FCC Proposes Rules to Combat Phone Cramming

The U.S. Federal Communications Commission has proposed new rules designed to make it more difficult for telephone carriers and other companies to insert mystery fees onto customers' phone bills.

The U.S. Federal Communications Commission has proposed new rules designed to make it more difficult for telephone carriers and other companies to insert mystery fees onto customers' phone bills.

The proposed rules, released by the FCC Tuesday, would require landline telephone carriers to notify customers at the point of sale and on each bill of the option to block third-party charges on their phone bills. The proposed rules would require both landline and mobile carriers to include notices on their phone bills and websites saying customers can file complaints about mystery fees with the FCC.

The commission's vote to launch a rulemaking proceeding is part of a larger effort to crack down on so-called cramming, the practice of sneaking charges onto customers' phone bills.

Many customers don't notice the crammed charges, the FCC has said. Crammers often avoid detection by charging a small amount -- sometimes as little as US $1.99 to each customer -- or describing charges in a way that make them appear to be from the phone companies for legitimate services, the FCC said.

The FCC has estimated that 15 million to 20 million U.S. households each year have cramming charges on their landline phone bills.

Late last year, the FCC approved a settlement with Verizon Wireless over US$50 million in mystery data fees. Verizon Wireless agreed to refund the overcharges to its customers and made a voluntary $25 million payment to the U.S. Treasury.

Last month, the FCC issued four notices proposing $11.7 million in forfeitures against four smaller telecom companies accused of widespread cramming.

"Cramming happens when a company puts a charge on your phone bill for a service that you never ordered and almost certainly don't need," Joel Gurin, chief of the FCC's Consumer and Governmental Affairs Bureau, wrote on the FCC blog. "These fake charges can be for services that sound like they're part of your phone service, like long distance service, or they can be for things as diverse as horoscopes, psychic hotlines, or diet plans."

In many cases, telephone carriers offer a service for customers to block third-party charges, but they don't let customers know until they've filed a cramming complaint, Gurin wrote.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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