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FTC wants best and brightest to tackle phone bill cramming

Forum in May looks to find ways to outwit crammers

By Layer 8 on Wed, 01/26/11 - 12:20pm.

The Federal Trade Commission today said it will host a forum to gather the latest ideas on how to stop unauthorized charges on phone bills known as cramming.

The agency said other government entities, consumer advocates, and industry representatives will be  invited to participate in the forum - which will be held May 11, 2011, in Washington, DC -- to discuss ways to reduce cramming through business practices, law enforcement and possible legislation.

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Participants will be asked to take up specific ideas such as allowing consumers to request a block on all third-party billing, and requiring third parties to get written approval from consumers before placing charges on their phone bills, the FTC stated. The FTC is encouraging your input as well, go here if you have an idea you want included in the discussion.

According to the FTC hot issues are expected to include:

  • How telephone bill cramming harms individual consumers and small businesses;
  • How consumers and competition can benefit from third-party billing on telephone bills for products and services such as voicemail, developing or hosting websites, or other enhanced services;
  • The steps that billing companies and telephone carriers currently take to detect, monitor, and prevent cramming;
  • Best practices being used by the industry to reduce cramming, such as improving disclosure of third-party charges to consumers; and
  • The types of goods and services charged on telephone bills, and the difference between landline and wireless billing practices.

The FTC noted that it has been combating cramming in recent months. For example, in September the FTC  had a U.S. district court permanently shut the doors of a company it says placed $37 million worth of bogus charges on the telephone bills of thousands of small businesses and consumers for Internet-related services they never agreed to buy. The FTC had sued Inc21, charging that the company hired offshore telemarketers to call prospective clients to sell its Web-based services. The defendants then used LECs to place charges, usually between $12.95 and $39.95 per month, a practice known as cramming.

The FTC defines cramming as unexplained charges on phone bills for services you never ordered, authorized, received, or used. Sometimes a one-time charge for entertainment services will be crammed onto your phone bill. Other times, monthly recurring charges are crammed onto your phone bill. Cramming of monthly recurring charges falls into two general categories: club memberships, such as psychic clubs, personal clubs, or travel clubs; and telecommunications products or service programs, such as voice mail, paging, and calling cards.

Follow Michael Cooney on Twitter: nwwlayer8  

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