Newspaper article THE JOURNAL RECORD

Small Businesses Hit by Cramming Scheme

Newspaper article THE JOURNAL RECORD

Small Businesses Hit by Cramming Scheme

Article excerpt

WASHINGTON -- As the owner of a small business, Lou Thomas thought he might be able to expand his optical company's reach by advertising on the Internet. So when a West Coast firm called and offered to set up his Web site for a free 30-day trial, Thomas gave it a shot.

Thirty-two days after the call, Thomas still hadn't received any of the promised materials about the site, but he did get a $29.95 charge on his phone bill from the company. He was told by the business that his one-month trial period had come to an end. Thomas eventually disputed the charges with his local phone carrier.

The Federal Trade Commission says thousands of small businesses have lost millions of dollars in the past two years because of similar scams and that Thomas' Eye to Eye Optical Service in Largo, Md., is just one of many who've had unauthorized charges "crammed" onto their phone bills. In the FTC's third annual report to Congress on fraud, released Thursday, the commission says cramming has become the fifth largest source of its consumer complaints in the past 18 months. Since October of 1997, the FTC has received 10,000 complaints about cramming. "Only a few years ago, most consumers would not have considered the possibility that they might be charged for anything beyond the transmission of telephone calls on their telephone bills," the report said. "Now, the injury caused by cramming has been a rude wake-up call for consumers and may undermine confidence in the integrity of the billing system." In three cases announced Thursday, the FTC said con artists preyed on small businesses to sneak in illegitimate charges on their phone bills. "These operations rely on the fact that small businesses, in particular, may not have the rigorous ordering, accounting and bookkeeping procedures that larger businesses have put in place," said Jodie Bernstein, director of the commission's bureau of consumer protection. The commission has filed cases against Wazzu Corp. of Fountain Valley, Calif. …

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