Position Statement on MSNBC's Recent Article and the Practice of "Cramming"

MSNBC has run two stories on the practice of "cramming" and has suggested that ILD is involved in this practice. We would like to assure you that ILD strongly condemns and does not participate in "cramming" which is the practice of placing unauthorized or misleading charges on a telephone bill. ILD currently processes in excess of 120 million transactions per year, equating to approximately one half of a billion dollars (or $500 million) of third party charges placed on telephone bills. ILD's proportion of chargeback's to transactions remains consistent with credit card payment processing industry standards, and we continue to take the lead in our industry with the establishment of a set of best practices for merchants.

ILD has stringent policies and procedures to guard against cramming and we continually strive to improve them. We take every measure possible to ensure we are working with merchants that do not engage in this practice, including background searches, review of merchant's customer acquisition methods, and adherence to strict authorization verification procedures. We view our role as a first line of defense in guarding against consumer fraud, and as such we actively monitor our merchant customer's business practices. ILD remains vigilant in mitigating unauthorized transactions, continually refining our processes, and we proactively participate in consumer forums to provide a clear path to resolution. As a result of stringent business practices and systematic authentication tools, we have terminated billing agreements with merchant customers found in violation of our policies.

MSNBC's first article was written in 2005 and ILD terminated merchant agreements more than 4 years ago with the merchants mentioned in the article. Additionally, ILD's website clearly provides contact information for media related questions to help with their research and answer questions. To our knowledge, there was no attempt by MSNBC to contact ILD to verify the accusations in this news story. By not contacting us, MSNBC left out critical information which directly contradicts the story's claims. In the most recent article, the consumer cited contacted ILD for the first time more than a week prior to the story's publication and received a full credit that same day. The problem was resolved and the merchant was notified. Additionally, it was stated that the merchant does not maintain a website and cannot be reached by telephone, however that is also incorrect and its website clearly lists its contact number.

When a consumer is unhappy with a purchase, wants to cancel a service or doesn't recognize a charge, ILD's resolution team helps them resolve issues with their merchants quickly and efficiently. It is ILD's business practice to provide exceptional consumer satisfaction, which includes immediately conducting an investigation with the merchant and issuing credits as appropriate. In the event ILD finds a merchant is practicing "cramming" or any other unlawful or unethical practice, we take immediate action, which can include ceasing further billing for that company.

In summary:

  • ILD strongly condemns and does not participate in "cramming".
  • ILD monitors the business practices and billing transactions of its merchants through systematic authentication and validation tools.
  • ILD terminates billing agreements with merchants we find are in violation of our policies.
  • ILD remains vigilant in safeguarding consumers from unauthorized transactions.
  • ILD was not contacted by MSNBC leaving out critical data that contradicts claims in its most recent story.
  • ILD will immediately take action with a merchant it finds is practicing cramming or any other unlawful or unethical practice.

The ILD Merchant and Charge Verification Process

Background Investigations
Before beginning to work with any merchant customer, ILD conducts a comprehensive background search on the merchant customer, its officers and owners. We also utilize an independent third-party background investigator to re-examine the merchant customer, its officers, owners and business information. Additionally, prior to accepting a merchant as a phone billing customer, ILD collects data on the merchant’s product and/ or service, the marketing and sales plan for the product and/ or service, and other pertinent company information. We then carefully review all materials and products and/ or services to ensure we are working with a reputable company, prior to submission for final review and approval by the Local Exchange Carriers.

Once we have agreed to bill for a merchant customer, we require that merchant customer to document all authorizations of charges. For example, if a consumer signs up for Internet service over the phone, we require the Internet service provider to record that consumer’s authorization of the charges through a third-party verification service. That third-party verification service is paid by the number of recordings, not by whether or not a consumer authorizes a transaction.

Complaint Resolution
ILD takes all consumer complaints very seriously. With a billing telephone number, ILD can quickly investigate a charge and explain the charges to the consumer. ILD often credits consumers whose charges were in fact authorized, but are unhappy with those charges, to ensure satisfaction. If the charge was not authorized, ILD will rectify the situation with the consumer and Telephone Company. If a consumer has a question about their phone bill, they can call our Resolution Center at (800) 433-4518

If you have further questions regarding ILD’s policies or concerns about any news stories referencing ILD, we would be happy to discuss them with you. Please feel free to contact AskILD@ildmail.com or call 904-273-2440 and ask to speak with Media Relations.

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