consumer Advocacy Team, at 1-800-669-5556.

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Kick “cramming” off our wireless bills!

Jim Chilsen — Mon, 10 Jun 2013 16:19:22 +0000

Fraudulent third-party charges could cost wireless customers up to $887 million a year. That’s according to a nationwide coalition of consumer advocates, including CUB, who are pushing federal regulators to adopt tough rules cracking down on the “cramming” scam. Cramming is when a third-party company places a charge on your phone bill for a service you never ordered or received. The charges are often hard to spot, and are designed to blend in with the many other fees listed on your bill. Online contests, surveys and spam text messages are just a few of the ways scammers phish for your information to gain access to your bill. Last year, CUB released an analysis showing that wireless cramming was on the rise in Illinois, with more than half of all third-party wireless charges likely fraudulent. So how do you protect yourself from cramming? • Scan your monthly bill carefully for suspicious charges. • Protect your cellphone number. Register it with the Do Not Call list, at www.DoNotCall.gov. • Beware of online contests or “free” offers that require filling out a form or giving your wireless number. • Ask your carrier if it offers free fraud protections, such as blocks on texts and data. • Beware of questionable texts. The website www.SMSwatchdog.com can help you identify fraudulent messages. Read CUB’s fact sheet on cramming for more tips.

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