IV. RESPONDENT OSP'S BILLING AGENT FINDS OSP BILLINGS WERE INVALID AND LIKELY FRAUDULENT
TBR states that it "has significant reason to believe that the billing transactions processed by OSP were invalid and likely fraudulent."40 During the approximate seven months that TBR acted as OSP's billing agent, it made several requests of OSP to confirm the validity of its billing transactions.41 When OSP did not or could not validate its billings, TBR investigated further.42 TBR found OSP submitted fictitious call detail records to validate its collect call billings.43 Moreover, OSP had an extraordinarily high refund or adjustment rate of over 20% at any given time, and, as of January 2011, has an adjustment rate exceeding 33%.44 However, according to TBR, operator service providers who provide collect call services, such as OSP, should only experience 4% to 6% total adjustments.45 Based on its investigation, TBR terminated billing and collection service for OSP on or about June 2009 and since then has held in reserve 100% of the funds paid to TBR on behalf of OSP.46
Nelson Gross, TBR's managing member, filed a declaration in mCapital, LLC et al. v. The Billing Resource, LLC; OSP Communications, LLC; and John Vogel attesting to TBR's investigation of OSP:
21. Over time, TBR made several requests of OSP to confirm the validity of its billing transactions, specifically, the billing of collect calls. As TBR's questions became more focused, OSP was unable or unwilling to respond appropriately. This prompted TBR to send a sampling of OSP's call records to Verizon for validation. [] The sample contained call detail records for collect calls that were supposedly dialed by a third party as a collect call to Verizon customers which purportedly resulted in the collect calls, and their associated charges, being accepted by said Verizon customers. These calls would have been transmitted through Verizon's switches to connect the call. Upon review of the call detail records provided by OSP, Verizon found that none of the call detail records were valid - meaning that none of the calls were never (sic) placed. The call detail records provided by OSP were fictitious.
In my professional opinion, this is conclusive evidence that the call detail records and their associated billing transactions were fraudulent.22. Suspicions were also raised by the fact that OSP was experiencing extraordinarily high adjustment rates. Operator service providers who provide collect call services, such as OSP, should only experience 4% to 6% total adjustments. OSP experiencing well over 20% in adjustments at any given time and, to date, has an adjustment exceeding 33%. These numbers are simply off the charts for any type of LEC billing service provider and more than enough cause to suspect fraud. OSP's adjustment rate is conservatively 4 to 6 times higher than should be. Further, OSP's dilution experience to date is at 39% dilution, way off the charts for a legitimate operator service provider and the net monetary proceeds generated by OSP's billing transactions are slightly more than half of what it should be.47
TBR states that customers continue to request refunds for OSP billings directly from TBR as well as from the LECs.48 As of January 24, 2011, TBR has refunded approximately $376,000 to customers as a result of OSP billings, while the LECs have made adjustments totaling over $544,000.49 According to TBR, "OSP has issued its own refunds to customers in an amount exceeding $2,030,000."50 Thus, OSP's refunds total approximately $2.9 million.
40 Ibid. at 27.
41 Id.
42 Id.
43 Id.
44 Id.
45 Id.
46 Ibid. at 25, 27.
47 Ibid. at 28.
48 Id.
49 Id.
50 Id.
