(Washington, DC) – U.S. Senator Richard Blumenthal (D-Conn.) today announced that a provision he introduced to combat cramming on telephone bills passed the U.S. Senate Committee on Commerce, Science, and Transportation as part of broader legislation to reauthorize the Federal Communications Commission (FCC). The provision would require the FCC to complete a rulemaking related to “cramming” – the unscrupulous practice by phone companies and wireless carriers of allowing third parties to add charges on monthly bills without authorization, consent, or even knowledge sometimes by consumers.
“This critical provision would ensure that all consumers, regardless of their carrier, are protected from the deceitful practices of unscrupulous scammers,” Blumenthal said. “Often disguised as a tax or some other common charge, these cramming fees discretely add up and hurt Americans’ pocketbooks. Third-party companies should not be able to nickel and dime consumers for charges without their consent.”
Blumenthal is a leader in efforts to combat cramming. Investigations and reports by the Senate Commerce Committee, on which he serves, have provided overwhelming evidence that cramming is widespread and has caused consumers substantial harm. One report released during a Senate Commerce Committee that Blumenthal was chairing exposed the widespread cramming practices in the mobile industry. This report found that third-party wireless billing has been a billion dollar industry that has yielded tremendous profits for the four largest wireless carriers, AT&T, Sprint, T-Mobile, and Verizon. The cut that these carriers received was often 30%-40% of each vendor’s charge.
Following these investigations and hearings by the Commerce Committee, the FCC reached settlements with various cellular companies requiring the companies to refund consumers the money they were scammed out of and change their practices going forward. Under the settlements, the companies must get express consent from their subscribers before placing charges on their bills, ensure consumers are notified before the charges appear, and provide information about how to block third-party charges should consumers choose to do so. Blumenthal held several events to ensure consumers were aware of the refunds and able to claim them.
Blumenthal previously introduced legislation, the Fair Telephone Billing Act, to 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.