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Unauthorized Phone Charges Costing Americans More Than $2 Billion a Year
Posted: 26-Jul-2011 [Source: Xigo]

[Each year, telephone companies place approximately 300 million third-party charges on their customers’ wire-line and wireless phone bills, amounting to more than $2 billion worth of unauthorized fees]

Manassas. VA -- In a hearing on July 13th, 2011, Xigo CEO Dave Spofford joined Illinois Attorney General Lisa Madigan, Vermont Assistant Attorney General Elliot Burg and Walter McCormick of the U.S. Telecom Association to testify in front of the United States Senate Committee on Commerce, Science & Transportation about the $2 billion worth of unauthorized charges appearing on phone bills each year.

Chairman John D. (Jay) Rockefeller IV is leading an investigation into cramming – a deceptive practice that adds unauthorized third-party charges to millions of companies’ and consumers’ telephone bills each month. Each year, telephone companies place approximately 300 million third-party charges on their customers’ wire-line and wireless phone bills, amounting to more than $2 billion worth of unauthorized fees. The Committee issued its findings at the conclusion of the hearing.

“I have a 20-year background in telecommunications contracts and billing and I have never seen cramming as bad as it is today,” said Dave Spofford, CEO of Xigo. “With more and more corporations equipping employees with mobile devices, we are going to continue to see a rise in cramming unless we take action.”

In support of Senator Rockefeller’s Commerce Committee investigation, Xigo examined telecommunications bills for 200 clients and found the following:

* 40,000 instances of cramming in just three years

* The average monthly amount for a cram is approximately $18

* 71% of Xigo customers have experienced a cram charge during the past three years

“Cramming is a fraud epidemic affecting consumers in every state,” said Illinois Attorney General Lisa Madigan. “We must enact legislation to ban third-party businesses from cramming charges on phone bills.”

After sifting through reams of data, Xigo also provided the Commerce Committee with a list of more than 600 vendors that are engaging in cramming. Fueling the belief that these vendors are conducting questionable business practices is the fact that many of the offending groups’ names are variations of an existing vendor name—examples of a failed attempt to bypass the auto-detection feature of Xigo’s mobile expense management software.

With an estimated 80% of businesses today experiencing a cram charge, there is a clear need for enterprises to find an easy way to persistently root out the many “needle in a haystack” instances of cramming that are too difficult or too costly to find using normal methods.

“While cramming costs may seem insignificant when reviewing on a month-to-month basis, they add up pretty quickly,” added Spofford. “Without a scalable software platform like Xigo Enterprise in place, the costs to identify, document and recover these lost fees could easily exceed the actual cramming charges.”

Additional Resources

To review the full report on cramming produced by the U.S. Senate Committee on Commerce, Science & Transportation, please visit the following site: Unauthorized Charges on Telephone Bills Report.

A full transcript of Xigo CEO Dave Spofford’s testimony before the U.S. Senate is available here: (insert link), and for more information on Xigo’s approach to mobile expense management, please go to www.xigo.com.

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