Friday, June 24, 2011

Phone Bill Cramming Under Fire

Ever heard of phone bill “cramming"? Even if you haven’t, most likely you have been subject to it, and you might not have even known it.

Cramming is any odd, extra charges that appear on your phone bill that shouldn’t be there. Now you should make sure that you haven’t gone over on your long distance minutes or sent one too many text messages, but if you know that such things are not the case, then you have been subjected to phone cramming.

This is something that phone service providers are making tons of money off of. If you don’t carefully watch your bill, they will slide charges in without you even noticing it. Fortunately, the Federal Communications Commission has decided to crack down on cramming and unauthorized charges. On Monday, June 20 the FCC chairman Julius Genachowski encouraged users to regularly examine their phone bills for any charges that should not be there. He also announced that there is a proposal that would allow for more transparency with cell phone and landline bills.

"Cramming is not only illegal, it erodes consumer trust in communications services," Genachowski stated while making an appearance at the Center for American Progress. "That makes it both unfair to consumers and unfair to most communications companies who do the right thing every day."

So what kind of charges is he talking about exactly, you might ask, and how much is it costing people? Well, Genachowski says that there have been reports to the FCC of charges including things like yoga classes, cosmetics, diet products and psychic hotline memberships. The charges usually range from $1.99 to $19.99, and many customers simply fail to notice them.

"In fact, according to a survey done for the Federal Trade Commission, only 1 in 20 cramming victims ever notice the charges," Genachowski said. "We estimate that the problem may affect up to 20 million Americans a year. People like a St. Louis, Missouri woman who was charged for 25 months of long-distance service she never authorized or used. When she protested the charges, the company sent her a copy of the form that she had supposedly used to authorize the service. It had a different name, address, email, and birth date than she did."

Genachowski noted that it can be a little difficult and slightly time consuming to examine each and every line of a phone bill; however, this is exactly what the companies are counting on. He continued to urge customers to scan their phone bills and if any unauthorized charges are found, the charges should be reported to the phone company. He continued saying that if the issue was not resolved by the phone company, users should file a complaint with the FCC via or 1-888-CALL-FCC.

Genachowski said there is a proposal that he will be presenting to the other FCC commissioners tomorrow that will "look at ways we can improve the disclosure and transparency on phone bills to help consumers ... look through the phone bills."
He went on to say that ideally the FCC will make it "difficult, if not impossible, for unscrupulous companies to get away with what they try to do."

Just last week the FCC proposed over $11.7 million in fines against companies which have been found to be utilizing cramming practices. These companies charged more than $8 million in fees for long distance services that were not authorized by the users. Genachowski said that this should serve as a warning to other companies who are engaged in cramming or thinking of doing the same thing.

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