North Carolina Department of Justice
North Carolina Department of Justice
North Carolina Department of Justice
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AG Cooper stops company that stuck charges into phone bills

Release date: 3/3/2004

Raleigh: A company that placed bogus charges on consumers’ telephone bills must stop and will pay refunds to consumers, Attorney General Roy Cooper announced today.

“This company tried to stick people with calls they didn’t make and charges they hadn’t agreed to,” said Cooper. “We’ve put an end to these extra charges and consumers who paid them will get their money back.”

Wake County Superior Court Judge W. Osmond Smith, III today agreed to Cooper’s request for a consent judgment against Directory Service, Inc. and its parent company, Switched Access Communications, Inc., a Florida corporation with offices in Boynton Beach, Florida.

Under the judgment, Switched Access and Directory Service are barred from billing North Carolina consumers for extra charges, from providing operator services such as collect calls, and from telemarketing in the state. The company must also pay full refunds to every North Carolina consumer who complains about the improper charges added to their phone bills plus $25,000 to the state.

Approximately 40 consumers have filed complaints about Directory Service with Cooper’s office. Consumers who believe they have been crammed by Directory Service can contact the Attorney General’s Consumer Protection Division at (877)-5-NO-SCAM to file a complaint.

Today’s judgment settles a suit brought by Cooper in 2002. The suit claimed that Directory Service and Switched Access billed consumers for directory assistance calls they did not place and collect calls they did not accept. Consumers were charged $1.99 per phony directory assistance inquiry and between $5.00 and $6.00 for each bogus collect call. The practice of placing small, unauthorized charges on consumers' phone bills is generally known as “cramming.”

As alleged in the complaint, consumers were charged for calls they could not have made or accepted from their home number because they were out of town, and businesses got charged for calls made after they had closed for the day. Rather than bill consumers directly, Directory Service submitted these false charges to a billing agent that in turn contracted with local phone companies so that the charges would appear on the consumer’s local phone bill.

“My office is on the look out for companies that hide charges in phone bills, but consumers also need to study their bills for any charges they don’t recognize,” said Cooper. “If you think you’ve been charged for a call or service you didn’t agree to, call your phone company and let my Consumer Protection office know about it.”

NC Department of Justice � 9001 Mail Service Center Raleigh, NC 27699-9001 � (919) 716-6400