A phone billing company will pay $5.2 million to resolve Federal Trade Commission charges that it violated a court order that settled earlier charges of phone bill cramming by the FTC.
The proposed settlement agreement resolves FTC contempt charges that the Billing Services Group defendants violated a 1999 settlement order with the agency that prohibited them from unauthorized billing, misrepresentations to consumers and billing for vendors that fail to clearly disclose the terms of their services.
For years, the Billing Services Group defendants operated as a phone billing aggregator, passing charges from third parties to telephone companies for placement on consumers’ telephone bills.
Under the settlement announced Wednesday, the Billing Services Group defendants admit that they violated the 1999 order by permitting unauthorized billing.
The Billing Services Group defendants further admit that they failed to vet charges before processing them and that they did not investigate consumer complaints about unauthorized charges.
The Billing Services Group defendants are banned under the order from placing charges on consumers' phone bills for enhanced services such as email or voicemail, and prohibited from placing unauthorized charges on any type of consumer bill. In the defendants’ current business, which involves providing wireless intermediary services to telephone companies and Wi-Fi providers, the order will require them to monitor their servers' traffic for possible fraud.
The proposed order imposes a $5.2 million judgment, to be paid in 10 payments every 90 days. If the defendants fail to make a payment, the court will impose a judgment of $17 million.