Telephony fraudster loses $34.5 million, gets lifetime ban

The owner of three companies that billed more than $30 million in bogus collect call charges, an activity known as cramming,  to millions of consumers throughout the country, has been banned forever from all billing on local telephone bills.

Willoughby Farr agreed to the lifetime ban as part of a federal court order settling Federal Trade Commission charges that he directed a massive unauthorized billing scam for more than two and a half years. The settlement contains a monetary judgment of $34,547,140, which will be partially satisfied by Farr’s transfer to the Commission of all but $7,500 of his frozen assets, the FTC said.

The assets, which must be paid to the FTC, have an estimated value of $475,000 and include three homes and various luxury items. The judgment also ordered the court-appointed receiver to wind down the three companies that Farr controlled. 

The FTC defines cramming as unexplained charges on phone bills for services you never ordered, authorized, received, or used. Sometimes a one-time charge for entertainment services will be crammed onto your phone bill. Other times, monthly recurring charges are crammed onto your phone bill. Cramming of monthly recurring charges falls into two general categories: club memberships, such as psychic clubs, personal clubs, or travel clubs; and telecommunications products or service programs, such as voice mail, paging, and calling cards. 

The FTC charged Farr and other defendants with billing consumers for telephone calls that never occurred, alleging that customers were billed for phony collect calls, including calls to telephone lines dedicated to modems and fax machines, and to homes and businesses where no one was present.

The bogus charges, usually in $5 and $8 increments, were “crammed” in telephone bills, which represented that the charges were billed by OAN Services on behalf of defendant Nationwide Connections, Inc., or by Integretel on behalf of defendants Access One Communications, Inc. and Network One Services, Inc. Farr owned defendants Nationwide Connections, Access One Communications, and Network One Services and masterminded Nationwide’s deceptive and unfair billing scheme, the FTC said.

The FTC said it had also charged the billing aggregators that billed on Nationwide’s behalf – Billing Concepts, Inc., ACI Billing Services, Inc., and BSG Clearing Solutions North America LLC, and The Billing Resource d/b/a Integretel – with deceptive and unfair billing in violation of the FTC Act. The FTC still has a case pending against other principals in this case: Yaret Garcia, Erika Riaboukha, and Qaadir Kaid. One other defendant Mary Lou Farr, has already settled with the FTC. 

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