The Federal Trade Commission has halted an operation that’s fraudulently taken millions of dollars from consumers by placing bogus charges on their phone bills, the agency reported on Thursday.

Inc21 has been ordered by a U.S. District court to pay back almost $38 million to consumers as a result of the FTC’s effort to halt this huge scam. The FTC alleged that Inc21 hired offshore telemarketers to call prospective clients to sell Web-based services. The company then used local exchange telephone companies, or LECs, to place charges for those services - typically in amounts between $12.95 to $39.95 - on the phone bills of consumers and businesses.

Many of the fraudulently billed victims declined the telemarketers’ offer of services altogether and were still charged for services. Others were told that the sales call was only to verify business information, or that they would receive a free trial offer - but not told they would be charged if they didn’t cancel.

“The FTC has produced overwhelming evidence that defendants’ practice of billing tens of thousands of businesses and consumers via their telephone bills – a fraud-friendly practice called ‘LEC billing’– was both deceptive and unfair,” U.S. District Court Judge William Alsup stated.

Judge Alsup said the most compelling proof of the violations: a comprehensive expert survey that revealed 97% of 1,087 of Inc21’s so-called ‘customers’ did not agree to purchase the defendants’ products. “Even more egregious, only five percent of them were even aware that they had been billed,” Judge Alsup said.

“Indeed, over a five-year span from 2004 through 2009, defendants successfully extracted over $37 million in unauthorized payments from the telephone bills of unsuspecting businesses and consumers,” the judge wrote.

“In short, the record contains mountains of undisputed evidence showing fraud at every step of defendants’ telemarketing process,” Judge Alsup wrote in his statement.

In addition to the order of paying the consumer restitution, the court has also barred Inc21 from placing charges on consumers’ phone bills and telemarketing without prior approval from the court.

This story serves as a reminder for all consumers to be vigilant in checking all their billing statements each and every month. Crooks are keeping busy - always coming up with another scheme or putting a new twist on an old scheme to try to steal our hard-earned money. Any phone call, email, or piece of mail should be thoroughly scrutinized before we give out any of our personal information.

And never trust that somebody who contacts you out of the blue is really who they say they are. Thieves and liars have no qualms about making up a convincing reason to get access to your cash. They are always coming up with new ideas to prey on hard-working citizens, and it’s up to us to put a stop to it.

The Federal Trade Commission is the nation’s consumer protection agency against fraudulent, deceptive, and unfair businesses. It is up to the consumer to report suspected abuse. You can use the FTC’s Complaint Assistant or call their toll-free number at 1-877-FTC-HELP.


Source:
Federal Trade Commission