FCC Takes Steps to Crack Down on Phone Bill Cramming

The U.S. Federal Communications Commission has voted to require telephone carriers to provide their customers more billing information in an effort to crack down on mysterious, unauthorized charges on phone bills.

The new rules, adopted Friday, are targeted at so-called cramming, the illegal placement of unauthorized charges on monthly landline phone bills. The new rules require telephone carriers to notify subscribers of the option to block third-party charges, if they offer that option. The FCC required the notifications at the time the customer signs up for service, on each monthly bill and on carrier websites.

In addition, the FCC voted to strengthen its rules requiring that third-party charges be separated from the telephone company’s charges on phone bills. The FCC will also solicit comment on whether the agency should adopt additional protections, such as requiring landline carriers to get customer approval before placing third-party charges on their bills.

Many telephone service customers don’t recognize for months or years crammed charges on their bills, the FCC said. Crammers often avoid detection with small charges — as little as US$1.99 on a monthly bill. In other cases, the crammers describe the charges in a way that makes them appear to be for telephone services, the FCC said.

Fifteen to 20 million U.S. households are victims of cramming on their landline phone bills each year, according to the FCC.

AT&T, in a statement, said it has committed to working with the FCC and other carriers to fight cramming. The carrier said last month it would limit the types of third-party charges that can be added to its customers’ phone bills. The company takes cramming “very seriously,” AT&T said.

The FCC’s new rules don’t apply to mobile phone or voice-over-IP service, but the FCC will monitor complaints from mobile and VoIP customers, the agency said.

In another action, the FCC also voted to solicit public comments on new ways to fund the Universal Service Fund, a fund that now subsidizes telephone service in rural areas. A tax on long-distance service now pays for the fund.

The FCC has moved to transition most of the fund to broadband subsidies, and on Friday, the agency asked for comments on what services and service providers should contribute to the fund and how the agency should bill providers.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant’s e-mail address is grant_gross@idg.com.