Beware crammers, slammers Dozens complain to PSC of odd charges on telephone bills


May 24, 1998|By Mark Ribbing | Mark Ribbing,SUN STAFF

If your phone bill includes charges from some company you've never heard of, you're not alone.

Such charges have become increasing common in the deregulated world of telecommunications, where an array of small, obscure companies has sprung up to sell phone service.

While the proliferation has created new choices for consumers, it has also caused headaches as households and businesses have spotted the names of unfamiliar companies on their multipage bills. In addition, some firms have sought to enrich themselves by switching customers to their services without permission (a process known as "slamming") and charging for unwanted new features ("cramming").

"The commission has encouraged competition. Ultimately, it's driven prices down," said Robert Spangler, deputy chief of enforcement for the Federal Communications Commission. "The

dark side, so to speak, is there are companies that have gotten into this business that show disdain for the rules and fair play."

State and federal regulators say complaints about such practices are increasing. Maryland's Public Service Commission has received 115 slamming complaints and 141 cramming complaints so far this year, according to commission spokeswoman Chrys Wilson.

Wilson said many of these complaints are against firms like Integretel Inc. and U.S. Billing Inc., companies that provide billing services for long-distance companies or for so-called "information services" like psychic hot-lines.

Among those who filed complaints is Howard Schloss, a vice president for The Indusco Group, a hardware wholesaler near Camden Yards. Beginning in the summer of 1995, Schloss' Bell Atlantic residential phone bill frequently included charges from companies he had never heard of, such as U.S. Billing and Integretel. By July 1996, these charges amounted to nearly $200.

Schloss discovered he had been switched to a new long-distance service without his permission and charged for a calling card he had never ordered. He refused to pay, and complained to Bell Atlantic and the PSC.

By August, the charges arising from the slamming incident were finally cleared from Schloss' bill. However, his troubles were not over. Last October, Integretel billed him $42.44 for "full access" service ordered from Capital United Inc. Schloss insisted he never ordered the service, and doesn't even know what it is.

Capital United, a 2-year-old Kentwood, Mich., firm with 10 employees, provides voice mail service and bills through Integretel. Though Schloss' charges were dropped, the company's New York-based lawyer, Joel Dichter, insisted that Capital does not bill for unordered service.

"Basically, no bill is rendered unless a call has been placed from the residence (and) there's an affirmative agreement by the customer to incur the charges," he said.

The Integretel charges stopped in January, but another billing firm, U.S. Billing, then began charging Schloss on behalf of Consumer Access, a phone calling-card service based in Houston.

Consumer Access got Schloss' name when his 10-year-old daughter sent in a sweepstakes entry form emblazoned with the message, "Win $25,000 cash or a new car." Below the signature line was the somewhat less prominent notice: "By signing, I am both entering your contest and requesting a calling card."

Consumer Access eventually agreed to cancel the calling card, but such disputes have been a recurrent annoyance for Schloss. "It means calling the phone company every month," he said. "It goes on and on and on."

Integretel spokeswoman Linda Uribe said her company simply responds to service orders, and that it's up to the customer to make sure that no one is using his or her account without authorization.

"We cannot bill for charges that did not take place," she said. "We don't have any control over who has access to an end-user's phone."

Integretel, a private firm based in San Jose, Calif., with about 200 employees, is one of the more prominent billing services. It bills for 8 million calls per month, handling accounts for more than 1,400 companies.

Billing services like Integretel are the product of huge changes roiling the phone industry. Increases in phone network capacity and a free-wheeling regulatory atmosphere have opened up long-distance, once the province of titans like AT&T, MCI and Sprint to a host of small players. These newcomers simply buy network capacity from a wholesaler and slap their names on it.

To get around the potentially huge expense of contracting with each of the Baby Bells to get their charges on customers' phone bills, these upstarts sign up with billing services, also known as -- aggregators. These aggregators pay local phone companies to give the small companies a spot on their bills.

In the case of Bell Atlantic Corp., which issues the phone bills for the vast majority of Marylanders, an aggregator pays an implementation charge to set up the billing arrangement plus a fee for each bill processed.

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