Blumenthal Introduces Legislation To Stop Cramming On Telephone Bills

(Washington, DC) – U.S. Senator Richard Blumenthal (D-Conn.) joined Commerce Committee Chairman John D. (Jay) Rockefeller IV and Senator Amy Klobuchar (D-MN) today in introducing legislation that would prevent telephone companies from “cramming” unauthorized third-party charges onto consumers’ landline phone bills. Cramming happens when businesses place multiple illegitimate, misleading or deceptive charges on a customer’s telephone bill. According to a Commerce Committee investigation, consumers have already lost billions of dollars through mysterious and unauthorized charges for services that they never purchased.

The Fair Telephone Billing Act of 2013, introduced this week, would bar any local exchange carrier or provider of interconnected VoIP services from placing any third-party charge on a customer’s bill – unless the charge is for a telephone-related service, like a long distance or collect call, or a “bundled” service, like satellite television service, that is jointly marketed or sold with a company’s telephone service. 

A 2010 investigation by the Senate Commerce Committee uncovered widespread abuse of unauthorized third-party charges on phone bills, affecting millions of customers, including small businesses, non-profits and even government agencies. The report estimated that telephone companies placed 300 million third-party charges on customer bills each year, totaling over $10 billion in charges over a period of five years, largely unauthorized. Among the charges detailed in the report include a children’s hospital charged for a “celebrity tracker” e-mail service, a bicycle store owner charged $1,500 for virtual fax and voicemail services she did not authorize or use, and a national bank charged for credit protection plans. An auditor uncovered $550,000 in unauthorized third-party charges billed to the United States Postal Service, according to the committee report.

Telephone bill “cramming” first began to appear in the 1990s. At the time, the Federal Communications Commission attempted to fix the problem through a series of voluntary guidelines for the telecommunications industry. “Truth-in-Billing” regulations required the disclosure of third-party charges on all phone bills. Years later, the problem continues to impact millions of customers. 

This legislation would prevent fraudulent phone fees from being disguised as a tax or some other common charge,” Blumenthal said. “Third-party companies should not be able to nickel and dime consumers for charges without their consent.

Read the full Commerce Committee report here.