An ISP Scam Targeted Low-Income People Seeking Government Aid


Traxler’s scam lasted from May to August 2021, during which he “repeatedly engaged in conduct that violated federal cable fraud statute and Commission rules,” the FCC said. The proposed $ 220,210 confiscation penalty is “the legal maximum we can impose and reflects the scope, duration, severity and gravity of Cleo’s apparent violations,” according to the commission.

When Cleo applied to be part of the EBB program, the FCC initially told the entity that her application would be “denied because she doesn’t have enough information for approval.” But Cleo subsequently obtained FCC approval by offering documents that included copies of two invoices “with the customer’s credentials removed, which Cleo claimed was” due to the CPNI and privacy. “Cleo also stated to the FCC that “it had been providing high speed.” wireless internet ”to 500 customers.

Dozens of almost identical complaints

The FCC said it reviewed 41 complaints about Cleo, all of them “focused on the same type of allegations. According to the complaints, consumers searched the list of participating EBB Program providers through Universal Service websites. or the EBB Individual Status Program, the FCC website, or USAC [Universal Service Administrative Company] website and follow the links to Cleo’s website. The complaints alleged that Cleo accepted payment for the broadband services with discounts from the EBB program or the connected devices of these consumers electronically, did not ship the requested product or provide the requested services, and then did not offer refunds “.

The FCC interviewed eight of the consumers who filed complaints, living in Alabama, Arizona, Colorado, Illinois, Massachusetts, New York, Washington state and Wisconsin.

An Illinois woman asked Cleo for a laptop for $ 50 using the Venmo payment service. The woman received no response when she contacted Cleo to report that she never received the laptop, the FCC said. He then “tried to contact Cleo via social media (Facebook) and by phone, but Cleo didn’t respond and blocked her both on Facebook and by phone,” the FCC said.

A New York City woman “ordered a tablet, a laptop, a‘ Wi-Fi box ’and a discounted EBB access point on July 13, 2021 on Cleo’s website and arranged for payment of $ 108.94 on the website through PayPal, ”the FCC said. This consumer “told Bureau staff that she sent an email to Cleo when she did not receive the devices she requested and that Cleo’s staff was” rude to her and told her that they should not serve her “He said someone from Cleo told him to ‘read the fine print.’ He exchanged a few emails with Cleo until he finally stopped responding.”

Other whistleblowers similarly said that Cleo stopped responding to messages looking for information about the devices they never received. Some consumers were able to cancel payments made by credit card or PayPal.

“The eight consumers interviewed by the Office and other consumers who filed complaints with the FCC Consumer Complaints Center stated that Cleo did not offer the services or devices compatible with the EBB Program they requested, and the company he refused to issue refunds.Some consumers stated in their complaints that Cleo claimed she would sue them when they asked for a refund, “the FCC said.

Shady service conditions forbade refunds

The terms of service Cleo cited when he denied the refunds said the company “does NOT involve or will ever accept a refund, credits or any other refund for the service and money that will be returned to you.”

“Cleo Communications operates a PREPAID service. All services are sold as [sic] and without warranty. Under no circumstances does Cleo Communications represent any warranty or offer a refund of any kind for the services offered, “the terms state, according to the FCC. Cleo’s terms also said that” the surcharge through any customer bank is a breach of contract at any time and is subject to additional legal action up to, inter alia, legal action for minor claims for breach of contract for the amount disputed, all legal fees, court fees, court fees ‘lawyer, filing fees, interest at 9.9% and a contract breach fee of $ 300.00.’

Rude answers: “You will be taken to court”

The FCC document detailed incidents in which Cleo responded to customers requesting refunds by threatening to sue or sue for harassment:

As examples, on August 2, 2021, when a customer sent an email requesting a refund, Cleo responded, “[y]our desire to hide behind PayPal instead of contacting us. We will not send you any refund. We will not allow you to use your benefits as claimed. And he will be taken to court. Cleo Care. “

On August 10, 2021, when another customer requested a refund, Cleo replied, “Refund denied. Please refer to the terms of service that describe your rights and our obligations and rights that will be imposed. ‘has claimed your EBB. You will not. use our credit anywhere else and you will be issued an invoice and for collections. Cleo Collections. ” Cleo continued in a later email with this client saying, “[n]Read it before ordering. For now we will no longer communicate. Any additional email will result in harassment charges in Ohio. Cleo Legal. “

On August 12, 2021, Cleo told another customer, “[w]We do not ignore you, nor do we charge you. You have requested a refund and no refunds are given and it was reported and someone will decide [sic] one would be issued or not. Please see-kyty.xyz/terms.html. That’s what was sent to the FCC. With documents that you are and have not been ignored that indicate your claims [sic]. Cleo Legal Affairs.


This story originally appeared in Ars Technique.



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