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Phone Crammers to Pay $210,000 in Redress

The Federal Trade Commission said yesterday two companies and their collection agency would have to pay $210,000 in redress to consumers who had unauthorized charges added onto their phone bills.

As part of the court settlement, Crown Communication Concepts and Investments Inc., Crown Communications Two Inc. and Global Collections Inc., which all operated out of the same Florida office, also will forgive about $36 million in unpaid charges for services billed that were never paid.

The companies are no longer operating and could not be reached for comment.

According to the FTC, the companies used a caller ID system to insert unauthorized long-distance charges — a process called “cramming” — onto customers’ bills when the customers responded to a toll-free number in the companies’ advertising. The charges were for “audiotext” calls, which primarily were adult-content services. When customers called to complain, the customers’ local carriers generally removed the charges, but some customers were then contacted by Global, the Crown companies’ collection agency, and told that if they did not pay their credit rating would be damaged.

The FTC originally filed the complaint with the Federal District Court in Southern Florida in 1998.

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