FTC Obtains Preliminary Injunction in Cramming Case

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A federal judge has granted a stipulated preliminary injunction in the Federal Trade Commission's first case alleging cramming, the practice of charging consumers on their actual phone bills or on look-alike bills for services they have not purchased.


The FTC, four Los-Angeles-based corporate defendants, and their owners and operators negotiated a temporary agreement that will require, i.e., that the companies stop billing consumers for their 800-number-based audio entertainment or information services on the basis of ANI (automatic number identification). Similar to Caller ID, ANI enabled the defendants to identify the telephone number of an incoming call; however, ANI can neither identify the caller not can it ensure that the caller is the person responsible for that telephone line. The stipulated agreement no to bill on the basis of ANI addresses the commission's allegation that consumers who never purchased the defendants' 800-number-based services were subjected to the defendants' efforts to bill and collect data for them.


The case against All state Communications, Inc., Interactive Audiotext Services, Inc., American Billing & Collection, doing business as ABC Services,a nd U.S. Interstate Distributing, Inc. was announced in April. In addition to the companies, the compliant names as defendants Frank Montelione, Russel Leventhal, Stuart Leventhal and John O. Cooper.
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