VII. HIGH REFUND RATE FOR OSP BILLINGS

As part of its investigation, Staff reviewed the California billing revenues and refunds associated with OSP. During its operations, OSP generated over $8 million in total California revenue from its collect call billings.⁹² Of that amount, OSP, either directly or indirectly through its billing agents and the LECs, issued approximately
$2.9 million in refunds to California customers from August 2007 through January 2011.⁹³ As of January 2011, however, customers continued to request refunds for OSP billings from TBR.⁹⁴ Thus, OSP had an average refund rate of approximately 35%.

In 2009 alone, OSP experienced an annual refund rate of 53%.⁹⁵ With regard to a monthly refund rate -except for the month of August 2007- OSP's monthly refund rate ranged from 14% to 43%.⁹⁶ As TBR noted, operator service providers, such as OSP, should only experience a 4% to 6% refund rate; a refund rate beyond this range would raise suspicion as to the presence of fraudulent activities.⁹⁷

⁹² Ibid. at 23.

⁹³ Ibid. at 28.

⁹⁴ Id.

⁹⁵ Ibid. at 23.

⁹⁶ Id.

⁹⁷ Ibid. at 27-28.