Can you tell which network the transactions are settling through? I would doubt that it's Visa or MasterCard. More likely one of the ATM/POS networks like Star, Pulse or NYCE, which is why they're coming in as cash advances. If so, it's probably a violation of the rules of that network.
It may or may not be a choice by the telephone company. It may be either a glitch in their set-up with their merchant bankcard processor, or even something with the way your credit card BIN is flagged on that particular network.
I would suggest calling the telephone company to see if they're aware of credit card transactions going through as debit card payments. If you don't get a response,I would contact your card processor and let them know what's going on. They should be able to determine if it's a BIN problem or rule violation and hopefully get it resolved.
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