Watch Out For Hidden Fees

For example, I recently audited a client’s AT&T telephone bill that reflected the customer was receiving 1.5 cents per minute as per their contract.  However, the customer did not realize that hidden well within the hundreds of pages of their bills were numerous surcharges and tacked on fees.  The carrier charged $7.50 for each location of outbound and inbound service.  This particular customer had about 7 locations so AT&T added another $52.50 to their bill.  Next, two of those locations had inbound call routing charges on them, add another $100 per location for $200.  Finally, the account also included a $25 administrative surcharge (account service) fee.  In summary, AT&T tacked on almost $300 in additional fees!  The attractive 1.5 cent per minute call charge really was about .05 cents per minute with all of the fees, making the deal not so attractive.

When I explained the actual charges to the client, he said that his AT&T representative never mentioned the extra charges.  Moreover, as we reviewed his long distance contract that he had signed, there was no specific language noting that those additional administrative fees and charges would appear on his phone bill.  Nevertheless, AT&T was legally covered by referring to the website (tariff) within the contract, which contains the fine print or rules of the contract.  Within that phone tariff, the charges and AT&T’s freedom to legally charge for them were clearly spelled out.

For most of us, going to the actual fine print of the tariff and understanding the additional hidden charges can be difficult and time consuming, therefore, we end up unknowingly paying the extra money to the carriers each month.

Be Sure To Negotiate

The good news is that not all carriers do this, and AT&T’s extra fees can be negotiated away from the deal, if you know what to ask for.  In summary, it pays to negotiate your deal and understand what the real deal is.  So be sure to ask your carrier’s sales representative about the extra hidden fees in the deal they are offering you.  Make sure they clearly spell out that there will be no extra fees.

Also, you can learn about call rounding by the long distance carriers by reading our call rounding article at, When a penny a minute is not really a penny a minute.

Another weapon in your arsenal is to contact the long distance telephone bill audit experts at http://www.bottaboom.com for a free analysis of your long distance or complete telecom billing situation.  We offer a free initial review of your bills and can tell you in plain English what the real story is regarding your telephone and data charges. Our telecom audit services typically save clients between 30-50% on their telecom expense.

A company spokesman at BottaBoom Consulting LLC, a business telephone bill audit industry market leader says, “cell phone audit requests from business clients have risen 32% over the past 24 months and our revenues have significantly increased from the issues we’ve resolved in the wireless area.” This also reflects the general populations’ move to more wireless services, thus an increased need for an audit.

Recent media reports also show positive results for organizations that take the time to audit their cell phone users and wireless devices. We dug up a few recent eye opening stories from twitter posts that show the huge problems some public organizations and users are having with their cell phone accounts as follows:

San Antonio City Employee Fired for Racking up $5,200 Cell Bill for personal calls: http://tiny.cc/pNDnV

Some abuses found in county cell phone audit in county near Tampa Fla: http://tinyurl.com/ylmds2h

Recent cell phone audit for the State of Oregon shows over 450K in wasted telecom expense: http://tiny.cc/jNv6G

A study shows the average Illinois cell phone consumer could save an average of $331 on their wireless phone bills!http://tiny.cc/SG6t5

New Jersey State Medical University cell phone audit shows thousands wasted: http://www.nj.com/news/index.ssf/2009/05/audit_finds_umdnj_spent_big_on.html

In summary, cell phone abuse and waste will continue to increase, as long as consumers continue to use more wireless devices. A great way to combat the problem and save huge expense for organizations is to commission a comprehensive cell phone audit.

We Can Help

Does your company need a business cell phone audit? Contact the phone bill audit experts today at http://www.bottaboom.com/contact-us/

You can read more telecom audit news on our twitter page at: http://twitter.com/bottaboom

About the author: You can learn more about this author at this link: Telecom Audit Professional

Telecom Fraud Types

There are three primary kinds of phone fraud that most of us should be concerned with and that will be addressed in this article. Nuisance fraud (cramming and slamming), proprietary phone system (PBX and key system) fraud, voice mail fraud and the newest challenge, VOIP phone system fraud.

Nuisance Fraud: Most of us as business professionals will at some time or another encounter nuisance fraud, otherwise known as slamming and cramming. Nuisance fraud usually cannot make or break a business when it strikes, but it can drain revenues if left unchecked on the phone bill.

Cramming occurs when a third-party provider charges for services or fees that the customer has not authorized. These charges are neither ordered nor desired by your company. These charges can include products and services such as bogus voice mail service charges, operator assisted calls, calling card programs, monthly service fees and credit check services. Also, bogus yellow pages and white pages advertising can also mysteriously appear on your business phone bills or be billed to you directly.

Cramming is the addition of charges to a subscriber’s telephone bill for services which were neither ordered nor desired by the client, or for fees for calls or services that were not properly disclosed to the consumer. These charges are often assessed by dishonest third-party suppliers of data and communication service that phone companies are required, by law, to allow the third-party to place on the bill.

Have you ever looked at your local telephone bill and seen odd charges from “other service providers that you do not recognize?” If you have, chances are very good that you’ve been crammed. For large businesses, the charges are buried deeply in the bills and are difficult to notice, and can go on for years, month after month without being noticed.

How can you get refunds and combat cramming? First, call your local phone provider and ask them to reverse the charges to the offending party. In most cases, they will. If they do not cooperate, contact the FCC, your better state attorney general and the FTC to lodge a complaint. However, first let the crammer know that you would like give them the opportunity to refund your money.

Slamming can occur when there is an unauthorized switch or change of a carrier providing local, local toll or long distance service. Slamming is frustrating because dishonest phone companies are able easily to change or “pic” your long distance service to their plans, often at a much higher rate than your preferred or selected carrier had provided. Even after you discover the fraud, there is still the headache of switching all of your lines back to the long distance provider you should have and getting the fraudulent service to issue you a refund. How do you prevent it? Ask the carrier to put a “pic freeze” on your phone lines. Insist on a corporate password for access on your all of your local, cellular and long distance phone accounts and restrict all access to those accounts to two key people in your company.

Phone system and voice mail fraud: These kinds of frauds continue to be problematic for many companies and will continue to persist as long as companies have PBX and Key type phone systems in place and long distance calls cost money and hackers can easily gain access. Proactive prevention of this type of fraud is much easier than correcting it once it’s occurred and let’s face it, like most criminals, hackers are lazy and they’ll leave your company alone and go someplace else if your system has the necessary safeguards in place. First, make sure that your phone system manufacturer provided master default passwords for your phone and voicemail systems are changed at your location. Hackers know these passwords and can easily hack your system if they can get access. In fact, many of these phone system master passwords (i.e.: Avaya, Siemens, Nortel, Mitel, Cisco) are posted on the internet, available to anyone. A password change can be done by placing a call to the company that maintains services your phone systems.

Also, make sure that your remote access to you phone systems are secure. This can often be done by using security encryption technology for remote access to your system. Next, make sure that your employees do not use easy passwords like “1111″ to access their voice mail boxes. These can be easily hacked. Also, set your voice mail system to automatically prompt and ensure that employees to change their passwords every 90 days at minimum. When employees leave the company, make sure that you delete their unused voicemail boxes as quickly as possible. Why? The hacker takes control of the voice mail box and records the word “yes.” He then places a third party and instructs the outside operator to call the number of your departed employee’s old mailbox. The operator says, do you accept third party charges for Mr. Jones’ call and the voice mail box answers, “yes” as programmed.

Another major threat to companies today is the problem of weak links in personnel, particularly the company receptionist. This is sometimes referred to as “social engineering fraud.” Employees and your receptionist should be alert for a call that is received whereby an individual may identify him/herself as someone working for the phone company who is testing lines. They might say, “I’m with the phone company and I’m running a test on your phone systems, please transfer me to a particular extension.” Transferring a caller to certain digits first accesses an outside phone line “dialing 9″ and “dialing the 0″ accesses the outside operator who can facilitate a call to anywhere in the world for the crooks. The calls are then back billed to your company. Hackers have also been known to use other ploys like finding out who the board members for large companies and then impersonating that individual on a call to that company. The receptionist may not be able to recognize their voice because typically board members don’t interact with receptionists as much as employees do. However, due to a board member’s prestige, power or reputation in the company, the receptionists are well aware of their power, so the caller is able to get unlimited transferring ability to commit his crimes. The crime usually is not discovered until after the arrival of the phone bill. Warn the receptionist and employees of this ploy. Numerous companies milked for thousands of dollars in overseas calls because of this crime.

If your business has a toll-free inbound number, be on alert! Hackers can call in on the toll free number and use codes and features to place calls overseas or ring up service charges on paid calling services.

Another thing you should do is restrict some call forwarding and conferencing features on your company phone system that might assist hackers in forwarding calls on your dime. Arrange to meet with your phone system vendor to conduct a vulnerability analysis ensure that your phone system is secure. Most of the larger telephone equipment manufacturing vendors, Siemens, Avaya, Nortel and Mitel have security bulletins and security support programs to help keep your systems secure and up to date.

VOIP fraud: The third and final telecom voice fraud concern to be discussed is the latest threat to companies and that is VOIP fraud. Voice over IP fraud is still in its infancy but becoming more prevalent. Again, as previously mentioned in the earlier section regarding phone system fraud, one of the best ways to prevent this kind of fraud is to change the system passwords in your VOIP phone system.

There is starting to be increased attention surrounding recent attacks on VOIP systems but actual cases of documented fraud are now just starting to become a problem. In 2007, two men were arrested because they routed calls through unprotected network ports at other companies to route calls onto providers. Over three weeks, the two routed half a million phone calls to a VOIP provider. Federal investigators believe the two made as much as $1m from the scam. Nevertheless, actual cases of VOIP fraud on these systems are still somewhat rare, however, there is a lot of potential for harm as vulnerabilities and holes in security are becoming more prevalent and more easily exploitable by resourceful hackers.

VOIP hackers can exploit system passwords to gain access to company VOIP voice systems and have and can potentially steal millions of minutes of long distance service. How? Hackers read up on VOIP vendor security bulletins and gather public information on company IP addresses that are posted on the internet, which allows them to hack into client systems. They devise and use customized software code to decipher access codes and access exposed data ports and data gateways and computer systems. Hackers can find it easy to use default or poorly chosen passwords.

To counteract these attacks on your company and keep updated with the latest security technology and VOIP fraud prevention advice, consult with your VOIP equipment vendors and ask specific questions on how to best protect your systems. If you have a large VOIP system, it may make sense for you to have a professional conduct a security audit on your system. IP business consumers and IT managers need to use the latest encryption techniques for their network access and train and monitor their employees on effective safeguarding of their company data and IP system information.

Shoulder surfing alert still applies. I often go to a coffee shop to access their wireless network to make some low cost long distance business calls from my VOIP account. However, a person could easily peek over my shoulder and access my login and password. Armed with this information, they could sell or access my carrier account information and do a lot of damage to me and my company.

How To Spot Telecom Fraud

The best way to determine if a telecom fraud is being committed on an organization is to do an extensive telecommunications audit and complete phone system review at least once per year.

Mark Evans is Principal and founder of BottaBoom Consulting LLC, a contingency-fee based telecommunications audit company that has been saving organizations money for years and fighting phone fraudsters. In his words, “Reviewing phone bills is like trying to find hidden treasure, and there is a lot of gold to be found in almost every company’s phone bills.” BottaBoom offers clients a free introductory cursory phone bill audit to see if a more-in-depth audit is of value to the client. Clients realize a majority of their savings if a full blown telecommunications audit is conducted thereafter. His company can be reached at their website:http://www.bottaboom.com or by direct by phone at: 520-579-8454.

Mark Evans

Mark Evans, the  Principal and founder of BottaBoom LLC,  and 26 year telecom audit pro, was officially named a “telecom junkie” today by the CCMI, one of the telecom industry’s most trusted sources of information and applications.  Mark  joins other phone bill audit experts on a free educational podcast that provides valuable telecom bill audit information on the subject of phone bill cramming.

Podcast Summary: Join the Junkies – telecom auditors Mark Evans and Art Yonemoto andVoice Report Managing Editor Jessica Gdowski – as they brainstorm ways to keep illegitimate third-party charges off your bills.

Title: End the Cramming Nightmare (Click to open)

Date: 6/3/2009
Length: 13:33
Junkies: Jessica Gdowski, Mark Evans, Art Yonemoto

Get a free no risk telecom audit review for your business from BottaBoom today, contact the phone bill audit experts here: http://www.bottaboom.com/contact-us/

By Yosef Rabinowitz, Managing Director of TBRC Cost Recovery, LLC-A Telecommunications Audit Company

In exchange for guaranteed low rates, many businesses sign a term agreement with their long distance carrier. The contract specifically states what the rate per minute will be, and indeed, each call is calculated based on that rate. In a perfect world, your telecommunications carrier would tally up all of your minutes for the month and multiply by the contracted rate to arrive at your bill. In many cases, though, at the bottom line, the average cost per minute comes out higher than what’s clearly written in the contract; sometimes by as much as 100 percent. How do phone carriers pull this off legally and within the framework of their contract with you? The method is call rounding.

A Penny Here; A Penny There
As a general rule, the various types of rounding combined will add about 10 percent to 20 percent to your phone bill overall. If your average telephone call is longer than five minutes, read no further. Rounding will have very little impact. But if the bulk of your calls are very short (i.e. under one minute), watch out! You might be getting ripped off. After reading this article, you’ll understand how rounding affects the cost of a phone call. The next time you negotiate a contract for long distance phone service, you’ll know what to insist on.

There are several ways that a carrier can manipulate the cost of a phone call. Most are  subtle and the results are based on convenient mathematics (convenient for the carrier, that is). They include time rounding, call-length minimums, decimal rounding and cost minimums. In many cases, they can easily turn a monthly telephone bill of $25,000 into $30,000 or more.

Multiplied over a full month of telephone calls, this difference can add up to hundreds, or even thousands of dollars.

Hidden Trap
While you can typically determine if you have six-second rounding just by looking at the call lengths (i.e., 2.1 or 2:06 versus 3), some carriers display the fractions of minutes but bill in full-minute increments. The best way to check is to find a phone call, for example, that is 1.5, 2.6 or 3.4 minutes and verify the math.

In this scenario, call-length minimums add at least 11 percent and as much as 200 percent to a typical short call. To determine how your company’s calls are rounded, look at a page of call detail from a recent telephone bill.

Tips to Consider
Insider Tip #1: When quoting rates, telecom salespeople will refer to these types of rounding as 18/6 (“Eighteen and six”), 30/6 and 60/6 respectively. The first number is the minimum length per call and the last number is the increments thereafter. 6/6 is the best option.

Insider Tip #2: Even the carriers that use 6/6 or 18/6 rounding on domestic calls tend to have at least a 30-second minimum (30/6) on international calls.

As if time rounding wasn’t enough, there’s more. In Part II, we’ll expose how carriers hit you with a double whammy and manipulate the actual phone cost itself through decimal rounding and cost minimums — all perfectly legal, and all under the radar. We’ll also include some tips on how to combat these practices.

About the Author
Yosef Rabinowitz is managing director of TBRC Cost Recovery, LLC, a telecom expense management firm located in New York City. His company helps companies and not-for-profits of all sizes recover money from billing errors and to contain costs going forward, typically on a contingent-fee basis. TBRC is jointly owned by Shanholt Glassman Klein Kramer & Co., CPAs, PC, in New York. Yosef can be reached atyosef@tbrc.com.

When is 3¢ Per Minute Not Really 3¢ Per Minute? A Primer on Call Rounding – Part 2

By Yosef Rabinowitz, Managing Director of TBRC Cost Recovery, LLC

In part one of this two-part article that appeared in the June 22, 2005, issue of The Business Edge, we examined how long-distance carriers round up the length of a phone call so that they can charge more than the rate that is stated in your contract. In part two, we expose how telecom carriers hit you with a double-whammy and further manipulate the actual cost of each call through decimal rounding and cost minimums. It’s all perfectly legal; and all under the radar. We’ll also introduce you to methods for combating these practices.

For our purposes, we’ll assume a rate of 3¢ per minute with 6/6 rounding, unless otherwise indicated.

Nearest Penny vs. Next Penny
For a call that lasts 2.4 minutes, the raw cost is 2.4 x $0.03 = $0.072. A carrier that rounds to the nearest penny will bill this call at 7¢. A carrier that uses next-penny rounding will bill it at 8¢. Those pennies can, and do, add up.

Call rounding can add a significant “surcharge” on your long-distance telephone bill. It may be unavoidable, but it can be minimized. If your company is small and uses a standard “switched” service, ask your carrier for 18/6 and nearest-penny rounding. “No-penny minimum” is generally not available to switched customers. Those carriers that offer three-decimal billing to switched customers tend to charge higher rates per minute that more than offset the effect of rounding.

On the other hand, for companies large enough to use a dedicated circuit or “T-1″ connections for long distance, there are carriers that offer 6/6, no-penny minimum and four-decimal rounding. Mathematically, this arrangement is unlikely to ever add more than 0.3% to your phone bill, and therefore, is the closest thing to our “perfect world” scenario on the market today.

About the Author
Yosef Rabinowitz is managing director of TBRC Cost Recovery, LLC, a telecom cost savings firm located in New York City. His firm helps companies and non-profits of all sizes recover money from billing errors and contain costs, usually on a contingent-fee basis. TBRC is jointly owned by Shanholt Glassman Klein Kramer & Co., CPAs, PC, in New York. Yosef can be reached at yosef@tbrc.com.

Click here to contact the phone bill audit reduction experts.

Great telecom audit companies like BottaBoom are thriving today and are leaders in their profession because they bring fantastic value and telecom cost savings to their clients. So why is the audit business thriving in today’s business marketplace?  The question  is easily answered by looking at how the telecom audit activity specifically benefits business telecom cunsumers? We examine these factors as follows:

1.  More often than not, USA companies do not have the internal staff or capability to successfully perform accurate and proficient telecom audits on their services and phone invoices.

2. Customers often feel intimdated by their telephone carriers and/or their representatives.

3. Telecom audit consultants can take the sales gobbledygook spewed by telecom company personnel and interpret it into easily understood laymen’s terms for their business client to easily evaluate.

4. The phone bill audit costs customers nothing out of pocket, and is only paid as a percentage of their actual verified savings.  No phone cost recovery savings, no payment to the telecommunications auditing company.

5. No customer resources are required except perhaps relaying a bit of history that is provided to the   telecom auditor to kickoff the project.  The telecom audit specialist does all of the difficult research and investigative work for the telecom billing audit project.

6. A telecom audit is often a quick and effective way to reduce major corporate telecom expense by 30%-50%.

7. Telecom Audit clients still make the final decisions on telecom audit cost savings.

8. The ethical telecom auditor does not sell telecom products and services, they simply work with the clients existing telecommunication vendors.

9. All telecom orders and activities are documented in writing and easily traceable for future reference.

10. Telecom ordering and invoice reconciliation is now centralized across the business enterprise for control and accuracy.

11.  A complete telecom service inventory is delivered to the client and maintained through ongoing advanced telecom expense management techniques.

12. Call and voice traffic studies, circuit usage and data network usage studies are conducted and interpreted for the client by the telecom audit consulting firm.

13. Customer employees can be trained simply by working with the auditor and being kept apprised by the telecom consultant of ongoing project activities. Also formal telecom audit training is provided.

14. Client’s management, their CFO and CEO get reports of the actual telecom cost savings that they are receiving and are projected to receive. The reports are often shown to their corporate board of directors to show how effectively they are slashing telecommunication expense.

15. New Telecom ordering is simplified, new services and features are discounted at the bundled rate because of the reference documentation on telecom services.

16. New positive relationships and teaming with the clients’ carriers are formed by the telecom auditor for the benefit of the client. Telecommunication sales teams are held to the task of taking care of their customers.  Phone carrier reps who cannot deliver results and superior service are transferred out of the customer relationship.

17. Telephone carrier management escalation sheets are now available in case telecommunication services go down unexpectedly or the client is experiencing service issues and needs quick response.

18.All  Telephone lines and data circuits are now documented on excel spreadsheets and kept by key management personnel and the telecom audit company for improved emergency preparedness.

19. A new understanding of telecom billing systems and potential cost recovery items are now readily available to key members of the client’s organizations at the payment approval level of the organization.

20.  Cell phone bill auditing and land line network telecom audit, phone billing error and cost recovery and billing approval are now centralized, controlled and part of the same department.

21. Telecom expense management and telecommunications cost management controls are now an integral and ongoing part of the client’s operational business objectives of keeping telecom costs in check.

Try a risk-free telecommunications audit consultation today, contact BottaBoom at 1-888-487-5326 or visit our contact page at http://www.bottaboom.com/contact-us/

One thing you should keep in mind is that many of the telecom carriers use telecom taxes and surcharges to build fluff into corporate phone bills and increase their revenues. Examples of this are most items listed in phone bills as “surcharges” but suprisingly also are listed as “taxes” although as you’ll see, they are often not real taxes that are mandated.   The carriers have the right to charge just about anything they want in the area of taxes and surcharges because they cover themselves contractually. Many of those taxes and surcharges can be negotiated away and the key to eliminating them is at the beginning of your relationship with a telecom carrier.

Many telecom surcharges are bogus and are used primarily to pass costs on to the business telecom consumer or masquerade as taxes, when in fact they are hidden administrative fees that going to the bottom lines of the telecommunications carriers.  We cannot possibly list every tax and surcharge here, and you should talk to your carrier representative and get a breakdown of each surcharge, what it is, what is the percentage and how its applied on your bill.  And again, please remember, many surcharges are negotiable so when you talk to your carrier about pricing incentives, ask them about removing specific surcharges from your bill as a condition of signing up.

911 Service Fee: This fee is charged in some localities to support the emergency 911 telephone service. It normally shows up on the local telephone bill.

Federal Subscriber Line Charge: Also known as: Federal Access Charge, Customer Line Charge, Interstate Access Charge, Interstate Single Line Charge, FCC Approved Customer Line Charge, Subscriber Line Charge or SLC) Federal Subscriber Line Charge:  The Local exchange carriers (LECs) are authorized to bill a Federal Subscriber Line Charge fee.  These fees can be as low as $3 or as high as $7 per line depending on the local carrier.  They are designed to recover cost for access to the long distance network. Some long distance carriers charge their customers various fees on a per line basis but these fees are not mandated, they’re another way for the carrier to add revenue.  Remember, when contracting for local and long distance telecommunications service, everything is negotiable. This federally ordered charge billed by your local telephone company pays part of the cost to the local telephone company of supplying a phone line into your home or business. This recouped money is designed to help local phone companies recover the cost of providing “local loops” which refers to outside telephone wires, underground conduit, telephone poles, and other equipment and facilities connecting you to the telephone network. It is a charge that is part of the price you pay to your local telephone company but it is not an actual mandated tax and revenues for it are not sent in to any government entity.  The FCC places a maximum cap on this charge.  See the FCC website for more information.

California Relay Service:  CA Relay and Comm Surcharge- This surcharge appears solely in the State of California, and is charged as a set percentage of your intrastate service. It assists people with hearing and/or speech disabilities who use text telephones to communicate with people using standard voice telephones.

County Sales Tax:  Some counties charge a special telecommunications sales tax. This applies equally to all carriers serving that county.

District Tax:  Some juristictions charge a special telecommunications sales tax usually to support a school district, new construction of sports or entertainment complexes, or similar purposes. This applies equally to all carriers serving that district.

Federal  Tax  or Federal Excise Tax: This tax appears on your local phone bills. It is charged as a set percentage regardless of which telephone service provider you use. The majority of this tax was nearly completeley eliminated in 2007 and many companies were refunded previous payments on long distance and cell phone excise taxes by the Internal Revenue Service.  The tax still appears minimally on local telephone usage charges and cell phone charges.

Federal Subscriber Line Charge or Federal Access Charge, Customer Line Charge, Interstate Access Charge, Interstate Single Line Charge, FCC Approved Customer Line Charge, Subscriber Line Charge or SLC) This federally ordered charge billed by your local telephone company pays part of the cost to the local telephone company of supplying a phone line into your home or business. It is designed to help local phone companies recover the cost of providing “local loops” which refers to outside telephone wires, underground conduit, telephone poles, and other equipment and facilities connecting you to the telephone network. This is NOT a tax. It is a charge that is part of the price you pay to your local telephone company. Neither the FCC nor any other government agency receives the Federal Subscriber Line Charge. The FCC places a maximum cap on this charge. Currently, as of July 1st, 2002, the FCC places a maximum on this charge of $6.00 for the first line and the lower of actual costs or $7.00 for non-primary lines in residences. For multi-line businesses the maximum allowed is the lower of actual costs or $9.20 per line.

High Cost Fund B or California High Cost Fund Surcharge:  Charged as a set percentage of intrastate usage.  Similar to how USF functions on a national basis.

Local Connect Surcharge:  This fee appears sporadically on some long distance company’s bills. It is not a mandated fee and is negotiable.

Local Number Portability or Number Portability Service Charge or LNP:  This fee started to appear on many local telephone bills in February 1999. This fee allows local telephone companies to recover costs associated with supporting the technical capability to allow a consumer or business to retain their existing telephone number when switching to another local provider. Local companies are allowed, but not required, to pass on these costs. However most do pass them on. They are only allowed to charge this fee for five years from the first date they start to charge the fee, and are not allowed to start charging the fee until they can provide the ability to the end-user of retaining their phone number in the event of switching local telephone companies. Local telephone companies are required to make this “number portability” service available within 6 months of being requested to do so by another local telephone company wishing to service the area. This is not a tax. It is a charge that is part of the price you pay to your local telephone company. Proceeds from the fees do not go to the  FCC nor any other government agency. Local telephone companies are not allowed to charge this fee for customers on the Lifeline Assistance Program.

Local Sales Tax: Some local governments charge a special telecommunications sales tax and are equally applied to all carriers in those jurisdictions.

Monthly Fee: Some calling plans charge a monthly fee, watch these.

Minimum Monthly Revenue Commitment:  This fee is charged by some carriers and is imposed as a shortfall fee.  It is actually a penalty for not meeting call volume specified by the carrier.  Be very wary of this charge.  They are often disguised as something else, I’ve seen even seen them called “general account activity fees” and “administrative fees.”

Monthly Recurring Charge: These are charges that are the normal monthly fees that you are billed a per your telecom service agreement.  These charges do not include usage charges, only pegged monthly service charges.

Municipal Right of Way: Tax on local telephone services designed to cover the cost of managing and maintaining municipal rights of way. Frequently they are charged as a flat per line fee each month, depending on the municipality. This is charged the same by each provider within a given state, however, each state has a different rate.  Check with the state department of revenue and ask them what the rate should be, then check the math on the phone bill.

Payphone Access Fee. Under the 1996 Telecommunications Act, payphone operators must be compensated by long-distance operators for toll-free calls made through their phones. Most long distance companies pass this charge on to you on your long distance bill for calling card calls placed from a payphone or toll free calls received by you from a payphone. This is NOT a tax, and can vary from carrier to carrier.

Long distance PICC Fees: Also known on your phone bill as: National Access Fee, LD Line Charge, Presubscribed Interexchange Carrier Charge, Carrier Line Charge. Presubscribed Line Charge, Regulatory Related Charge, FCC Primary Carrier 1st Line.  This long distance portion charge started on January 1, 1998 as part of the FCC overhaul of telephone fees. Long distance companies pay a flat fee to the local telephone company when you pre-subscribe your telephone line to their long distance service. The charge is designed to compensate the local telephone companies for the costs associated with providing “local loop” service. If a consumer or business has not selected a long distance company for its telephone lines, the local telephone company may bill for the PICC. Although every long distance company is charged the same flat rate per line, long distance companies are allowed to pass on this charge using disquised methodology, and each company uses a different method to charge this carrier specific fee. Although it does not appear negotiable, it often is.   Some telecom providers do not charge this fee at all, and some charge a “carrier specific” flat fee. This is NOT a tax. Please note that on July 1, 2000 the FCC ruled that long distance companies no longer will have to pay this fee to local companies for residential lines, or single line businesses, therefore no longer something the carriers should ethically pass on. The charge continues for multiple line businesses. Many long distance companies are still charging customers for this, although though they aren’t paying it anymore as a pass on to the local telephone companies.

Property Tax Recovery Fee: This is a carrier specific charge only charged by certain carriers. It is not a tax. You should view it as an additional charge and it is negotiable.

PSC Fee: Some states add a surcharge to help support and fund their state’s Public Service Commission.

PUC Fee: Some states add a surcharge to fund their Public Utility Commission.

State Deaf and Disabled Fund: Some states charge a tax to help provide access to telephone and teletype services for deaf and disabled people.

State and Local Municipal Taxes (Also known as: Gross Receipts Tax Surcharge, State Additional Charges, Interstate Tax Surcharge, State Universal Service Fund, State Infrastructure Maintenance Fee, Municipal Utility Tax, Municipal Franchise Fee) State and local governments assess various taxes in different ways and at different rates. Proceeds go to the local governing body. It can be imposed on the revenues of local telephone companies, and long-distance companies operating within a state. Although these taxes vary by your location, they are the same for all providers serving that area. For more information about these taxes, please contact your local and state tax offices, check GOOGLE or your local directory.

Various State USF Taxes: Most USF state tax rates are universally applied to all state telecommunications carriers.  State Universal Service Funds – Most telecommunications providers should be familiar with the federal universal service fund. However, approximately one-third of the states have a similar universal service fund of their own. Although the programs supported by state-level USFs can differ considerably, typically they subsidize telecommunication service to “high cost” areas, underprivileged persons, hospitals, schools and libraries. The contribution amount for state USFs varies widely, from approximately 0.20 percent of intrastate revenues to just under 5 percent of intrastate revenues, and is paid to the state USF administrator. Check with your carrier or state Public Utilities Commission for verification of telecom tax amounts.

1.  Alaska USF,  Alaska Universal Service Fund:  This is a targeted percentage of intrastate usage.

2.  Colorado Universal Service Fund: A charge on all intrastate telecommunications services.

3.  Kansas USF or Kansas Universal Service Fund: Charged as a targeted percentage of intrastate usage.  Similar to the national FUSF charges.

4. Nebraska  USF or Nebraska Universal Service Fund: Charged as a set percentage of intrastate usage. It is similar to the FUSF charge applied nationally.

5. Texas Universal Service Fund: Charged as a targeted percentage of intrastate, international, and interstate usage that meets 2 of 3 conditions (call must originate in Texas, terminates in Texas, and be billed to an address in Texas). This is a separate surcharge from the Texas Infrastructure Fund.

6. Utah USF: Billed as a targeted percentage of intrastate usage. Mirrors conditions billed nationally by the FUSF.

7. Wyoming USF: Charged as a targeted percentage of intrastate usage. Mirrors conditions billed

Through FUSF.

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In the telecom audit arena, I’ve seen the same kind of behavior by telecom executives as those depicted in the movie. Its all about greed. We as telecom audit professionals and telecom cost savings personnel, along with many business telecom consumers all know who they are. Those devious “smartest guys in the room” don’t work for Enron anymore, I think that they are the telecommunications carrier managers and attorneys for the top telecom carriers in the country who devise complicated yet binding legal contract billing methodology in order to maximize profits so that they can effectively gouge unsuspecting business telecom consumers to the tune of billions of dollars.  They are raking in billions of dollars in added revenue each year as a result.  As a telecom audit professional,  I see the real effects that these contractual nuances have on customer telecommunications bills.

As I work my share of multi-million dollar corporate telcom audits for BottaBoom Telecom Auditing, meticulously combing through the vast myriad of charges on phone bills and solving the complicated over-billing puzzles I encounter, I envision these people who devise telecom contract language and policy (the telecom carrier brain trusts) sitting in some conference room for hours and days at a time. Their greedy mission is to find all of the ways to tilt the zero sum game of telecom billing their way in their favor, to enhance their profitability and ensure that the business telecom consumer is squeezed for every last penny. And, I must say, when you closely examine their revenue enhancing tactics and the fine print of telecom contracts in detail, the terms are frighteningly brilliant and quite effective at legally allowing telecommunication companies to get away with legally gouging the typical business consumer.

Professional telecom auditors seem to be the only ones who can unlock the secrets of their greedy billing tactics and navigate through them. But I guess I should be grateful, If it wasn’t for these vast billing issues and their complicated legal nuances and protections to wade through and solve, I’d be out of work. But not only are professional telecom auditors the real heroes in all  of this, they are the most ethical and the ones who wear the white hats.  The telecom auditing profession requires meticulous sleuthing with a well-trained eye who possesses many years of technical telecommunications and auditing discipline to see through the muddy waters of telecom billing and pinpoint the areas of telecom expense waste for large US companies.  We have to outsmart the smartest guys in the room and often do.

At a recent cell phone bill audit project meeting, I had a high ranking Vice President of one of the big five cell phone carriers recently tell me with a straight face, “we really don’t want to present ourselves as being greedy or trying to lock our customers into unreasonable contract terms.” I retorted with, “you must be kidding me, that is exactly what your company does.” That is like Bernie Madoff saying he did not run a Ponzi Scheme! I went on to explain to this VP in detail all of the numerous billing scenarios and term commitment tactics used by his company against my client by his employees and management. Thereafter, he could not possibly defend his company. The contractual rules commitments of many cell phone providers and carriers are in place to trap companies and mandate that you stay with their shoddy cell phone service for years as paying phone prisoners and by legal obligation. There is often no real freedom of choice in today’s cell phone business because of how these deals are written and created by the phone companies.

I want to focus here on cell phone contracts. Let’s examine some of the unbelievably twisted billing tactics. What kinds of slimy tactics do we see on cell phone contracts? Here is an example of what I am talking about with one of the big five cell phone carriers that I recently encountered during a telecom audit:

The client signs an order that is presented to their company as a master agreement main umbrella service contract for all of their cell phones and blackberries. This commits the company for two years with the cell phone provider. But when we looked closely at the fine legal print of the contract that the smartest guys in the room dreamed up we found that if you don’t formally stop (terminate) the contract in two years, the contract automatically renews.

And, don’t think that this master agreement contract governs every move you make as a customer. For example, If you order new cell phone equipment from the carrier on one of your cell phones before the master agreement term is up, the new order commits you to an extra year or two of service, beyond that of your umbrella agreement. And, if you order from the carrier’s support center, this commitment is two years. However, if you order through your sales representative, it’s only one year. And remember, if you call in and place an order that is often legally binding even though you are not provided with the contractual terms when you place the order! Keep in mind that the cell phone carriers are covered legally for all of this behavior.

So all of this is really very confusing, so you flee to the carrier sales representative to clarify matters and help protect you and reassure you. But to further complicate matters, the representative explains time and again exactly what you want to hear, not to worry, they’ll handle everything, in two years you can walk away with no early termination fees. The reality is more often than not, you cannot walk, you are trapped and those phony verbal promises never existed because they’ll be denied later. Make sure, to get everything in writing or you’ll never be able to defeat the smartest guys in the room.

And, the issue of cell phone terms has Congress working on the problem as well.
http://news.cnet.com/8301-10784_3-9774874-7.html

I personally think cell phone carrier terms and conditions are the worst, but the cell phone carriers aren’t the only telecom providers to employ the smartest guy tactics enhance their billing revenue. Most long distance and local carriers do this as well. The most flagrant example I find of customer gouging is the minimum monthly revenue commitment scam and misrepresentation of contracts. I’m not talking about a $10 or !5
usage commitment on a small phone bill. I am talking about $1,000 to $10,000,000 and higher usage commitments to carriers and their unreasonable penalties. If you exceed the commitments, the carrier gets paid the extra revenue. If you fall short, you pay a penalty. And it’s all perfectly legal and contained in the fine print. Is that really fair? No. Does this generate a ton of additional revenue for the telephone companies? Yes.

As we wade through all of the contractual jargon and rules, we’ve come to appreciate those that have created them, because they are so effective. Moreover, they actually play into the hands of some telecom carrier sales reps. Ever heard of the bait and switch swindle? It happens in telecommunications contracts, more than you might think. But that is another article for another day.

If you are such a customer who is frustrated by all of the red tape and tactics employed by the carriers and inflicted by the smartest guys in the room, consider a professional telecommunications billing advocate like BottaBoom to fight for you. As phone company business customers continue to grow angrier and get ripped off by unscrupulous telecoms, I see more class action suits to combat and get justice for these blatant and unethical contract and billing tactics.

Click here to contact the business phone bill audit and telecom cost savings experts.

Most phone bill audit specialists I know, including myself, strive to find pure and absolute savings for our clients. However, this can sometimes lead to sort of a witch hunt by management of employees who may have not paid as good of attention to the telecom bills as we would. I am often asked by a CFO or CEO upon finding hundreds of thousands of dollars in telecom billing errors for their company, “who is responsible for not catching this?” I usually answer that this should be left up to them to decide, not me. Sometimes they are looking for a scapegoat, however, realistically, they need to look to the future not the past.

In this profession, you’ll also get pushback at some point. That pushback might come from a line employee or a member of upper management. There are all kinds of personnel in the usual corporate chain of command and any one of them may be adversarial, either intentionally or by nature. I’ve seen Vice Presidents completely deny that they were ever involved in telecom decisions, when I had signed contracts they executed! They were scared to death of the telecom audit. Also, remember, its human nature to be protective of one’s work turf. Even if one has been told by their management, “listen, we’re bringing in an independent telecom audit pro, and he will likely find mistakes and errors and save money, but don’t take it personally, you’ve only been responsible for approving the telecom invoices for a few months or even a year…relax, its all for the good of the company.” Or “you are not responsible in any way, just work with the consultant.” Now, if you’ve ever consulted in this situation, you might well have experienced a bit of push back from client employees. Do they really want you to find every single phone bill error? Are they worried about losing their jobs if you find issues? These are very real considerations and I’ve seen this kind of protective behavior in employees. Why is recognizing this relevant? Because it can adversely affect your effectiveness as a telecom auditor and your positive impact on the company.

What I would recommend is that particularly at the beginning of the the telecommunications audit project, set the right tone and use some positive psychology. Continually let the employees know that you are working with them as a team, that the success of the audit is a shared experience, and that they are equally responsible for the telecom audit’s success. So you welcome their important and vital imput. Also, this individual possesses valuable knowledge of the telecom network and history that is extremely important to the efficiency of the audit. This does not always work but it sometimes works. And most importantly don’t finger point, be careful about how you present discrepancies. I often bring up the importance of using positive reinforcement during audits and for many managers this does not seem important. However, it is something to be highly cognizant of during the telecommunications audit project.

I am going to be honest, I was once subjected to a very large telecom audit myself as an manager of a large telecom operation for a large enterprise. In fact, our audit was so successful and I had so much fun doing the telecom audit, that I decided that this was the profession I wanted to be in. And at first, I must admit that I was a bit overprotective of my telecom territory. However, the professional telecom auditor that I worked closely with me on the cost saving project convinced me that together we could achieve success and recognition by finding as many cost saving possibilities as we could. He always had me in the same sentence when he talked about money saving company results. And this was absolutely the correct approach to gaining my trust and getting me to work for him on the audit. I received a huge bonus and an upper management position as a result of what we achieved on the audit project. together, we saved the company a few million dollars on the telecommunications audit project.

My point is that we’re living in the real world here and saving thousands of dollars in other people’s backyards can be a weird thing,  but also a very satisfying experience.
So be on alert, use your instincts and tread carefully during the audit. And use positive psychology and effective management techniques to help maximize your telecom savings results.

Click here to contact the telecom audit and telecom cost savings experts.

1. Practice telecom cost savings. Check your long-distance rate for each minute of interstate, intrastate, and international calls. Ensure your rates are competitive. Is your carrier billing you in 6, 18, 30 seconds or full one minute increments? How is the first minute being charged? Is it rounded up to the nearest half minute or minute? Remember this, billing increments matter and the carriers most often round up to bring in extra revenue! All of these things can be negotiated to your advantage. Finally, be sure and get three bids for all of your phone services.

2. Get extra discounts with a long-term agreement (normally 24-36 months in duration) for your business long distance, local, and cell phone services. The ideal phone contract is for no more than 24 months, although the longer the term, the higher the service discount. Be prepared to re-negotiate your contract for new lower rates after 12-18 months. Ensure that your agreement gives your business additional discounts for high-volume usage for your phone services. The more calls you make the higher the service discount should be. You would be surprised at the benefits of practicing solid telecommunications expense management techniques can accomplish in the way of cost reduction for your company.

3. Ask your phone vendor to offer a proposal for bundling of your wireless, local and long distance phone services for even more discounts.

4. Look for cramming on your local phone bills.  Cramming is accomplished by companies that place unauthorized charges on your phone bills.  They offer and deliver nothing to you other than they are able to pass on bogus charges on your telephone bill.  Crammers were able to exploit the telecommunications act of 1992 to invade the phone bill process and pass on charges based on made up services that are never actually delivered.  For more information on cramming, see our cramming description page at http://www.bottaboom.com/2008/11/19/fight-phone-bill-cramming/

5. Here is an old telecom audit trick that still works great: Directory assistance savings: Did you know that you do not have to use your phone company’s expensive 411 information lookup services? Often their pricing is as high as $1.50 per call! Multiply that by 100 calls a month or 1,200 calls a year! Check the internet for free or discount 411 service options and save money. Then re-program your company phone system so that when users dial 411 for directory assistance information, the digits translate on the phone system to instead dial: 1800free411 or you can call google for business listings at 1800goog411..its free or 1800FREE411 for Business or residential. Also, AT&T offers a free service 1-800-YELLOWPAGES (1-800-935-5697) or from your pc, get quick directory assistance info at: http://www.att.com/Common/1800yellowpages/product_description.htm

6. Prevent fraud: Have your phone system vendor check for vulnerabilities in your phone system. For example, ensure that the remote call forwarding feature is turned off. This inherent phone system feature can allow hackers to access your phone system remotely and forward their calls to wherever in the world they want at your expense. You need to ensure that this and other features are turned off unless specifically needed.

7. Shop the internet for cheap pre-paid calling cards and hand them out to traveling employees. Calling cards are available that cost less than two cents per minute for calls placed to anywhere in the U.S.

8. Document your telephone service changes as you make them with the phone company, particularly cancelled services. Telecom audit pros will tell you, “if it is not in writing it does not exist.” Email everything and get verification. Be persistent and realize that five years down the road the phone company may ask for written verification that you canceled a telephone line. And just because the charge disappears from your bill, it can always mysteriously pop up again. Telephone company billing systems have a tendency to undergo updates that somehow add old services back onto the bills! I have seen this happen a number of times. Get an order number from the phone company and again, insist on e-mail verification of the order. Write down the agent’s name you speak with and note the date and time of the communication. Without this documentation you will have difficulty proving you canceled the lines if you continue to be charged for them. Keep a detailed excel spreadsheet with your ordering activities handy and easily accessible to you and your staff.

9. Don’t automatically pay Yellow Pages invoices that come to you in the mail without investigating the actual advertisement. Carefully examine Yellow Pages invoices; they are often from fraudulent companies masquerading as the real Yellow Pages Company. Have the company send you a copy of the actual ad and call and ask the company about their distribution areas.

10. Do an inventory of all of your phone lines and services. Compare what you pay to what you use. This phone inventory will also assist you in disaster planning and emergency preparedness. If this task it too daunting, consider hiring a professional phone bill auditor.

So what is the number one problem that telecommunications audit consultants find that causes companies to bleed the most expense according to Evans? He says, “the greatest and most devastating of all of the expense issues that we’ve historically found during phone bill audit projects is the missed delivery of telecom services and rates according to the executed formal telecommunications contract between the vendor and the customer.  Quite simply, that means that telecom service providers very often miss the mark badly by overcharging when providing formally agreed to pricing and services. Somehow the sales order never gets passed on correctly or is wrongly entered into the telephone company’s billing system.  And, Its interesting that in 99% of the cases of misapplied contract terms, the carriers over-bill their customers.  The carrier billing systems are set up to overcharge by default to protect the carriers, not us.”  The fact that the carriers most often do not under-bill the contract rates is no coincidence and this kind of activity certainly warrants further investigation as to who benefits most from this process.  “The bottom line is that we as company owners must take responsibility for what is paid out for telecom expense each month so my advice is to be sure to check your telecom services and your invoices carefully and match them up, You might be amazed at what you discover in the way of cost savings with a thorough telecommunications audit project,” says Evans.

BottaBoom Consulting LLC. is a Tucson, Arizona based national contingency-fee-based telecom audit firm that’s been saving large businesses and government organizations considerable money for years.  Call 1-888-487-5326 for more information regarding their industry leading telecom auditing services.

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