Thursday, June 11, 1998
Phone Scam has "Crammed" Sweepstakes out of Number One Spot
Top Five Scams of 1998 Released
Cramming -- billing consumers for optional
services they never ordered -- has overtaken sweepstakes and prize offers to become the number
one scam reported to the National Fraud Information Center so far in 1998.
We were shocked to learn that we had nearly three times as many
reports about cramming as we did about phony prize offers, which had perennially ranked
number one," said NFIC Director Susan Grant. "Cramming wasn't even among the 1997 top
frauds, and now it's outnumbered the second reported scam, slamming, two-to-one."
More than two out of five con artists (44 percent) are using the
phone bill as the preferred method of payment, according to statistics released by the National
Fraud Information Center, a project of the
National Consumers League.
The top five scams are:
- Cramming -- Billing consumers for optional services they never ordered
- Slamming -- In the first six month of 1998, more consumers have reported slamming (phone service
switched to another carrier) incidents to the NFIC than in all of 1997.
- Advance Fee Loans -- Empty promises of personal or business loans, requiring payment of fees in advance; many
companies operating out of Canada.
- Sweepstakes -- Phony prize awards that require payment of fees first -- and never appear.
- Work-at-home scams -- Kits sold to stuff envelopes, make jewelry, or perform other work-at-home -- with false
promises of huge profits.
"The key to cramming, slamming and other telephone-billed fraud
is your phone number. It's not that hard to get," says Grant.
"Many consumers who contact the NFIC about cramming and
slamming are worried that their service will be disconnected if they refuse to pay the charges.
Con artists also exploit the fact that because telephone bills are so long and complicated, it's hard
for consumers to spot unauthorized charges.
The top ten states being crippled by cramming are:
- New York
- Maryland
- Massachusetts
- New Jersey
- Pennsylvania
- Virginia
- California
- Rhode Island
- Ohio
- West Virginia
The top ten states for slamming are:
- New York
- Massachusetts
- New Jersey
- Pennsylvania
- Maryland
- Virginia
- Texas
- Illinois
- New Hampshire
- Florida
Ameritech, Bell Atlantic, Bell South and GTE have recently taken
aggressive steps to stop cramming.
Regional statistics on the top 5 for 1998:
- Everything is bigger in Texas: Texas ranks as number one place where cramming
companies are operating, according to NFIC statistics. The state ranks second in company
locations for slamming. Texas consumers are being scammed by advance-fee loans more
frequently than anywhere else in the U.S.
- Small State, Big Problem: New Hampshire is number 9 when it comes to
slamming complaints.
The National Fraud Information Center offers these tips on cramming:
- Be careful when calling unfamiliar 800 or 900 numbers. Be especially wary of
following instructions to "enter activation code numbers" or answering yes to questions that my
unwittingly result in authorizing unwanted telephone services.
- Read fine print before filling out a contest form or coupon offer
- Scrutinize each page of your phone bill carefully every month as soon as you
receive the bill to make sure that there are no unauthorized charges. Call your local phone
company if you see something you are unsure about. If there is an unauthorized charge, call your
local phone company to let it know that you are disputing a charge and why.
- Contact the National Fraud Information Center to complain
(800-876-7060)
- Send a letter describing what happened and enclosing a copy of the bill to the
Federal Communications Commission, Consumer Protection Branch, mail Stop 1600A2,
Washington, DC 20554.
-30-
The National Consumers League, founded in 1899, is America's pioneer consumer
organization. The NCL's three-pronged approach of research, education and advocacy has made
it an effective representative and source of information for consumers and workers. NCL is a
private, nonprofit membership organization dedicated to representing consumers on issues of
concern.
Editor's note: The NCL brochure "You Make the Call" offers tips for consumers on
cramming and other phone issues, including slamming and long-distance scams. The brochure is
available via the NCL web site:
www.natlconsumersleague.org
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