Unlawfully Billed? Threaten To Report Them For Mail Fraud

One reader says that after Cingular overcharged her, she sent them a letter informing them they were committing mail fraud.

In response, Cingular’s executive offices called her and offered to refund her the overage, in addition to all the money she had ever paid them. “We want you to go away,” they said.

Mail fraud is defined as any unlawful attempt to get money in which the US Postal system is used at any point in committing the crime.

This is the first we’ve heard of this tactic, but it sounds intriguing. Employing it effectively would seem to involve:

1) being right about the unlawful billing
2) letting the company know you’re going to report them
3) giving them a chance to respond favorably
4) filing complaints with the USPS and your local DA’s office

(Photo: Ben Popken)

Comments

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  1. Crazytree says:

    in CA threatening to file a criminal complaint if someone does not settle a civil dispute is considered extortion.

  2. InThrees says:

    There has to be a difference between pointing out someone’s unlawful conduct and extortion, and the California Code can’t be that blanket-y about labeling “hey, you’re breaking the law” as extortion. (That said, I’m not a lawyer etc etc, and I don’t live in California, but I would not hesitate to use this line of response if I did live in California and I had a good faith expectation of being correct.)

    This is a pretty interesting tack this woman took, and one that should have been obvious… especially after reading “The Firm.”

  3. Crazytree says:

    has nothing to do with “the code”… it was the CA Supreme Court ruling in Flatley v. Mauro… aka THE RIVERDANCING RAPIST CASE.

  4. homerjay says:

    Fascinating… Just another way to stick it to the man…

  5. Crazytree says:

    in other words:

    “you’re breaking the law” = OK
    “you’re breaking the law and I am going to report you unless you do as I say” = extortion in CA

  6. crnk says:

    Yes, I’d say that the woman who notified them of the problem was just pointing out that it was wrong and that wrong constitutes mail fraud, and that is something that is taken more seriously.
    However, as InThrees: pointed out, pointing out something is wrong and that it needs to be corrected is not a threat of a criminal complaint itself. Now, if she offered the two explicit choices, that would fall under the extortion part. But I think that stating something is wrong and that it could technically be illegal/fraudulent is not in any way threatening, but more of a reminder of different points of view.

  7. Framling says:

    But are they breaking the law if they just mis-billed her? I see it like this:

    Cingular: You owe us a million dollars.

    Customer: No I don’t.

    Cingular: Nuh-huh, do too.

    Customer: I don’t, I know that I don’t, and if you keep pushing this, that’s mail fraud and I’ll report you for it.

    It’s like in those movies, where the robber is going to shoot the cop, and the cop’s like “Don’t do it man, I’m a cop, you’ll go to jail forever.”

  8. crnk says:

    To add, I think it is a fine line.
    @Crazytree: I think you have it right–an explicit demand is easily extortion, and an notification, possibly even listing the penalties would not be. To note–it usually takes a lot to define a threat–it usually must be pretty explicit.

  9. Davidjay says:

    Has anyone tried this with the RIAA and their new extortion tactics? For example, they’ve certainly sued plenty of people whom have never stolen music, some who have never even used a computer! Perhaps this kind of defense might keep the innocent safe from the RIAA’s new extortion tactics.

  10. Televiper says:

    @Crazytree:

    Umm.. the Riverdance Rapist case involved a woman threatening to charge someone with rape and cause undue harm to a very public career if money wasn’t paid. It also involved an actual law suit being filed and the “distortion” part entering in the equation as an argument for a counter suit.

    That’s significantly different than informing a company they are guilty of mail fraud, and you will file a complaint if it continues.

  11. dbeahn says:

    @Crazytree: It’s only extortion if you make a demand. If she just called them on it and they made an offer, then she didn’t extort anyone.

    Besides, it’s hard to extort a company.

  12. mattatwork says:

    Unfortunately, if you get your statements delivered electronically this method won’t work.

  13. nequam says:

    @mattatwork: Wire fraud : )

    Actually, I’m serious.

  14. BrianH says:

    OK I have a serious question relevant to this topic. And it pertains to everyone’s favorite punching bag, Time Warner. And in this case it’s the best of the best — Time Warner of Southern California.

    These clowns have overcharged me 3 months in a row for my high-speed internet service (thankfully, the internet service has been fine — however the billing system and the CUSTOMER service suck).

    Each month, I call and they claim “oh that’s not right, I don’t know why it went up by $10….” and then claim they’ll credit my account. And don’t. It’s like there’s no accountability, no traceability, no paper trail, no record of these discussions?!?!?

    So…. assuming I receive my bill via mail and can demonstrate the regular overbilling with my monthly statements… can I ask them to look into this, because I believe the overbilling constitutes mail fraud?

  15. Namrepus says:

    To the guy that keeps saying that saying you’ll sue for mail fraud if it’s perpetrated is illegal in California, you’re wrong.

    [www.hollywoodreporteresq.com]

    “The court held the anti-SLAPP statute does not apply when a defendant’s underlying conduct was illegal as a matter of law and therefore not constitutionally protected.”

    Basically, if they really are committing mail fraud, by all means you can threaten to sue if they won’t stop because it’s illegal in the first place.

    If they aren’t committing mail fraud and you threaten to sue. Then you are in deep shit.

  16. TexasScout says:

    If you get your statements by email, then it’s “Wire” fraud. SameO, SameO.

  17. I like the idea, but the person better not accept all the money they had ever paid (unless they had some real shitty service).

    Reason being, one: Cingular could always claim blackmail in a court, and as the USPS is involved, it becomes a Federal Case.

    Two: Try explaining it on your taxes…

  18. Bay State Darren says:

    As much as I love this idea (and I do), there are some articles that just really need professional review, in this case legal, before saying, “Hey readers, go do this!”

    But I did like the article on, “Save money with DIY surgery.”

  19. Crazytree says:

    @Namrepus: wow the e-lawyers really came out in force for this one.

    the underlying illegal conduct is EXTORTION and is therefore an exception to anti-SLAPP.

    whether or not Flatley committed the rape is 100% IRRELEVANT as is whether or not Cingular is actually committing mail fraud. there was no determination made as to whether Flatley actually committed the rape, and even if he did and it was on videotape with a signed confession, threatening to file a criminal complaint unless he pays you $1,000,000 is criminal extortion according to the California Supreme Court.

    SLAPP is irrelevant and inapplicable to Cingular’s billing practices, but is on point with the customer’s supposed “claim for redress”.

    it’s not that complicated.

  20. mantari says:

    This is an interesting tact. I like it. I like it a lot!

  21. vincedotcom says:

    “…”you’re breaking the law” = OK
    “you’re breaking the law and I am going to report you unless you do as I say” = extortion in CA …”

    I live here too and have worked in law enforcement and “you’re breaking the law and I am going to report you unless you do something” is perfectly legal.

    The goal here is to give folks some tools to use against the Corps / Big Boxes.

    Let’s not scare the people just to sound knowledgeable.

  22. DocRaf says:

    Hey, isn’t this how Tom Cruise nailed his crooked law firm in the Movie “The Firm”? Excess billing = mail fraud. Didn’t make Ed Harris happy, but he did manage to get David Strathairn out of the Federal Pen

  23. Crazytree says:

    @vincedotcom: I don’t think you having wrestling drunks for a living qualifies you to comment on the legality of a complex legal issue such as the Flatley v. Muoro decsions and then talk down to me about it based on your mistaken interpretation.

    I work with these issues, have researched them, worked with them and I advise clients on this area of law on a semi-regular basis. This decision has had huge ramifications on the Plaintiff’s Bar.

    While the liklihood of being held accountable for threatening Cingular for a few bucks is very low, the fact of the matter is that these types of threats are noncompliant with Flatley and I would advise my clients against these types of threats for the aforementioned reasons, as well as a *potential* countersuit for malicious prosecution and abuse of process. Then come the SLAPPs and the SLAPP-backs and motions for attorney fees, etc.

    Point is, this is not proper and it is unnecessary.

  24. Ectophensis says:

    @Crazytree:

    As reported by Consumerist, there is no extortion here.

    Scenario One, the Cingular bill: The woman in the story as reported by Consumerist receives an erroneous billing in the mail from Cingular. She tells Cingular that she believes them to be guilty of mail fraud. Consumerist does not say whether or not she threatened to report them. As reported, there is no consideration — the consumer did not request Cingular to do anything, so far as we know.

    Scenario Two, Flatley v. Mauro: Mauro tells Flatley that if Flatley does not settle with Mauro’s client to the tune of seven figures, Mauro’s client will report him for sexual assault. This is quite correctly extortion.

    Scenario Three, Consumerist’s four-step tactic:

    “1) being right about the unlawful billing
    2) letting the company know you’re going to report them
    3) giving them a chance to respond favorably
    4) filing complaints with the USPS and your local DA’s office”

    What you seem to be objecting to is points two and three — letting the company know and giving them a chance to respond favorably.

    If a California consumer of Cingular told Cingular that she believed they were guilty of wire/mail fraud and she was going to report them unless they gave her something of material value is quite likely extortion.

    Conversely, if a California consumer of Cingular told Cingular that she believed they were guilty of wire/mail fraug and she was going to report them unless they stopped is quite likely not extortion, as she is not demanding anything material. If there is an argument to be made that anyone is guilty of extortion here, it would be Cingular trying to extort money out of the consumer — i.e., give us money or we will take you to court for failure to pay your bill.

    If your take on Mauro were correct, an extortion victim could never even tell the extorter to stop, as that action would in and of itself also be extortion.

  25. DocRaf says:

    @vincedotcom:

    “Let’s not scare the people just to sound knowledgeable.”

    Too late.

  26. IRSistherootofallevil says:

    Hey they can’t claim blackmail if they voluntarily offered that money WITHOUT COERCION. Now when you accept that money you will get them to sign a note saying “Cingular Wireless, part of AT&T, has offered (insert client’s name here) a refund in the amount of $(insert amount) knowingly, willingly, voluntarily and without any coercion from (client’s name) whatsoever, and Cingular willingly and voluntarily surrenders all of its rights to sue or otherwise take any legal action on this transaction.”

    It’s not blackmail if Cingular offered the money so that the customer would “go away” and if the customer did not demand that they return all monies paid to Cingular. As far as I know, the customer only asked that they reverse the erroneous charges on their bill.

  27. Ickypoopy says:

    When I used to do collections, I talked to a handful of people who tried this threat. We usually told them to go ahead and try it (Being the A-holes we were). The Legal department never asked us about any issues like this, so I doubt that any of them ever followed through.

  28. anonymoustroll says:

    > @Crazytree: It’s only extortion if you make a
    > demand. If she just called them on it and they
    > made an offer, then she didn’t extort anyone.

    The company’s reaction makes me thing there’s more that meets the eye. I wonder if a class action lawyer might be interested in “purchasing” her case for more than “all the money she had ever paid” the company.

  29. Crazytree says:

    taking a step back… does anyone here think that Cingular has violated any criminal fraud statutes?

  30. DocRaf says:

    “wow the e-lawyers really came out in force for this one.”

  31. gtr225 says:

    @Crazytree: I wouldn’t be surprised. Cingular is notorious for billing errors and overcharges. Whenever you call to correct the issue they make it nearly impossible to fix it.

  32. sdf632 says:

    glad I dont live in california…

    besides, its cingular. same people as sbc; i’ve hit the point where I actually budget time for that purpose of fixing their stupid billing errors every month.

  33. MickeyMoo says:

    The T-Mobile cone of silence over my house suddenly seems more tolerable when weighed against 5 years without a single billing error…

  34. aikoto says:

    Cingular = AT&T = The evil empire. There’s no reason to be a Cingular or AT&T customer in my opinion.

  35. I suppose, if anything, it’s another way to get out of your contract. (Hey, with this method the company even pays you an ETF!)

  36. MeOhMy says:

    @DocRaf: An amusing quote seeing as it came from an e-lawyer! Here’s a tip for everyone: When commenting pretty much anonymously on a blog, you have no real credentials to back up anything you ever say.

    Has Cingular violated any fraud statutes? Not provably, but many people believe that Cingular and other companies systematically mis-bill people hoping they don’t notice and just overpay or that fighting with the company to make it right is not worth the effort. It’s a pattern of activity and it’s intentional. It’s fraud.

    Now if only we could prove what we all already know…

    Hey Ben, maybe it’s time to get a C-level mole in a major wireless company to find out the truth about overbilling people!

  37. legerdemain says:

    @Crazytree: Here’s the part I don’t get about your position on this. Wouldn’t it be:

    “I think you’re committing mail fraud, and that’s criminal. Now that you know, if you don’t stop harming me by committing an illegal act to my detriment, I’ll report it.” = not extortion.

    “I think you’re committing mail fraud, and that’s criminal. If you don’t give me a bajillion dollars, and also a shrubbery, I will report it.” = extortion.

    My point: Is it really extortion if your demand is only that the other party stop performing the act that you claim and interpret as criminal? It seems like telling a party to stop actively harming you in a criminal manner, or else you’ll report them is a far cry from telling a party that you’d like to be enriched by them, or else you’ll report them.

  38. godai says:

    @crazytree: It depends.

    Cingular misbills.

    This isn’t illegal as far as i know.

    Customer challenges bill.

    Cingular goes no way give me money.

    back and forth it goes.

    At what point does a mistake become negligence?

    Assuming the mistake was actually in cingular’s fault, once they refuse to correct the mistake and continue trying to collect the money, is when it should probablky start actually counting as mail fraud. Alot of asusmptions there though.

    And of course, i’m not a lawyer. :)

  39. markwm says:

    Ummm… I’m not a lawyer, but wouldn’t the company have to knowingly and willfully demand money it was not entitled to for this to be mail fraud? If they really and truly feel they are owed that money, and have a billing structure in place that can support their claim, how could it be mail fraud? That’s not to say they’re right, just that it was an error and not fraud.
    My issue with this is that threatening legal action where not appropriate is it is a waste of judicial resources and demeans legitimate cases involving the charge.

  40. bdgbill says:

    I wish Sprint would offer to refund “all the money I had ever paid them”

    I would take a two week vacation in Europe, buy a 60″ plasma tv and maybe pick up a used corvette with whatever was left.

  41. latemodel says:

    Cingular would be guilty of fraud if they had a billing practice of overcharging. Like many issues with the Law, you would have to know if there was any intent to purposely overcharge, which would require inside information from a Cingular employee. I dont think the customer can be guilty of extortion because she does not control the criminal prosecution, the USPS Police would make that decision.

  42. Candyman says:

    @Crazytree

    You might be a very successful, well paid lawyer, but I have a feeling your paralegals do all the real work. You know, that stuff between the client meetings and the court appearances?

    Now, I admit it’s been over ten years since I was a paralegal, but I still remember a couple of things you seem to be forgetting.

    First, for a precedent to be binding it has to match the case before the court in ALL key facts. Since INTENT is a necessary element of extortion, and the case found that the alleged victim was guilty of extortion, I can assume the blackmailer had INTENT TO EXTORT. That’s a key fact that would have to be proven in this case for your analysis to be valid.

    Second, you speak as if a single precedent fully defines any area of law. Precedents are altered, modified and clarified by later case law. Even IF this lady were found guilty based on your precedent, that’s nothing but an opportunity for a later court to clarify the precedent upon her appeal.

    Lastly (and this is more of a criticism of your attitude than your argument) in your present field of law, you may very well be giving your clients the safest advise to avoid this sort of threat. But, if one of your clients had gone ahead and done so, would you throw up your hands and say “shouldn’t oughta done that?”

    A lawyer’s job isn’t JUST to advise about the law, it’s sometimes also to challenge the law, or at least an unjust application of the law. Us laypeople kind of count on you guys to do that for us.

    A little more thinking outside the box and a little less quoting the lawbooks might have been more appropriate here, is all I’m saying.
    :-)

  43. Hoss says:

    We have little reason the believe that this occured. No names, no letter, no first hand account…we don’t even know if “all the money she has ever paid them” is more than a deposit”.

  44. vladthepaler says:

    @Papa Midnight: Refunds are not income. You don’t have to explain refunds on your tax return.

  45. ulrike007 says:

    Info. about what constitutes mail fraud and the actual statutes are cleverly concealed on the Internet. The USPS has great info. on this as well as pretty clear examples (e.g. invitations to phony work-at-home schemes and the like).

  46. Landru says:

    @Crazytree:

    Crazytree – you may be right about extortion being illegal, but it doesn’t at all apply here. All she said was that they were commiting mail fraud. Telling someone that they are commiting a crime and you aren’t falling for it is not illegal.

    What a goofball.

  47. Geekybiker says:

    I suppose if someone now writes their celluar company with the hope that they will refund them all the money they’ve ever paid *that* will be extorting.

    I dont see how notifying someone of intent to file criminal charges or suit if they dont stop wrong doing would be extortion. Heck, say someone owes me money. Even if I say “Pay me my money, or Ill sue” I can’t see that being extortion.

  48. LTS! says:

    Somehow I don’t believe that this is mail fraud, regardless of the argument that appears to be ongoing on what the statutes of California are.

    It’s a billing error, which happens. The customer pointed out the error and I am sure in the way she did she just got on someone’s bad side who decided to end her contract with Cingular. There is an overwhelming lack of information or clarity on the issue which opens much speculation (but just speculation)

    By the way, for everyone who’s weighed in on the matter, there’s an overwhelming problem with your arguments concerning California. You’re all right, and all wrong. Go argue the case in front of a judge and use up the entire appeal process and THEN you can prove your point. Until then it’s an interpretation (as is everything these days) and can be argued until you are all dead or bored.

  49. 12monkeys says:

    @Crazytree: Must be a wannabe law student that just learned to read.Should read deeper into the case.

  50. AtOurGates says:

    @TEXASSCOUT: Yeah, I was wondering about that. Should I switch all my bills back to paper billing from online billing so that I have this extra layer of protection?

  51. mrrbob says:

    I can buy the part about the woman accusing them of mail fraud but NOT the part about the CSR offering to refund everything she ever paid. That is an obvious exaggeration. AND a sort of nice fantasy…

  52. BrandonAbell says:

    Please don’t encourage people to accuse others of crimes they didn’t commit. Overcharging somebody isn’t fraud if it’s unintentional and if they take reasonable measures to prevent incorrect charging. Crazytree is right, guys. . .

    Now if Cingular actually committed fraud, and there is proof (just make sure you know what “fraud” actually means according to the law — it’s often not the same as the Webster’s def.), then go right ahead and let them know that you’re going to report them. Otherwise, if you carelessly throw around accusations against somebody, lookout for civil (libel) and criminal (extortion) charges against *you*.

    There are reasons why people have to study the law for at least three years and pass an exam to become a lawyer.