PhonePeople changes the rules and holds customer numbers hostage

I was emailed the following story by a customer of PhonePeople.comphone people 800 voicemail service

“I began service with PhonePeople in December 2006. I have become unhappy with their service because my clients repeatedly get a busy signal when dialing my toll free numbers or even worse, it takes 10-15 seconds before you even hear a ring when dialing. I decided to switch my service, and now they don’t want to release my 800 numbers. I was informed that I could only switch if local law allowed it, and if they found out I was prohibited by the local law, I would be forced to give back the number and a $500 fine. When I asked where I could find information on local laws, they said they did not know.

I was later informed that I could not port out my number because I had not ported it in. They stated that I was bound to the new terms of service agreement [that went into effect after I signed up] because at the bottom of the old agreement it stated that I would agree to any changes made in the future. I asked for my old terms of service agreement, and they said they did not have a copy of it. Then I asked how they could prove I agreed to any future changes if they didn’t even have a copy of it.

I was put on hold for a while, only to be informed that they understood my concern and there was nothing they could do, stating that even though I didn’t ‘sign’ any agreement that they had my IP Address when I placed the initial order. I replied that they obviously did not understand my concern, and that I would have to file an informal complaint with the FCC. They said to go ahead and file a complaint with the FCC because they were not technically a phone carrier, and thus not liable legally. I offered to pay to switch the numbers, but they said it was not possible.”

The original Phone People Terms of Service:

PhonePeople was bought by j2, the owners of Onebox on May 15th, 2008. I researched this a little bit and found that PhonePeople.com did allow customers to transfer numbers out. Using Archive.org’s WayBackTimeMachine I located a copy of the December 02, 2007 Terms of Service for Phonepeople.com. It did say customers “may request a transfer of your Number to another company, but only provided that you have paid all fees due under your account, and the number is still in service with us.”

Their agreement does in fact say that they can change it in any way they want at any time. “This Agreement, including fee schedules and rate plans, is subject to change and may be modified at any time, and any such modification shall be effective immediately upon posting of the modified agreement at http://www.phonepeople.com/agreement.aspx”

The new Phone People Terms of Service (courtesy of the new owners j2 ):

Next I looked up the current terms of service and found a very different story. To be honest this is the most amazingly one sided, vicious and punitive wording I’ve ever seen. I don’t think it’s possible to make this any worse for the customer. I can’t believe that anyone in their right mind would EVER agree to this type of thing or that a big company would ever try to do this to their customers. It’s just INSANE!! That’s just my personal opinion, but this post isn’t based on opinions, it’s based on the facts and their own documents.

a. Ownership of Phone People Number

YOU UNDERSTAND AND AGREE THAT YOU ARE NOT THE OWNER OF ANY PHONE PEOPLE NUMBER ASSIGNED TO YOU BY THE COMPANY. OWNERSHIP OF ANY SUCH PHONE PEOPLE IS VESTED SOLELY IN THE COMPANY (AND YOU ARE GIVEN A REVOCABLE LICENSE TO USE SUCH IN ACCORDANCE WITH THIS AGREEMENT). YOU ARE EXPRESSLY PROHIBITED FROM CAUSING OR ATTEMPTING TO CAUSE THE PHONE PEOPLE NUMBER ASSIGNED TO YOUR ACCOUNT TO BE TRANSFERRED TO ANY OTHER SERVICE PROVIDER, TELEPHONE CARRIER OR ANY OTHER PERSON OR ENTITY (ALSO SOMETIMES REFERRED TO AS “PORTING” THE TELEPHONE ). IN THE EVENT YOU ARE FOUND TO HAVE VIOLATED THIS PROHIBITION YOU AGREE TO IMMEDIATELY RETURN THE PHONE PEOPLE NUMBERTO THE COMPANY AND PAY THE COMPANY AN AMOUNT EQUAL TO $500 (OR THE EQUIVALENT IN LOCAL CURRENCY). YOU AUTHORIZE THE COMPANY TO CHARGE YOUR ACCOUNT CREDIT CARD OR TAKE ANY OTHER MEASURES REQUIRED TO COLLECT THIS PAYMENT. YOU AGREE THAT THIS PAYMENT REPRESENTS LIQUIDATED DAMAGES REFLECTING A REASONABLE MEASURE OF THE ACTUAL OR ANTICIPATED HARM AND DAMAGES CAUSED TO THE COMPANY FROM SUCH VIOLATION IN LIGHT OF THE DIFFICULTIES OF PROOF OF THE COMPANY’S LOSS AND THAT THIS PAYMENT IS NOT A PENALTY. SOME NON-US JURISDICTIONS DO NOT ALLOW LIMITATIONS TO BE PLACED ON YOUR RIGHT TO PORT THE PHONE PEOPLE ASSIGNED TO YOU, SO SOME OF THESE LIMITATIONS MAY NOT APPLY. HOWEVER, EVEN IF IN YOU ARE ENTITLED TO PORT SUCH PHONE PEOPLE NUMBER, YOU UNDERSTAND AND AGREE THAT IT MAY NOT BE POSSIBLE TO DO SO, E.G. WHEN NO PORTING AGREEMENT EXISTS BETWEEN YOUR AND OUR TELEPHONE CARRIER OR FOR ANY OTHER REASON.

b. Porting Policy

IF YOU “PORTED IN” A NUMBER IN CONNECTION WITH YOUR USE OF SERVICES OR ARE ENTITLED TO “PORT OUT” A PHONE PEOPLE UNDER LOCAL LAW, YOU MAY “PORT OUT” THAT UPON TERMINATION OF YOUR ACCOUNT ONLY IF YOU SATISFY THE FOLLOWING REQUIREMENTS: (i) YOU PROVIDE WRITTEN NOTICE TO THE COMPANY OF YOUR INTENTION TO “PORT OUT” THE TELEPHONE ASSOCIATED WITH THE TERMINATED PHONE PEOPLE ACCOUNT NO LATER THAN THIRTY (30) DAYS AFTER THE DATE OF TERMINATION OF YOUR PHONE PEOPLE ACCOUNT (THE “PORTING NOTICE PERIOD”); (ii) YOUR NEW TELEPHONE CARRIER PROVIDES OUR TELEPHONE CARRIER WITH A DULY EXECUTED PORTING REQUEST PRIOR TO THE EXPIRATION OF THE PORTING NOTICE PERIOD; AND (iii) PRIOR TO THE EXPIRATION OF THE PORTING NOTICE PERIOD, THE COMPANY HAS RECEIVED AN ADMINISTRATION FEE TO COVER ITS COSTS ASSOCIATED WITH PROCESSING THE PORT IN AN AMOUNT OF (A) $40 (OR THE EQUIVALENT IN LOCAL CURRENCY) IF YOU “PORTED IN” THE TELEPHONE OR (B) THE LESSER OF $100 (OR THE EQUIVALENT IN LOCAL CURRENCY) OR THE MAXIMUM PERMITTED UNDER LOCAL LAW IF YOU ARE ENTITLED TO “PORT OUT” A PHONE PEOPLE UNDER LOCAL LAW. YOU HEREBY AUTHORIZE THE COMPANY TO CHARGE YOUR CREDIT CARD IN THE APPLICABLE AMOUNT OR TO OTHERWISE ARRANGE TO MAKE THIS PAYMENT TO THE COMPANY WITHIN THE PORTING NOTICE PERIOD. IF YOU FAIL TO SATISFY THESE REQUIREMENTS, THE TELEPHONE NUMBER YOU “PORTED IN” WILL BECOME THE SOLE AND EXCLUSIVE PROPERTY OF THE COMPANY.

Conclusion: It’s not just worth it to get your number from an independent service and transfer it to whatever company you want to use it with, it’s vital! Oh and you better pray that j2 and Onebox doesn’t buy your company!

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    19 Comments »

    Bill Quimby (666 comments.) says:
    April 16, 2009 at 4:38 pm

    Note to Phone People: I’ll be glad to fight you on this all the way to the FCC or in court because I know your terms won’t hold up. They effectively violate the regulations requiring portability. Your terms amount to a violation of the portability rights and you’ll not only deserve, but even if you win it’ll give you a big black eye at the best and could really hurt your business dramatically (which it should).

    I’ve already had a couple lawyers inquire about the potential for a class action law suit and the more you fight this the stronger you make that case. You can put inappropriate stuff in your terms but enforcing it against someone publically is clearly a lose-lose scenario for you.

    Bill Quimby!

    Go ahead and keep yanking them and I’ll be glad to show the world how you operate!

      Shari S. says:
      April 23, 2009 at 2:38 pm

      Phone People are horrible. They are holding our 3 toll-free numbers hostage saying that they “own” the numbers. They say that we can only port the numbers away if we pay them a fee per number. This is called “hoarding” and is illegal. I wish someone at the FCC would take a sharp look at Phone People’s blatantly unlawful practices.

        Alan says:
        April 28, 2009 at 1:21 am

        Not sure I understand these comments. According to your own posts on this site, you can’t really own a toll-free number or sell one to begin with. The FCC owns these numbers and a RespOrg provides service. PhonePeople doesn’t sell phone numbers, they sell a monthly ‘virtual office’ or ‘pbx’ service.

        So you are accusing PhonePeople of illegal activity that they can’t do to begin with. Again, they don’t sell numbers (that would be illegal) they provide a hosted pbx (according to their site). Seems pretty clear to me.

        And speaking of, are you a RespOrg Bill Quimby? It does stand for ‘Responsible Organization’ and if the FCC says PhonePeople is one, then I guess they are doing something right…

          Bill Quimby (666 comments.) says:
          April 28, 2009 at 10:54 am

          First of all Alan, (not the commenter’s real name) being a Resporg or a responsible organization, despite the name, doesn’t make you responsible or require you to be responsible in the slightest. This is a topic of another article but in my opinion, but there’s nobody imposing any type of responsibility on resporgs at all. I don’t think I really have to go into examples in this comment. Suffice it to say that you’re assumption that someone is behaving responsibly simply because they are a responsible organization is in correct.

          If you get a toll free number from AT&T you own the end user rights to that number and have the right to change the ring to number and the company getting the calls there. Portability began in 1993. Your ability to TRANSFER a number to another company is what keeps them honest. Because if they don’t do a good job or something better comes along (or the phone company gets bought by another company [such as j2] and goes down hill) you have the right to leave if they don’t provide good service.

          Unfortunately some enhanced voicemail services have gotten very clever and they redefine their service to be a voicemail service. They still sell it as toll free service, but by claiming that they don’t technically provide toll free service that the rules of portability don’t apply to them. It doesn’t matter that the customer going to them is looking for a toll free number and thinks their getting a toll free number.

          This post never mentioned the word sell, yet you are trying to change the point of the post into that so that YOU can avoid the question of portability. I say you, because this post is clearly written by someone from PhonePeople. I won’t go into the details but it originated at a j2global server. I wanted to answer it because I’m not dodging the question or ducking anything at all here. I left them a comment so it’s no surprise that they answered or that they wouldn’t use their own name.

          If you went to a hosting company and got your domain name through them how would you feel if the hosting company said when you wanted to leave that you don’t own the domain name you’ve built your business on, that they do. They could make up any excuse in the book but it would be completely wrong. It’s even worse in this case because the business advertising the number has no way of looking up the ownership information to see that they don’t own their number. And in the case above, he did own his number with the company originally, but then the hosting company he was using was bought by another bigger hosting company (j2) who re-wrote the rules without telling anyone and made themselves the owners of all the customer numbers.

          That’s a fair analogy. PhonePeople has nothing at all to gain by refusing to release numbers from customers that don’t want to stay with them. It’s not that the number is intrinsically valuable or that it hurts them to give up a number. There’s no moral or business justification for not allowing or overly restricting portability. It’s purely a punitive measure to punish anyone that wants to leave or prevent them from being able to do so.

          I’m sorry if you think pointing out what you’re doing that’s bad for the customers and even bad for the industry is wrong. If you think any customer looks at that and thinks that I’m being a jerk for telling people what you’re doing as you said in the other comment, you’ve got to have your head examined. And honestly I don’t care in the slightest. What you’re doing is absolutely wrong and I’m going to continue to point that out as loudly and honestly as I can, until you stop it. So get used to it. Someone has to stand up for the customer and help stop a big company from abusing them.

          Bill Quimby

          If you agree with this add your own comments here too. PhonePeople is obviously reading this.

          I should also mention that they tried to pressure Shari into trying to take down her comments. And she did file a complaint at the FCC who was receptive to it, so that may be another way to go if you’re running into this same attitude and issue.

            Bill Quimby (666 comments.) says:
            April 30, 2009 at 1:16 am

            Here’s a complaint on an independent complaint board and their response. If you’re concerned or upset about this, leave us a comment here and/or go to http://www.complaintsboard.com/complaints/kinetic-energy-c193510.html#c303779 to add a comment or just give our comments there a thumbs up.

              Anonymous says:
              May 1, 2009 at 4:25 pm

              About a year ago, our company engaged Phone People to procure several toll-free numbers for us from the central repository of toll-free numbers “SMS 800″ and thereafter provide us with monthly telephone service. Given the poor quality of service we received, we recently attempted to port our toll-free numbers away from Phone People. Per this FCC Consumer Fact Sheet on Portability http://www.fcc.gov/cgb/consumerfacts/numbport.html,
              our understanding was that “once a valid porting request has been made, the old carrier cannot refuse to port a number”.

              We found a new toll-free service who, at our request, made a valid porting request to Phone People, which was rejected unless we first paid them a fee. Phone People also threatened us with a $500 penalty if we tried to take our toll-free numbers away without their permission. Phone People rejected several port-out requests made directly by us and in subsequent correspondence, in addition to trying to pressure us into paying a fee prior to porting, Phone People additionally tried to strong arm us into agreeing “not to file any complaints or take any further action in relation to this matter” (Yes – they actually wrote that and we have saved it all as evidence!). Given that what they were doing was in clear violation of federal telecommunications law, we refused which resulted in Phone People holding our toll-free numbers HOSTAGE!

              Phone People referred us to Section 21(a) in their Customer Agreement:

              - Ownership of Toll-Free Numbers which reads: “YOU UNDERSTAND AND AGREE THAT YOU ARE NOT THE OWNER OF ANY PHONE PEOPLE NUMBER ASSIGNED TO YOU BY THE COMPANY. OWNERSHIP OF ANY SUCH PHONE PEOPLE IS VESTED SOLELY IN THE COMPANY…”).
              - Portability of Toll-Free Numbers which reads: “YOU ARE EXPRESSLY PROHIBITED FROM CAUSING OR ATTEMPTING TO CAUSE THE PHONE PEOPLE NUMBER ASSIGNED TO YOUR ACCOUNT TO BE TRANSFERRED TO ANY OTHER SERVICE PROVIDER, TELEPHONE CARRIER OR ANY OTHER PERSON OR ENTITY (ALSO SOMETIMES REFERRED TO AS “PORTING” THE TELEPHONE)”.

              Regardless of what Phone People put in its Customer Agreement, these terms obviously violate federal law and are unenforceable. We have filed a detailed complaint against Phone People with the FCC and the California Better Business Bureau. (FYI- Phone People’s current Better Business Bureau rating is a C- due to all the complaints about them.) We have also contacted a number of members on the US House of Representatives Sub-Committee on Telecommunications and have asked them to enact legislation to require toll-free telephone service companies to provide their customers with the FCC Consumer Fact Sheet on Portability and also to have a clear link to this FCC publication on their website at all times.

              So in conclusion, we are sorry that we ever signed up with Phone People and would caution potential customers to really look at all of the information that other customers have posted about them here and elsewhere on the internet.

                Tess A. says:
                May 7, 2009 at 4:20 pm

                We seriously considered PeoplePhone.com for our toll free number, but no longer. I have printed out the comments here and have sent them on to my business partner. Thank you, Bill Q., for your vigilence. I appreciate being spared a costly lesson.

                It seems to me that all PeoplePhone.com has to do is step-up their customer service professionalism and improve their service product to keep their customers happy.

                Prospective clients do not try a busy number a second time. When I am the prospective customer, I know I rarely call back a busy line and if I experience a connection delay, I get the impression that the company is not technologically up to par or I am being routed overseas. That’s when I hang up.

                So…. I guess back to the board with a 800# service provider.

                Tess A.
                San Francisco, CA

                  Lawrence says:
                  May 7, 2009 at 9:13 pm

                  I wrote this comment over on ComplaintsBoard.com but feel it is important to post it here since this is a place where consumers come to find out more about which telephone companies are reputable. This comment was reposted at PhonePeople is INTENTIONALLY misleading!

                  ________________________
                  Here is the key to Phone People’s scam. You sign up for their service because you need a Toll-Free Number and you need them to get you one because only a “RespOrg” can get a toll-free number from the central pool at SMS800. Then, Phone People buries this sentence in their Terms of Service: “YOU UNDERSTAND AND AGREE THAT YOU ARE NOT THE OWNER OF ANY PHONE PEOPLE NUMBER ASSIGNED TO YOU BY THE COMPANY.” You unwittingly agree to it because when you emailed them to get service, you said “I need a toll-free number”, or something to that effect, thinking that that would result in YOU getting a toll-free number that you own and can use forever. But that is where you are wrong because when Phone People gets “your” toll-free number, they register THEMSELVES as the “Subscriber of Record” meaning that THEY OWN THE NUMBER! And then, they can merrily hold you hostage.

                  Funny that Phone People doesn’t bother to mention this important “Subscriber of Record” phrase in their Terms of Service. However, in their parent company’s (j2 Global Communications) most recent 10-K (http://apps.shareholder.com/sec/viewerContent.aspx?companyid=JCOM&docid=6438267) j2 knows all about it! In fact, on p. 10 of their 10-K, they include a Risk Factor in bold which states that “Our business could suffer if we cannot obtain or retain telephone numbers”. Meaning their business will suffer if they cannot continue to hold customers’ toll-free numbers hostage. Nice!

                  In the paragraph under that heading in the 10-K, they even go so far as to proudly state that they are “the customer of record for all of our U.S. telephone numbers” but admit that “from time to time, certain U.S. telephone carriers illegally inhibit our ability to port numbers or illegally port our telephone numbers away from us to other carriers”. It is interesting that they DON’T BOTHER TO TELL THEIR CUSTOMERS in their Terms of Service that they have designated themselves as the “Subscriber of Record” for the Customer’s toll-free numbers but then they get miffed if people stand up to them and port the toll-free numbers away. In fact, Phone People gets downright nasty at this point and starts threatening $500 penalties, disconnection of your toll-free numbers, slamming the numbers back to Phone People where they can disconnect your service and disrupt your business, etc..

                  The “Subscriber of Record” concept is a small but very important point, my friends, as it is the reason why Phone People feels it is able to blatantly subvert the FCC Rules on portability. If you don’t believe me, ask Phone People point-blank before signing up that if you set up an account with them and ask them to procure a toll-free number for you, who will be the designated “Subscriber of Record”??

                  Gotcha Phone People!

                    William says:
                    May 12, 2009 at 3:06 pm

                    I have recently been referred to the PhonePeople to provide service for our company. After finding out they were purchased by j2, it was definitely not going to happen.

                    Recently, they purchased the services provided by SmartFax and FaxMicro and merged them into fax.com. Suddenly our toll free fax numbers were locked in and untransferable, and our unlimited service plan eliminated.

                    My recommendation, avoid any j2 owned companies!

                      Johnnie says:
                      October 4, 2010 at 6:33 pm

                      We have been using them for a few years with no problems. In fact just this week I spoke to them about acquiring some 855 numbers. When I asked them about portability they told me I could move them whereever I wanted after 3 months of service. The service would be parking at $4.00 per month. Glad I never made a move on that after reading this stuff.

                        Asher says:
                        November 28, 2011 at 4:04 pm

                        Very bad company to deal with, Service sucks!! and if you try to disconnect, you will be on hold for 40 minutes.

                          Richard says:
                          December 1, 2011 at 10:33 am

                          Phonepeople has other problems including poor customer service, shady billing, and shady cancellation policies.

                            Wendi says:
                            February 3, 2012 at 5:33 pm

                            Today I got a call from a customer regarding my 800 number, also a PhonePeople number. It isn’t working. It doesn’t connect, doesn’t ring, etc. I tried to find a customer service number to reach at Phone People…there isn’t one. You can only file complaints via an electronic form. They told me they were working on the issue. I want to leave now, as this makes no sense to stay with a company that can’t even shoot an email out to their customers when the system is down to get a heads up, I had to hear it from a customer! I did fill out the complaint form, and was provided a quick response (that was nice), but it never gave me a time when it would be corrected, and when I asked for them to reach me directly when it was fixed, the ignored the request all together.

                            Any updates on what to do to get someone at the company to say hey…I want to move my number somewhere else? Or, are there any recommendations on where to get decent service and have them help with the transfer of the number? Any updates on if Phone People are releasing those numbers yet? Class action sounds good to me!

                              Bill H. says:
                              February 3, 2012 at 10:32 pm

                              Its bad enough about the delay my customers get when they call my number but now not even a ring?? I’m fed up with this horrible service I get from this cheesy 800 number company and the customers I’m missing because of it. PISSED OFF

                                Phil DeFranco(new comment) says:
                                March 25, 2014 at 3:24 pm

                                I have/had a Phone people 800 number and I’m getting 4 calls a day/night at all hours from a fax machine (i think) on that line. There is never anyone on the other end. I have no way of contacting them to end my service. I have no way to contact anyone either by phone,e-mail or their web site which has been down forever. What can I do? Thanks

                                  Smithd621(new comment) says:
                                  May 1, 2014 at 6:54 pm

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                                    Pharmb560(new comment) says:
                                    May 2, 2014 at 3:05 pm

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                                      Smithd441(new comment) says:
                                      June 3, 2014 at 1:18 am

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                                        Smithk622(new comment) says:
                                        June 5, 2014 at 10:55 pm

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                                          8 pings

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                                          April 28, 2009 at 2:26 pm

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                                            When is a Toll Free Service not a Toll Free Service? at TollFreeNumbers.com says:
                                            April 30, 2009 at 12:02 pm

                                            [...] recently complained at complaintsboard.com that PhonePeople is holding their number hostage. Here’s the PhonePeople [...]

                                              PhonePeople is INTENTIONALLY misleading customers! at TollFreeNumbers.com says:
                                              May 7, 2009 at 10:06 pm

                                              [...] was left as a comment on PhonePeople changes the rules and holds customer numbers hostage by “Lawrence”. This is a seperate point and clearly documented so it seemed to need [...]

                                                PhonePeople is INTENTIONALLY misleading! at TollFreeNumbers.com says:
                                                May 7, 2009 at 10:07 pm

                                                [...] was left as a comment on PhonePeople changes the rules and holds customer numbers hostage by “Lawrence”. This is a seperate point and clearly documented so it seemed to need [...]

                                                  J2 takes over SmartFax and FaxMicro at TollFreeNumbers.com says:
                                                  May 13, 2009 at 7:35 am

                                                  [...] you hostage and refuse to allow anyone to transfer their numbers. We’ve seen this before when J2 took over Onebox. Toll free numbers are supposed to be portable and your ability to transfer the numbers is what [...]

                                                    Onebox charges Vindictive Fees! at TollFreeNumbers.com says:
                                                    September 1, 2009 at 9:54 am

                                                    [...] PhonePeople holds customers hostage at TollFreeNumbers.com Why is ownership of your toll free number so Important? j2 doesn’t want me to tell people what they’re doing Big Companies behaving badly (No Ratings Yet)  Loading … [...]

                                                      Onebox charges unfair fees at TollFreeNumbers.com says:
                                                      September 1, 2009 at 10:37 am

                                                      [...] they select at any time, we are going to charge customers that transfer their number to Onebox, PhonePeople and eVoiceReceptionist an additional $40 to release a number to any J2 company. J2 thinks their fee [...]

                                                        USE A SEPARATE FAX SERVICE AND BRING YOUR OWN # at TollFreeNumbers.com says:
                                                        December 6, 2010 at 2:22 pm

                                                        [...] as toll free numbers, and if you get your own number and transfer it over, they won’t be able to hold you hostage by your phone number. And a lot of people program your fax number into their fax machine so your fax numbers can be very [...]

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