Money

$70 Million Phone Charge in "Cramming" Scam

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Police are currently investigating a Montana family that made $70 million from falsely charging their customers. Steven Sann, his wife Terry, son Nathan, and accountant Robert Braach apparently run nine companies that engage in "cramming," which involves making unauthorized charges on a customer's bill.

According to Inquisitr, the family's companies are voice mail and electronic fax services that "charge a customer's phone bill through an intermediary called a bill aggregator."

The charge appears at the end of a customer's phone bill and is usually around $14. It occurs month after month until a customer challenges it. 

The Federal Trade Commission has asked a judge to issue a preliminary injunction forcing the Sann's to stop operating their companies and freeze their assets. 

Sann's attorney, Sarah Rhoades, has asked the judge for a stay in FTC civil action as there is already a criminal investigation occurring. 

Rhoades said in a court filing that allowing the government to pursue both criminal and civil cases against Sann is "improper." 

Steven Sann used some of the $70 million to buy 94 acres in an area of Montana where he runs a youth camp. He also used some of the funds to defend himself in a medical marijuana case. 

At first, Sann deposited the money into a bank account for Bibliologic, a religious organization created by Sann and Braach. 

The organization was created in 2009 and was labeled as a charitable religious organization. Bibliologic has no members, according to Montana Secretary of State registration records, and it also has no physical address. 

Of the $70 million, $40 million has been returned after customers challenged the charges. But data collected by the FTC shows that many more customers have no idea they're being charged. 

In April, the companies had over 100,000 voice mail accounts open, but only 12 customers used their accounts. Over a span of two years, fewer than 1 percent of people with voice mail accounts actually accessed them. 

The FTC complaint says, "these abysmally low usage rates strongly suggest that consumers neither ordered the services nor knew they were being billed for them."