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June 20, 2011

FCC Will 'Not Tolerate' Mobile Phone Cramming Charges, Says Chairman

By Beecher Tuttle, TMCnet Contributor

The Federal Communications Commission will consider adopting new rules that will discourage mobile phone mobile carriers from tacking on unauthorized charges to phone bills, a practice often known as "cramming."

FCC (News - Alert) Chairman Julius Genachowski said on Monday that the proposal will create more transparency and help consumers avoid paying "mystery fees."

Genachowski said that these unauthorized charges typically range from $2 to $20 per month, and have included psychic hotline memberships, diet pills and cosmetic products that were never ordered. These fees are often buried in 20-page bills and vaguely labeled, making it extremely difficult for customers to identify them, according to PC Magazine.

In fact, only about five percent of cramming victims ever pick up on the scam, Genachowski said, citing a recent Federal Trade Commission survey.

Genachowski referenced the story of a St. Louis woman who was charged for long distance service for two full years, even though she never authorized or used the service.

Following her protest of the charges, the mobile provider sent her the copy of a document that she had purportedly signed. The name, address, birth date and email address contained in the form were all incorrect, Genachowski said.

“Cramming is not only illegal, it erodes consumer trust in communications services," he added. "The FCC will not tolerate cramming, and we are turning up the heat on companies that rip off consumers with unauthorized fees."

Genachowski failed to provide any specifics on the rules, but said that he would circulate the proposal to the FCC commissioners on Tuesday. He also encouraged mobile phone customers to comb their wireless bills for unauthorized charges. The FCC has released a tip sheet to help consumers understand cramming practices.

Genachowski's comments come just one week after the FCC fined four small carriers a total of $11.7 million for adding unauthorized charges to their customers' bills, according to Bloomberg (News - Alert).

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Beecher Tuttle is a TMCnet contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Carrie Schmelkin

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