A government tax on “consumption” that isn’t there?

Much as I hate being distracted from important issues of the day, it so happens that today is my bill-paying day, which means I have to devote a moderate amount of time to opening bills, tearing off the payment slips, writing checks for the amounts on the slips (with account numbers written on all the checks), then put all that in envelopes, stamp them, and put them in the mail.

This almost never takes more than a half an hour, except this morning I happened to notice that my AT&T phone bill seemed higher than it should have been. Looking more closely, I saw a charge in the amount of 12.95 for “ID LIFE GUARDS-CREDIT PROTECT/REPAIR” listed on an enclosed bill from a company called “ILD Teleservices.” I never did, and never would, order such a “service,” so I was very suspicious, and promptly Googled the company. 

It turns out to be a huge scam — called “Cramming,” and countless people are complaining about it.

According to the National Association of Attorneys General, cramming was the 4th most common consumer complaint of 2007[4].  

If a scam like that has been around that long, why isn’t anything being done to stop the scammers? And why is AT&T enabling them, then telling people that they have no choice?

Flawed System

AT&T allows ANYBODY to claim that you signed up for their services, through ILD, even though you did not. Then AT&T charges you for whatever amount the thieving “merchant” says you owe.

Cramming
Cramming is the practice of placing fraudulent, unauthorized charges on your phone bill, which you did not order, and you do not want.

ILD Teleservices – Fraud Enablers
ILD Teleservices (International Long Distance Teleservices) placed a phony charge of $15.95 on my April phone bill.
When I called, “Alma” insisted that I had “Signed Up Online” for a service called “Family Contact”. I never did any such thing. This witch continued to insist that I had signed up for the service. In spite of the fact that all she does every day is listen to these complaints. A little disingenuous maybe? How about BOLD FACED LIAR! She knows damn well what is going on.

Thousands of Victims
Most people just pay, because they assume that it is a legitimate change. It is not. It is telecom FRAUD, pure and simple.
This is happening to 1000’s of AT&T phone customers. You must watch your bill like a hawk, and contest any phony charges. ILD is depending on the fact that many AT&T customers will not notice.

The Complaints Against ILD
How many online complaints are there? You tell me –
ILD Teleservices Complaints – Google says 9,120
ILD Teleservices Complaints – Yahoo says 3,690
ILD Teleservices Complaints – Bing says 2,120

Etc. There are so many consumer complaints (and websites screaming about this rampant corporate fraud) that I got tired of reading them. Here are a couple of good posts on the subject, and a helpful site with tips on how best to avoid the problem. There’s even a pissed-off-ILD-Services-consumer website.

It’s analogous to automated credit card billing (and I suspect that AT&T wanted to get a piece of the automated turf action and charges fees to companies like ILD), but the difference is that it’s much harder for a scammer to get hold of credit card numbers than phone numbers. And as is explained here, any scammer can have anyone just call in and say your number is theirs. No verification is done.

But wait. If I am a victim of such absolute fraud based on a false claim I ordered something I never did, how can I be said to be a “consumer”? Doesn’t being a consumer require, like, actually buying or wanting to buy something? I have no consumer relationship with this scamming company other than the fact that they managed to sneak an unauthorized item onto my phone bill. It’s no diffferent than if some thief got hold of my credit card numbers and generated charges for things I never ordered or received. How could I be called a “consumer” when I neither consumed nor expressed an interest in consuming?

A conscientious Bay Area television station did an investigative report on Cramming, and there’s a YouTube video showing an older woman complaining about the bogus charges.

 

The first thing that went through my mind when I saw my bill was that while it’s relatively easy for me to spot fraud, there are a lot of less sophisticated people (or elderly people who tend to do as they are told) who might see an itemized charge for “ILD Services” and assume that it’s just “part of the phone company bill” and they should simply pay it.

While it galls me to see a big company like AT&T working in connivance with scam artists and then hiding behind the government by saying they have no choice, seeing such blatant ducking of responsibilities by government officials from the Public Utilities Commission — which is charged with policing large utilities and headquarted in the very left-wing city of San Francisco — had me puzzled at first. So did the bafflement expressed by the investigative reporters. 

Why indeed would the government drag its feet?

A closer look at my bill revealed a possible reason.

ATTILD.jpg

Just below the fraudulent $12.95 charge is an item called “Government Fees and Taxes.” The amount the government receives is .97. Now, I know that ninety seven cents isn’t enough to upset most people. After all, it is conveniently less than a dollar and most people wouldn’t begrudge the government such a piddling sum. But still, I’m thinking that if the government gets a dollar a month from every one of these automated corporate scams, a dollar here and a dollar there spread out over millions of consumers might add up to real money. Might that account for government foot dragging?

Bad as it is to have AT&T enable fraud, I think there is something even worse about the government benefiting from from what amounts to a fraud tax.

And because this fraud is a crime, this amounts to a crime victim tax. Sorry, but even though it’s only ninety seven cents, the idea that the government is taxing people for being victims of crime simply adds insult to injury. Imagine if the government taxed people on the value of items stolen from them by burglars.

People really ought to be howling over this. Trouble is, they already are, yet the practice is “mysteriously” allowed to continue.

So, while I can’t prove it, I strongly suspect the fact that this fraud is generating tax revenues might help explain the “mystery.”


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9 responses to “A government tax on “consumption” that isn’t there?”

  1. M. Simon Avatar

    What happens when people get upset enough about this so that they stop paying taxes?
    The system is going down. All over the world.

  2. physics geek Avatar

    It will be a cold day in Hell before I pay for a fake service that I never signed up before.

  3. Edward Lunny Avatar
    Edward Lunny

    It isn’t just AT&T, it happens with Verizon as well. And, trying to get any of these people on the phone can be an exercise in frustration. That the phone company allows this is especially disturbing. That said, Verizon offers a feature to block any changes to your phone service, if you ask for it. Perhaps AT&T offers something similar.

  4. Kathy Kinsley Avatar
    Kathy Kinsley

    My phone company offers “a feature to block any changes to your phone service.” For a fee…

  5. GregS Avatar
    GregS

    It seems to me that if this happens to you, what you should do is to demand that the charge be reversed. And if the phone company is unwilling to do that, then cancel your phone service. There are other phone companies, and cell phones, and VOIP services like Skype, and if enough people start canceling their service over this issue, it will start to cost them enough money that they may do something about it.

  6. Jeff Avatar
    Jeff

    The wife and I long ago dumped our AT&T phones in favor of Virgin Mobile prepaid service. The bigs routinely employ billing fraud as an integral part of their business model, and it’s a mystery to me why no telco executives have ever gone to jail on federal RICO charges.

  7. M. Simon Avatar

    I just looked up how you beat this:
    Take them to small claims court and assert the damages are the maximum amount allowed in that court.
    What usually happens is that they will refund the charge plus some incentive money. With the incentive money running in the $100 to $200 range.

  8. M. Simon Avatar

    As a semi retired person I think my above comments sound like a business model. Heh.