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Klobuchar Urges FCC to Crack Down on the "Cramming" of Extra Charges on Phone Bills

November 10, 2010

MINNEAPOLIS – U.S. Senator Amy Klobuchar is urging the Federal Communications Commission (FCC) to take more aggressive action to crack down on “cramming,” the practice where a third-party adds unauthorized, misleading or deceptive charges to a person’s phone bill.
 
Klobuchar serves on the Senate Commerce Committee, which oversees the FCC and telecommunications issues.  Joining Klobuchar at a news conference were Prentiss Cox, a consumer protection expert, and Mark Gileczek, a Minnesotan who was a victim of cramming. 

Cramming comes in many forms, but it typically ends up with “mystery charges” buried in the details of a person’s phone bill.  Klobuchar explained that cramming has been on the rise because of the proliferation of ever-more sophisticated “smart” cellphones that people use for a variety of functions, including online purchases.

Crammers trick consumers by pretending to offer something for “free,” but then applying charges to the phone bill.  The monthly charges are listed with vague descriptions, so consumers often do not detect the unauthorized charges for months.

“New technology offers more convenience for consumers,” said Klobuchar.  “The problem is it also offers new opportunities for crooks.  That’s why the FCC needs to be a vigilant cop on the beat, protecting consumers.”

Klobuchar said she is sending a letter to FCC Chairman Julius Genachowski, urging his agency to be more aggressive in both preventing and stopping this fraudulent practice.  (Text of the letter is below.)

Klobuchar said she wants the FCC to consider adopting new rules that would require phone bills to clearly identify third-party charges, including a clear description of the services being charged.  She also wants the FCC to look at establishing clear procedures that companies must follow to authenticate that a consumer has, in fact, agreed to purchase a service that will be charged on their phone bill. 

Klobuchar added that phone companies also have a responsibility to crack down on crooks who are abusing their access to phone bills for fraudulent purposes. 

“Phone companies need to do a better job protecting their customers by making sure they don’t get charged for services they never authorized,” Klobuchar said.

Klobuchar offered some tips for consumers to protect themselves:

- Carefully review your phone bill each month.  Look for “mystery charges” that you don’t recognize, or charges with vague descriptions like “service charge” or “monthly fee.”  Because many people now have automatic bill payment, they don’t always review the details of the phone bill.

- Always read the fine print on any offer. Contest entry forms, product coupons, checks and other promotional materials could include an agreement to buy a service that will be charged to your phone number. Be cautious about anyone who offers you a “free” service, such as a no-cost website or Internet yellow page listing.  If an offer sounds too good to be true, then it probably is.

- Immediately report a suspected cramming charge.  If you find a suspicious charge on your phone bill, immediately call the company listed for that charge. Ask for an explanation of the charge, and request an adjustment to your bill for any incorrect charge. You should also call your phone company and explain your concerns about the charge and ask your phone company the procedure for removing incorrect charges from your bill.  You are not responsible for charges that you never authorized.

- File a complaint.  If you don’t get a satisfactory response from your phone company or the third party, you should file a complaint.  In Minnesota, you can file a complaint with the Attorney General’s Office at 651-296-3353 or consumer.ag@state.mn.us . A complaint can be filed with the FCC at 1-888-225-5322 or esupport.fcc.gov/complaints.htm.  You can also file a complaint with the Federal Trade Commission (FTC) at 1-877-382-4357 or https://www.ftccomplaintassistant.gov/

- Stop all third-party charges.  Ask your phone company to block all third-party billing on your account.   This will prevent any company from adding charges onto your phone bill.

The full text of the letter to FCC Chairman Genachowski is below:

 
November 10, 2010

The Honorable Julius Genachowski
Chairman
Federal Communications Commission
445 12th Street, SW
Washington, DC 20544

Dear Chairman Genachowski:

I write to you today about the practice of cell phone “cramming.” As you know, cell phone cramming takes place when a company adds a phony and often recurring charge to an unsuspecting consumer’s cell phone bill.   Victims of cramming may have inadvertently signed up to receive a message – such as a horoscope or a joke – without realizing they would be billed each month.  Or a victim may simply be an unlucky target of a scam.  After a consumer from my state opened an indecipherable text message, the company that sent the message started charging him for a service that he never asked for, much less used.  These charges, which may go unnoticed for months, appear to be legitimate and are often hidden in a bill.  Once detected, cramming victims often find it difficult to stop the charges and get their money back. 

As I have written to you before, wireless consumers are increasingly faced with confusion over wireless charges and uncertainty about their bills.  Cell phone cramming and unauthorized third-party charges only add to this confusion.  In light of this increasingly prevalent and anti-consumer practice, I urge the FCC to crackdown on cell phone cramming and consider rules that would add transparency and clarity to third-party charges that appear on phone bills. 

I look forward to working with you on this issue.

 

Amy Klobuchar
United States Senator

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