FCC implements new rules against cramming

The Federal Communications Commission (FCC) has issued new rules that will provide consumers with additional protections against the practice of adding unauthorized charges and fees to residential phone bills, also known as “cramming”.

Detailed in a Report and Order and Further Notice of Proposed Rulemaking issued in April 2012, the Commission’s new rules are as follows:

  1. Require landline telephone companies to notify consumers clearly and conspicuously (at the point of sale, on each bill, and on the company’s website) of the option to block third-party charges on their telephone bills.
  2. Strengthen existing Commission requirements that all third-party charges on landline telephone bills be clearly separated from the phone company’s own charges.

The Commission also requested comments on whether it should adopt additional protections against cramming, such as requiring landline telephone companies to obtain consumer consent prior to placing third-party charges on their telephone bills if the company already offers to block those charges.

According to the Commission, an estimated 15-20 million American households receive “mystery” fees on their monthly landline phone bills each year, and only 5% of consumers who are impacted by cramming are aware of the monthly charges being applied to their bills,

The FCC’s newly proposed rules are part of a larger effort by the Commission to address cramming and other so-called mystery fees on consumer telephone bills. In a settlement reached with the Commission in 2011, Verizon Wireless agreed to refund $50 million in overcharges to subscribers, and to make a $25 million “voluntary payment” to the U.S. Treasury. Further, in June 2011, the Commission issued Notices of Apparent Liability totaling $11.7 million against four separate telecommunications companies allegedly engaged in widespread cramming.

Read the complete text of the Commission’s Report and Order on cramming.