There is certainly no shortage today of illegal schemes designed to collect a quick dollar. There’s one practice, however, that has been deceiving consumers and organizations alike for decades: traffic pumping.
Traffic pumping (click here if you need a quick 101 on the topic) has been touted as the mother of all scams. Here are three things you may or may not know about this powerful scheme:
- It manipulates an originally good idea: Maintaining networks in rural areas is usually more expensive compared to cities; therefore, to offset costs, long-distance telephone companies are required to pay local telephone carriers in rural areas a higher fee for incoming calls. This increased fee is meant to compensate the local carrier, who must run the call at a higher rate. However, some (shady) rural local carriers (i.e. adult phone lines, psychic hotlines) take advantage of this system by inflating the volume of incoming calls to their networks and then profiting from the enormous compensation fees. Worst of all, these local carriers are entitled to these fees under the Telecommunications Act of 1996.
- It affects everyone: It has been known to cost long-distance carriers hundreds of millions of dollars and even brand reputability. Last year, for instance, Comcast fought a federal court to dismiss a case related to poor call quality; the company believed the affected service was a result of a traffic pumping scheme. Overall, however, the money these carriers need to pay usually comes from the consumers’ end in the form of increased service charges. More importantly, it affects carriers’ ability to offer customers reasonable calling plans.
- There isn’t as clear a resolution to traffic pumping as we’d like: For years, the FCC has been pushed to crack down on it, but it isn’t an easy issue to resolve. As we wrote in a previous blog, educating others about the dangers of traffic pumping—and adjusting policies and procedures accordingly—is currently the only solid solution. Consumers can also file an informal complaint with the FCC, or pay $200 to file a formal complaint (you can file an informal complaint with the FCC here).