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Montana family faces federal court for $70 million cramming scheme

Mar 04, 2013 Walt Wojciechowski

American eVoice, an enhanced voicemail and fax service company based in Missoula, Montana, has been shut down by the federal government after years of reports that the business abused consumer credit data by charging cellphone users for services they never signed up for through a strategy known as "cramming." This practice can damage consumer credit, as billed customers can miss payments they are not aware they were responsible for.

The Associated Press reports that the business and several others, which used information like debt collection data to prey on unsuspecting consumers, were in violation of Federal Trade Commission (FTC) guidelines, and the company's operators - Steven, Nathan and Terry Sann - now face charges that could put them in federal prison. The family's accountant, Robert Braach, is also a part of a group accused of scamming consumers out of $70 million through the fraudulent businesses.

Both Braach and Nathan Sann appeared in Missoula's federal district court this week to issue their claims, according to the AP. The source says the pair defended their actions, as Braach assured the court the operations required a "robust validation process" and Sann claimed his family took steps to ensure each account charged was "within approved risk parameters."

The FTC's initial statement shows the investigation was a massive effort involving the region's Better Business Bureau, the Federal Communications Commission and the state's Justice Department. It accuses the alleged scammers of initiating payment without consumer consent, as well as creating the illusion that users did not have a choice in paying for the unclear services.

As consumer credit data is protected by the federal government, alternative credit agencies should be mindful that the FTC suggests contest entries, club membership offers and advertisements for complimentary call minutes can indicate a potentially dangerous business. In credit data firms' best interest, such wording should be avoided to prevent accusations of fraudulent practices, as well as deterrence of potential consumer connections that could otherwise could add to business.