Small Businesses Consumer Alert! Beware of Fraudulent Phone Charges

Arlene Howard's business phones were disconnected after she refused to pay fraudulent charges.

Thursday, June 15, Los Angeles—Small business owners in the Los Angeles area are facing a double whammy from a combination of fraudulent hackers and an imperious phone company.   Customers whose businesses are served by Charter/Time Warner and other companies are finding out that they can be billed for thousands of dollars worth of phone calls they didn’t make.

Even worse, some customers report that Charter/Time Warner is refusing to credit their bills even when they can prove they did not authorize the calls.

These small business customers appear to be the victims of hackers who exploit their phone systems to make unauthorized international calls to far-off places like Cuba and Bosnia, sometimes racking up thousands of dollars in charges in a single night.

When the customer receives a bill- in the worst case we’ve heard of for $60,000 – they might expect Charter to treat them like a victim of fraud. But Charter says that if hacking occurred within the businesses’ own phone system, their service agreement holds the customer liable.

Charter is not the only company that forces customers to pay fraudulent charges. Telepacific Co. has also been the subject of complaints filed with the California Public Utilities Commission after businesses received bills for over $30,000 resulting from a similar hacking scheme.

Charter customer and small business owner Arlene Howard told ABC’s Good Morning America that her service was cut off when she refused to pay $3000 in fraudulent charges, even though it costs phone companies like Charter very little to carry these unauthorized calls. Clearly the technology exists for companies like Charter to monitor for fraud and alert customers to suspicious activity – credit card companies do it routinely.

TURN urges small business customers to protect themselves:

  • Check your phone company contract to see if you will be on the hook for unauthorized calls and other charges on your bill- or call and ask.
  • Make sure your phone equipment is as secure as possible by contacting your IT help or your phone system vendor and asking them to check for security vulnerabilities.
  • If you don’t normally make international calls, request that they be blocked.
  • Monitor your phone bills closely and if you have been the victim of hacking or unauthorized charges, dispute them immediately with the phone company and submit a complaint to the CPUC.