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FOR IMMEDIATE RELEASE
October 24, 2011
McKenna calls on feds to protect consumers from “cramming”

Joins multistate coalition urging FCC to ban unauthorized charges on telephone bills, write stronger regulations on phone and wireless services

OLYMPIA – Washington State Attorney General Rob McKenna today called on the federal government to adopt stronger regulations to protect consumers against unauthorized third-party charges on telephone bills. In a filing with the Federal Communications Commission (FCC), McKenna and a multistate coalition of 16 other attorneys general urged the FCC to enact rules that prevent such charges, known as “cramming” – a fraud that a recent U.S. Senate report found costs consumers about $2 billion a year.

“Consumers are fed up with attempts to slip charges onto their phone bills in order to trick them into paying for services they never asked for and don’t need,” McKenna said. “Today we ask for the federal government’s help hanging up on cramming schemes.”

“Cramming” occurs when those other than the phone service provider add unauthorized charges to phone bills for non-call related services such as email, website hosting, discount buying programs or voicemail services. Investigations by the attorneys general, as well as complaints received by their offices, reveal that consumers usually do not intend to purchase these services and rarely make use of them. Most consumers are also unaware that they are exposed to such fraudulent billing practices just by using a wireless or landline service.

The FCC is considering new rules to reduce cramming. However, the attorneys general say that federal anti-cramming regulations must be stronger than proposed. Regulations contemplated by the FCC would apply only to landline charges; they emphasize better phone bill disclosures and allow consumers to request blocks of third-party charges.

Given that landline cramming charges are often phony and imposed without a customer's consent, the AGs urge the FCC to ban all non-telephone, third-party charges on landline telephone bills. If the FCC fails to implement such a ban, the AGs suggest that landline telephone companies be required to automatically block all third-party charges unless the consumer opts to accept such charges from a specific vendor by consenting through a phone call to their telephone company. Consumers would still be free to purchase these third-party services through more traditional means, such as by credit card.

The coalition also advises the FCC to require wireless telephone service providers obtain consumer consent for each third-party charge, verified by either call or text, before being billed and give customers the option of blocking all third-party charges from their account, at no cost.

The AGs’ proposed wireless standards reflect the popularity of wireless services, as many consumers replace their landlines with cell and smart phone technology. These devices may be used as virtual electronic wallets capable of making purchases in many different forms, raising the stakes – and costs – for phone bill chicanery. Even though wireless telephone bills have generated fewer cramming complaints than landlines, the attorneys general urge the FCC to adopt protective measures before cramming becomes as bad as or worse than on landlines.

The attorneys general submitting their comments to the FCC are New York, Oregon, Tennessee, Maryland, Indiana, Kentucky, Mississippi, Arizona, Nevada,  Iowa, New Hampshire, Alaska, Delaware, Georgia,  New Mexico, Alabama and Washington state.

More information
Letter to the FCC (PDF)

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Contacts:
Janelle Guthrie, Director of Communications, (360) 586-0725

 

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