Feds Settle with BSG/ZPDI/Billing Concepts

FTC trying to rein in massive 'cramming' operations

By Joseph S. Enoch
ConsumerAffairs.com

March 14, 2007

Cramming • Wireless Carriers Agree To $1.5 Million Cramming Settlement • Illinois Files "Cramming" Suit Against California Firm • Florida Seeks to Outlaw Cramming • AT&T Settles Cramming Suit • Feds Settle with BSG/ZPDI/Billing Concepts • Verizon Signs Florida Anti-Cramming Agreement • Embarq Agreement Protects Florida Consumers from Cramming • Florida Company Agrees to Repay 'Cramming' Charges • Florida Files "Cramming" Suit • Congress, Feds Sleep While Cramming Charges Afflict Thousands • Florida Seeks Nationwide Telephone Billing Probe • Florida Opens "Cramming" Probe • Cramming Hits Consumers When They Least Expect It • Spitzer Wins Cramming Concessions from Verizon • Mobsters Charged in Cramming Scheme • FTC Opens Hotline for Epixtar Victims --- • ILD Telecommunications • Billing Concepts/ZPDI

The Federal Trade Commission is working to recover as much money as possible from scam artists who have placed more than $35 million in suspect and often outright bogus charges on consumers' phone bills.

Yesterday the FTC reached an agreement to settle with BSG Clearing Solutions, also known as Billing Concepts and ZPDI, for $1.9 million.

The suit seeks restitution for consumers who found mysterious and outrageously overpriced collect charges on their phone bills, placed by BSG, on behalf of its client and co-defendant in the case, Nationwide Connections, Inc.

Nationwide billed consumers for phony collect calls that were purportedly made to telephone lines dedicated to computers and fax machines, and to homes and businesses where no one was present, and some consumers’ caller ID logs had no record of collect calls for which they were billed, according to an FTC press release.

The charges, usually between $5 and $8, typically were buried in the back of consumers’ monthly phone bills.

BSG is the nation's largest phone bill aggregator, working with many of the nation's largest phone companies to place bills from sex hotlines and just about everything else onto consumers' bills.

Although many consumer advocates believe the aggregators and phone companies, such as Verizon, should be held liable, too, they are frequently overlooked by zealous attorneys who attack the originators of the false charges instead.

This case is all part of a larger effort by the FTC and originated in October 2007 when the agency settled with Nationwide and its ringleader, Willoughby Farr, said FTC assistant director Dan Salsburg.

Some customer funds have been recovered, Salsburg said. But the FTC is still trying to recover the vast majority of the $34.4 million Nationwide is accused of stealing from U.S. consumers. All of its operations have ceased.

Hundreds of complaints

ZPDI • Feds Settle with BSG/ZPDI/Billing Concepts • Disputed Collect Calls • Expensive Collect Calls • Calling Card Calls • Hotel Room Calls • Scam Calls from Mexico • "Regular Carrier Unavailable" • Calls through Opticom --- • Congressional Action Needed to Stop ZPDI • You can fight back • ZPDI: What Can Consumers Do? • Consumer complaints about ZPDI and WXT Communications • Who's Behind ZPDI?

ConsumerAffairs.com has received 458 complaints about BSG, most under the company name ZPDI. Although BSG comprises 85 percent of the market, the most notorious aggregator appears to be ILD Teleservices which has amassed 2,742 complaints in the ConsumerAffairs.com database.

Regardless of who is cramming the charges, the complaints all look the same.

“I received my phone bill with a collect call from UNITEDKINGDM,” wrote Tina of Sherwood, Ark. “The bill shows "billed on behalf of FIBERLINK." Total charge is $12.86. I called ZPDI and they told me someone entered my info on a website and would not tell me anything else and refused to drop the charge.”

BSG canceled its contract with Nationwide in 2005 according to a prepared statement from BSG's president, Greg Carter.

“From the outset, BSG has maintained that it bears no responsibility for the fraudulent actions of the terminated customer (Nationwide) and that BSG was also a victim of Nationwide’s fraud,” Carter said in the statement. “Nonetheless, as the largest processor of and clearinghouse for Local Exchange Carrier (LEC) billing, BSG believes that it, the industry and the consumer are best served by BSG devoting its energies, going forward, in continuing to lead this industry in the elimination of unauthorized billing.”

Although ConsumerAffairs.com has complaints about BSG from every year in the past eight years, Carter said the company works hard to curb cramming.

“BSG is committed to a zero tolerance policy for cramming and other deceptive business practices, and over the years has been in the forefront of developing and implementing the billing industry’s most stringent verification procedures,” Carter continued. “BSG has worked closely with federal and state regulators, and local exchange carriers to explore new methods to eliminate telecommunications fraud, and it is committed to continue and to strengthen these efforts in the future.”

The next step in the FTC's battle against crammers is get yesterday's settlement approved by Florida courts, where BSG is based and then to go after Integretel, a much smaller version of BSG, which is blamed for helping to steal $4-$5 million from consumers.

Just days after the FTC filed its lawsuit against Integretel, the company filled for Chapter 11 bankruptcy. Salsburg said that has slowed that case down but he's hopeful the tactic will not succeed.

ConsumerAffairs.com has received 24 complaints from consumers who believe Integretel ripped them off.

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