Unauthorized Charges on Credit Cards

Unauthorized Charges on Credit Cards

The following explains unauthorized credit card charges.

• What should I do if there are unauthorized charges on my account?
• What is an unauthorized charge?

What should I do if there are unauthorized charges on my account?

It is best to notify the bank in writing about unauthorized charges. Notice may be given to the bank in writing or orally. The bank should have provided you with information on how to contact it in the case of loss or theft of the card. This information may also be on your account statement. This address may be different from where you send your payment. The bank will undertake a review of your claim and notify you of the results of their investigation. It is important to notify the bank promptly upon discovering unauthorized charges. [Note that if the charge was authorized, but you are disputing the amount of the charge or other billing error, the credit card company must receive your letter within 60 days of its sending you the first statement on which you noticed the error.]

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What is an unauthorized charge?

"Unauthorized use" is defined as the use of a credit card by a person, other than the card holder who does not have actual, implied, or apparent authority for such use, and from which the cardholder receives no benefit.
If the bank seeks to impose liability for the charge when a claim of unauthorized use is made by the cardholder, the bank must conduct a reasonable investigation of the claim.
Actions that a bank can take in reviewing a claim are:

• looking at the transaction in light of other purchases,
• reviewing if the goods were delivered to the residence or place of business,
• comparing signatures,
• requesting a police report,
• requesting documentation to assist in validating the claim,
• requesting a signed written statement from the cardholder or authorized user, and
• requesting information about the cardholder's knowledge of the person who allegedly used the card or of that person's authority to do so.

The bank will notify you of the results of their investigation.

CRAMMING

CRAMMING
Unauthorized, Misleading, or Deceptive Charges Placed on Your Telephone Bill
Background
"Cramming" is the practice of placing unauthorized, misleading, or deceptive charges on your telephone bill. Entities that fraudulently cram people appear to rely largely on confusing telephone bills in order to mislead consumers into paying for services that they did not authorize or receive.
In addition to providing local telephone service, local telephone companies often bill their customers for long distance and other services that other companies provide. When the local company, the long distance telephone company, or another type of service provider either accidentally or intentionally sends inaccurate billing data to be included on the consumer’s local telephone bill, cramming can occur.
Cramming also occurs when a local or long distance company or another type of service provider does not clearly or accurately describe all of the relevant charges to the consumer when marketing the service. Although the consumer did authorize the service, the charge is still considered "cramming" because the consumer was misled.
Cramming Charges: What They Look Like
Cramming comes in many forms and is often hard to detect unless you closely review your telephone bill. The following charges would be legitimate if a consumer had authorized them but, if unauthorized, these charges could constitute cramming:
Charges for services that are explained on a consumer’s telephone bill in general terms – such as "service fee," "service charge," "other fees," "voicemail," "mail server," "calling plan," "psychic," and "membership;"
Charges that are added to a consumer’s telephone bill every month without a clear explanation of the services provided – such as a "monthly fee" or "minimum monthly usage fee;" and
Other charges from a local or long distance company for a service that it provides but, like the other examples, could be cramming if unauthorized. While cramming charges typically appear on consumers’ local telephone bills, they may also be included with bills issued by long distance telephone companies and companies providing other types of services, including cellular telephone, digital telephone, beeper and pager services.
The FCC's Truth-in-Billing Rules
The Federal Communications Commission (FCC) has rules that require telephone companies to make their phone bills more consumer-friendly. These rules enable consumers to more easily determine, when reading their bills, what services have been provided, by whom, and the charges assessed for these services. Telephone companies must also list a toll-free number on their bills for customers with billing inquiries.
Such basic information empowers consumers to protect themselves from cramming and other types of telecommunications fraud. It also helps consumers make informed choices when they shop around to find the best telephone service to meet their needs.
How to Protect Yourself and Save Money
Carefully review your phone bill every month. Treat your telephone service like any other major consumer purchase or service. Review your monthly bills just as closely as you review your monthly credit card and bank statements.
Ask yourself the following questions as you review your telephone bill:
Do I recognize the names of all the companies listed on my bill?
What services were provided by the listed companies?
Does my bill include charges for calls I did not place and services I did not authorize?
Are the rates and line items consistent with the rates and line items that the company quoted to me?
You may be billed for a call you placed or a service you used, but the description listed on your telephone bill for the call or service may be unclear. If you don't know what service was provided for a charge listed on your bill, ask the company that billed the charge to explain the service provided before paying the charge.
Make sure you know what service was provided, even for small charges. Crammers often try to go undetected by submitting $2.00 or $3.00 charges to thousands of consumers.
Keep a record of the telephone services you have authorized and used – including calls placed to 900 numbers and other types of telephone information services. These records can be helpful when billing descriptions are unclear.
Carefully read all forms and promotional materials – including the fine print – before signing up for telephone services or other services to be billed on your phone bill.
Companies compete for your telephone business. Use your buying power wisely and shop around. If you think that a company’s charges are too high or that their services do not meet your needs, contact other companies and try to get a better deal.
Actions You Can Take if You Think You've Been Crammed
Take the following actions to dispute the unauthorized charges listed on your telephone bill:
Immediately call the company that charged you for calls you did not place, or charged you for services you did not authorize or use. Ask the company to explain the charges. Request an adjustment to your bill for any incorrect charges.
Call your own local telephone company. FCC rules require telephone companies to place a toll-free number on their bills for customers to contact with billing inquiries. Explain your concerns about the charges and ask your local telephone company the procedure for removing incorrect charges from your bill.
If neither the local phone company nor the company in question will remove incorrect charges from your telephone bill, you can file a complaint with the regulatory agency that handles your particular area of concern:
For charges on your telephone bill for non-telephone-related services, your complaint should be filed with the Federal Trade Commission (FTC). Call 1-877-FTC-HELP, or use the FTC's online complaint form at https://rn.ftc.gov/dod/wsolcq$.startup. (An example of non-telephone related services is "content" services such as psychic hotlines.)
For charges for telephone-related services provided within your state, you should contact your state regulatory commission. This information may be listed in the government section of your telephone directory.
For charges related to telephone services between two states or internationally, you should contact the FCC. Complaints about these issues may be filed with the FCC in writing, by phone or by e-mail. You may contact the FCC at:
Federal Communications Commission
Consumer & Governmental Affairs Bureau
Consumer Complaints
445 12th Street, SW
Washington, D.C. 20554
Phone: 1-888-CALL-FCC (1-888-225-5322)
TTY: 1-888-TELL-FCC (1-888-835-5322)
Fax: (202) 418-0232
E-mail: fccinfo@fcc.gov
Information provided by the Federal Communications

Save a Bundle on Telecom Services

Cable, phone and Internet packages dangle attractive prices.

Tying up your telecom services in a single package is the lure many local telephone and cable companies are casting in selected areas around the U.S. For about $100 a month, you can get cable or satellite TV, local and long-distance telephone service, plus high-speed Internet service. In addition to paying just one bill, you have just one company to call if you have a technical or billing issue. Then again, this one-stop-shop approach can backfire if your vendor's customer service stinks.
Many bundled deals (often marketed as "triple plays" or "triple packs") are limited-time offers ranging from three to 12 months. The Comcast Triple Play, for instance, includes Internet, phone and cable service for $99 per month for one year. After the year is up, will the hammer fall -- and the price skyrocket? Not necessarily. You can expect Comcast's package to cost "about $130 per month," says company spokeswoman Jenni Moyer.

Patrick Matters, who lives in Indianapolis, signed up for Comcast's Triple Play about a year ago. He pays $100 to $110 per month ("a little more if my daughters buy a movie"), a savings of more than $50 over his previous a la carte plans. At $130 per month, he'd still be ahead.
The Triple Play is for new customers only. But current Comcast subscribers can also get discounts if they add new services. For example, a Comcast cable-TV customer can sign up for the company's phone service for $33 per month for one year. If you're already a subscriber, check your vendor's Web site for bundled discounts.
Some vendors are offering quadruple plays that add wireless phone service. AT&T's Quad Pack, for instance, bundles Internet, telephone, Dish Network satellite TV and Cingular Wireless service for $123 per month. Its Triple Pack -- Internet, telephone and wireless -- costs $95 per month.
Regional offers. Bundles vary depending on where you live. For example, in Qwest's 14-state region, the starting price for a package including Internet, phone and DirecTV is about $90 per month. In southern California, bundles from Time Warner Cable with Internet, phone and cable start at about $100. And in areas of Massachusetts and other states where Verizon has wired homes with its FiOS high-speed fiber-optic service, subscribers can get Internet, telephone and nearly 200 digital cable TV and music channels for $105 per month. Verizon offers bundles with satellite TV in other markets.
Although price is a big draw, a bundle isn't worth it if it excludes services you want. The AT&T Quad Pack, for instance, allows only 100 minutes per month of direct-dial calls from your home. More long-distance minutes cost 9 cents each.
And there may be other drawbacks. If a single high-speed line brings all communications to your home, you could lose your phone, cable and Internet service at the same time if the line goes down. Some digital phone services that use the Internet for voice calls don't support faxing -- a significant shortcoming for home-based businesses.
And bundles make it more difficult to change providers for a specific service -- for instance, switching from cable to satellite TV. Of course, from a telecom company's perspective, that's the whole idea.
Still, the convenience and relatively low prices make bundled services appealing. And there should be plenty of competition as telephone and cable companies duke it out.

Saying Goodbye to Your Cellphone Carrier Just Got Cheaper, Thanks to a California Ruling: Why the Court's Decision was Correct, but Is Only Part of a Longer Story

Saying Goodbye to Your Cellphone Carrier Just Got Cheaper, Thanks to a California Ruling: Why the Court's Decision was Correct, but Is Only Part of a Longer Story

By ANITA RAMASASTRY

Tuesday, Aug. 12, 2008

If you have a cellphone, you are probably familiar with the fact that if you cancel your contract with your carrier prematurely, you may have to pay a whopping termination fee – up to $200. If you have a family plan, that fee might be even larger. So, you often find yourself locked into a particular cellphone carrier’s service for several years at a time. However, this situation may change, thanks to a recent judicial decision that will offer cellphone users at least temporary relief.In late July, a California court issued a preliminary ruling holding that cellphone carrier Sprint Nextel was illegally imposing early termination fees on its customers. The judge ordered the wireless carrier to repay former customers around $18.2 million in early-termination fees, and to stop trying to collect an additional $54.7 million from customers who had refused or simply had not yet paid these fees.
The ruling is only a temporary ruling, and the judge will hear additional arguments and entertain additional evidence. Still, it represents a major blow to Sprint and other carriers.
In this column, I will discuss the basis of the lawsuit and explain why, under state law, the judge’s ruling was likely correct. At the same time, I will explain why this is probably not the end of the story: Cellphone companies may push for federal regulation allowing the early-termination fees or may simply raise the cost of the phones they sell.
The Cellphone Termination Lawsuits
In 2006, cellphone users commenced a series of lawsuits again the major cellphone companies including Sprint Nextel, AT&T, and Verizon, alleging the carriers violated California’s unfair business practices law. More specifically, the plaintiffs claimed that the early-termination fees constituted an illegal penalty, rather than a lawful fee.
Cellphone carriers, in contrast, defend the fees as necessary so they can recoup the cost of cellphones which they offer to consumers at a low, subsidized price. (AT&T offers the iPhone for $199, for example, but requires customers to subscribe to AT&T’s service for two years.)
In the California case, a jury found that Sprint customers had breached their contracts by terminating their service early, but the judge’s ruling mooted the jury’s finding – for the jury found (at least as a preliminary matter) that the term of the contract that imposed the fees was illegal.
Verizon Wireless agreed to pay $21 million to settle all claims against the company in a separate lawsuit. Moreover, in light of the initial decision against Sprit, we may see other cell phone carriers settle as well.
Why The Court’s Decision Was the Correct One
Although the judge has reserved the right to reverse her initial decision, she shouldn’t; it was the right one.
Under California law, contracts may contain a “liquidated damages” clause stating the damages one side must pay if it breaches the contract. But the amount stated, under the law, must represent a reasonable estimate of damages – not what the law calls a “penalty.”
A penalty is a fee that fails the test of bearing some relationship to actual or expected damages. And according to the judge’s initial ruling, Sprint Nextel’s fees failed that test. According to the ruling, the contracts were "implemented primarily as a means to discourage customers from leaving" – not to liquidate the true costs of a customer’s leaving early. Indeed, the judge wrote, "[t]here was no evidence at trial that [Sprint Nextel] did a damage analysis that considered the lost revenue from contracts, the avoidable costs, or Nextel's expected lost profits from contract terminations.”
Early Termination Fees May Be Replaced By Other Cost Hikes
Is this the end of the story? The answer is no. For one thing, the California ruling is certain to be appealed. In addition, even if the California ruling stands, and other courts in other states rules similarly, the cellphone companies have a variety of options short of simply giving up the imposition of early-termination fees.
First, they may get relief from the federal government. The Federal Communications Commission (FCC) is currently reviewing a proposal put forth by FCC Chairman Kevin Martin that would give the FCC authority to regulate these fees. Reclassifying the fees as “rates” could allow them to be regulated by the FCC as part of the telecommunications sector. Martin has proposed a sliding scaled for termination fees – with fees diminishing the longer a customer retained her cell phone service.
In June 2008, the FCC held a hearing on the proposal. Consumer groups and peeved customers complained about the steep early termination fees. Still, if the proposal is adopted, it could permit early-termination fees – and even attempt to do so retroactively, preempting state laws like California’s as applied to past as well as current and future customers.
Even without FCC intervention or a federal law in their favor, the cellphone companies still have options. They could stop offering low-priced phones with their contracts. They could also do their homework and assess the actual costs of early cell phone termination (including non-recoupment of the discount for the low-priced phone) and set their early-termination fees accordingly.
One step toward showing the fees are not a “penalty” would be to prorate them so that customers who terminate later in their contract pay less. Verizon Wireless was the first to offer pro-rated early termination fees. Now AT&T and T-Mobile plan to do the same, and Sprint Nextel said it will do so later this year. While customers may still feel the fees are unfair, at least the companies – prompted by the recent litigation – have made a move in a fairer direction.

A judge in California has ruled that Sprint Nextel's early termination fees are illegal

A judge in California has ruled that Sprint Nextel's early termination fees are illegal and said the wireless operator should pay back $18.2 million in collected fees to consumers, a decision that could help sway decisions on similar cases throughout the country.

The preliminary decision released earlier this week is a major blow to Sprint and to other phone companies in their battle to defend themselves against angry consumers who say the fees imposed on them when they leave the companies' services are unlawful.
Verizon Wireless, which was also being sued in California, has already settled its case, agreeing to pay $21 million to settle all claims against the company. And after the decision against Sprint, there's a chance that cases against T-Mobile and AT&T could also be settled.
Early termination fees have been around almost as long as cell phone service. Wireless operators impose the fees, which can be as high as $200 per line, on customers who cancel service before their contracts have expired.
Phone companies say they must impose these fees to recover the cost of subsidizing handsets and for guaranteeing low monthly service charges. But consumer advocates don't buy that argument, and they say the fees are excessive and restrict customers' ability to switch services.
Lawsuit divided
Cell phone users fed up with these fees took their complaints to a California court and formed a class in a lawsuit against the four major carriers in 2006. The court separated the cases and has been dealing with them individually.
Sprint initially won the first battle in its courtroom war. Alameda County Superior Court Judge Bonnie Sabraw had further split the case leaving a jury to answer the question of whether customers had in fact broken their contracts with Sprint. In June, the jury found that indeed customers had broken their contract with Sprint. The jury found that Sprint customers had paid $73.8 million in early termination fees, while the company had lost $225.7 million.
But it was the judge, herself, who decided whether or not the contracts were even legal. And earlier this week, Sabraw issued a preliminary finding that stated these contracts were not legal. She ordered Sprint to pay $18.2 million to customers who had already paid these fees. And she ordered the company to stop trying to collect the $54.7 million from other customers who haven't yet paid the charges they were assessed.
But it's still unclear if Sabraw's preliminary ruling will stand. Both parties in the suit have an opportunity to file additional arguments to sway the judge before she issues her final opinion.
"We are disappointed by the judge's tentative decision," Matt Sullivan, a spokesman for Sprint said. "But we are now focusing on our response to the court."
Legal experts say that even if she stands by her initial opinion, it's likely that Sprint will appeal the decision.
Sprint may also get relief from the federal government. The Federal Communications Commission is currently considering a proposal by chairman Kevin Martin, which would give the FCC authority to regulate these fees. It's also unclear how a move by the FCC might affect the current litigation.
In June, the FCC held a hearing in which unhappy customers and consumer advocates railed against the companies for their business practices. Chairman Martin said he believed the fees were excessive.
But Martin's proposal could retroactively exempt carriers from legal challenges at the state level. And in this case, it could potentially even void any decisions handed down in California.
Consumer advocates agree that something needs to be done to protect consumers from these fees. But Jay Edelson, a managing partner at the law firm KamberEdelson headquartered in Chicago, says that even if the federal government regulates the fees, wireless operators should be held accountable. Edelson, whose firm has represented clients trying to reclaim fees paid for erroneous charges on cell phone bills, was not involved in the early termination fee cases, but he has been watching the outcomes closely.
"Early termination fees are hurting consumers and they're illegal," Edelson said. "If the federal government takes jurisdiction and preempts states' authority, then there should be a federal law that replaces it and protects consumers."
Wireless operators say they are adapting their practices to customers' concerns, and they've begun adjusting their fees to prorate them so that customers who terminate later in their contract pay less. Verizon Wireless was the first to offer pro-rated early termination fees. And now AT&T and T-Mobile offer prorated rates. Sprint Nextel said it will offer prorated fees later this year.

FCC fines calling card companies for deceptive marketing

By Brendan Sasso - 09/01/11 04:48 PM ET

The Federal Communications Commission announced on Thursday $20 million in fines against four prepaid calling card companies for allegedly using deceptive marketing practices.

According to the FCC, STi Telecom, Lyca Tel, Touch-Tel USA and Locus Telecommunications scammed consumers by claiming that they could make hundreds of minutes of calls to foreign countries for only a few dollars. In fact, because of hidden fees and surcharges, consumers could only use a fraction of those minutes, the FCC said.

The FCC fined the companies $5 million each.

In one case the FCC investigated, consumers would have to make a single 13-hour phone call to receive the advertised number of minutes. If the consumers made more than one call, they would receive a smaller fraction of the card value. In another case, a card that promised 1,000 minutes was exhausted after a single 60-minute phone call.

According to investigators, the companies targeted primarily low-income and minority communities.
“Every day, people — many of them from our most vulnerable communities — rely on prepaid calling cards to connect with friends and family around the world," FCC Enforcement Bureau Chief Michele Ellison said. "The orders released today detail the misleading practices — from illegible fine print to impossible-to-calculate fees — that some companies appear to use to sell their cards. We hope that these cases lead all prepaid card providers to reexamine their marketing practices to ensure that they are treating consumers fairly.”


The FCC also released an enforcement advisory on Thursday to raise awareness about deceptive prepaid calling cards.

Source: http://thehill.com/blogs/hillicon-valley/technology/179301-fcc-fines-calling-card-companies-for-deceptive-marketing