Defendants Collected Millions For Collect Calls That Were Not Made
At the request of the Federal Trade Commission, a federal judge has
halted a massive fraudulent billing scheme that has collected more
than $25 million in bogus collect call charges from hundreds of
thousands of consumers. The FTC charged three companies and their
principals with deceptive and unfair billing practices for "cramming"
- the unauthorized billing of charges on phone bills - since at least
"Charging consumers for bogus collect calls is stealing," said Lydia
Parnes, Director of the FTC's Bureau of Consumer Protection." The
Federal Trade Commission will not tolerate crooks who cram
unauthorized charges onto phone bills."
The FTC's complaint alleges that, in many instances, the defendants
initiated phony collect call charges, such as calls to telephone lines
that were dedicated to computers and fax machines, and to phones where
no one was present. In addition, some consumers' caller ID logs had no
record of collect calls for which they were billed.
The FTC charged the defendants with violating Section 5 of the FTC Act
by representing that consumers owed money they did not owe, and by
causing consumers to be billed for collect phone calls they neither
received nor authorized. According to the FTC's complaint, the
defendants claimed that they submitted charges for billing on consumers'
bills on behalf of long distance service providers, although the defen-
dants have few, if any, long distance carriers as clients. The defendants'
charges typically were buried on the last page of consumers' phone bills,
with each charge typically in the range of $5 to $8.
On February 27, Senior Judge Kenneth Ryskamp ordered an ex parte tempo-
rary restraining order freezing the assets of Nationwide Communications
Inc., Access One Communications Inc., Network One Services Inc., and
their principals, Willoughby Farr, Mary Lou Farr, Yaret Garcia, Erika
Riaboukha, and Qaadir Kaid. The order appointed a temporary receiver
over them and banned them from engaging in unauthorized billing.
On March 8, the court found that the defendants engaged in the
widespread unauthorized billing of collect calls in violation of
Section 5 of the FTC Act and entered a preliminary injunction order
prohibiting them from billing or submitting any charge for billing on
a consumer's telephone bill. The order continued the asset freeze over
them and appointed a permanent receiver over Nationwide Communications,
Access One Communications, Network One Services, and certain affiliated
entities. The FTC ultimately seeks to permanently bar the defendants
from further violations, make them forfeit their ill-gotten gains,
and make them pay restitution to consumers. The Commission approved
the filing of the complaint in U.S. District Court for the Southern
District of Florida by a 5-0 vote.
NOTE: The Commission authorizes the filing of a complaint when it has
'reason to believe' that the law has been or is being violated, and it
appears to the Commission that a proceeding is in the public interest.
The complaint is not a finding or ruling that the defendant has actually
violated the law. The case will be decided by the court.
Copies of the complaint are available from the FTC's Web site at
http://www.ftc.gov and from the FTC's Consumer Response Center, Room
130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC
works for the consumer to prevent fraudulent, deceptive, and unfair
business practices in the marketplace and to provide information on
150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357),
or use the complaint form at http://www.ftc.gov.
The FTC enters Internet, telemarketing, identity theft, and other
fraud-related complaints into Consumer Sentinel, a secure, online
database help consumers spot, stop, and avoid them. To file a
complaint in English or Spanish (bilingual counselors are available to
take complaints), or to get free information on any of available to
hundreds of civil and criminal law enforcement agencies in the
U.S. and abroad.
Office of Public Affairs
Federal Trade Commission
Office of Public Affairs
Laura M. Kim, Attorney
Division of Marketing Practices
Related Documents :
Federal Trade Commission, Plaintiff,
Nationwide Connections, Inc., Access One Communications,
Inc., Network One Services, Inc. Willoughby Farr, Mary Lou Farr, Yaret
Garcia, Erika Riaboukha, Qaadir Kaid, Defendants; United States District
Court Southern District of Florida.
Civil Action No.: 06-80180; FTC File No.: 052 3141
[TELECOM Digest Editor's Note: While this report _is_ quite good news,
one pre-emptive strike everyone can take to assure this problem is at
a minimum is to ask your local telco (typically, they are the billing
agents for all telcos) to put a 'third party/collect block' on your
lines. All the legitimate telcos at least, such as Verizon, SBC, Bell
South, etc. share a common database of subscribers who do not want
_any_ 'third party billings/collect calls' on their line for any
reason at any time. When a caller does '00+' for example, and requests
permission to bill a call to your line, or if you are willing to
accept a 'collect call', this database is 'dipped' and the answer
given is 'no way, Jose' or words to that effect. The calling party is
then asked to provide an alternative way to bill for the call they
wish to make. Of course, you also want to tell your telco to put a
900/976 block on your line as well. Given that collect calls are _so_
expensive these days, and toll-free 800 calls are so cheap, I do
not know why anyone -- if they have some reason to accept calls that
they have to pay for -- would not go with an 800 number instead of
Telco does not absolutely guarentee that a 'collect call/third party
block' will work mainly since not all telcos -- at leest the sleazy
ones, subscribe to the database dip. But, if a call gets billed to
your number after you have instructed telco against same, they will
remove it. I've had that on my lines for years with success, and
although some telcos make a one time charge for being listed in the
negative database, they are _not permitted_ to charge if you want to
be listed in the 900/976 portion of the database. Bear in mind however
this can pose problems if you need to accept collect calls from a
correctional center. PAT]
Date: 15 Mar 2006 12:48:36 -0800
Subject: What Phone Company has Clearest Audio?
X-Telecom-Digest: Volume 25, Issue 106, Message 5 of 19
I have hearing loss and have recently purchased a corded phone from a
company called CLARITY (the quality is great). They make phones that
have digital amplification.
My question: I have AT&T/SBC phone service but not a long-distance
carrier. AT&T/SBC offers their own long-distance carrier for like $20
or something a month extra. I started shopping around for a cheaper
alternative and looked at VONAGE. In VONAGE's features list, they
claimed they had "Higher quality calls than landline in many cases".
Is this true? If so, how? The clearer the audio, the better. Is there
a better service than VONAGE that carry clear long-distance calls? At
this point I am not concerned of cost if it means I'll get better
Thanks for any advice on this matter.
[TELECOM Digest Editor's Note: For VOIP in general, including Vonage,
the answer is a qualified _yes_ and _no_. Maybe, and maybe not. If
you use a router, with various computers on line _and_ VOIP (Vonage or
whomever) then sometimes it gets tricky in 'throttling' the line in
such a way as to give all or most of your DSL/broadband capacity to
the VOIP device instead of your computers, which are fighting to get
their share (sometimes more than their share) of the highway. Basically,
IMO, the answer would be a qualified _yes_, Vonage (or the other VOIP
carrier of your choice) is pretty decent as long as you do not have a
bunch of jobs running on the computer at the same time. You do know,
of course, you have to have some broadband connection, either cable or
DSL or similar, and if either the cable/DSL line is out or the
electric power is down, your Vonage line is dead as well, unless you
have battery backup on it, which most people do not have.
Personally, I would keep a very slim package of LD on my basic line to
use as needed. Although I make all my LD/toll calls by dialing '8' for
the Vonage line on my PBX, I can, and grudgingly do dial '9' (regular
landline) as needed for LD sometimes. PAT]