CPUC Strengthens Consumer Protections Against Cramming and Fraud on Telephone Bills
For Immediate Release From The Utility Reform Network
California strengthened “cramming” in order to provide stronger protections for consumers and prevent unauthorized third-party charges on customer telephone bills.
Phone companies will be held accountable for cramming—the practice of placing of unauthorized charges on customers’ phone bills—under rules proposed by TURN and other consumer groups that were adopted by the California Public Utilities Commission (CPUC) on Oct. 28, 2010.
For the first time, phone companies will be required to investigate companies that add charges to phone bills, ensure the legitimacy of customer authorizations, and provide detailed reporting on cramming incidents. More importantly, phone companies will ultimately be held responsible for refunding all unauthorized charges, a necessary counterbalance to the revenues the telcos earn from 3rd party billing.
TURN member Shannon Doermann said when mysterious, unauthorized charges appeared on her phone bill she found it impossible to resolve them on her own. "When there is no way to reach or confront the responsible party, consumers have few weapons with which to fight back. The new rules will force phone companies to take responsibility for charges that they allow third parties to cram onto customers’ bills."
"The phone companies have given scammers carte blanche," said TURN Managing Attorney Bill Nusbaum. "Consumers have been on the hook for all sorts of phony charges from unwanted internet access to unspecified ‘advanced services’." Nusbaum added that phone companies themselves also engage in cramming. Verizon Wireless recently agreed to refund customers over $53 million for phantom data fees that millions of customers were charged without authorization over a three-year period. Verizon also agreed to pay the FCC a penalty of $25 million.
Nusbaum said consumers’ best defense against cramming is to be vigilant in making sure their bills are accurate. While modern communications devices have created lots of new opportunities for crammers, consumers’ best defense is a simple, time-tested one: make sure to carefully read each and every bill and check to:
- Make sure the only companies listed are ones you have expressly ordered services from.
- Look for strange codes like "ZPDI" or USBI" on your monthly bill, and examine the numbers or services below any such codes very carefully.
- Make sure you made all the calls listed on your bill.
- Make sure the charges are consistent with the prices you were quoted by the company, and challenge any discrepancies.
Thanks to TURN’s efforts, these charges will be much easier to challenge. For more information see Protect Yourself from ‘Slamming’ and ‘Cramming’ for more on Cramming.