Senate Committee Investigates Widespread 'Mystery Charges' to Phone Bills

committee chairman Rockefeller - mystery chargesThe Senate Commerce Committee has launched an investigation into "cramming," a deceptive practice that places unauthorized "mystery charges" on consumers' telephone bills, its chairman announced today.

Cramming involves the intentional or accidental insertion of unauthorized, misleading, or deceptive telephone charges. Cramming charges on phone bills are typically labeled "service fee," "service charge," "other fees," "voicemail," "mail server" and "calling plan, "monthly fee" or "minimum monthly usage fee.""Protecting American consumers is one of my top priorities," Chairman Jay Rockefeller (D-W. Va.), said in a statement. "My Committee will continue to investigate businesses that engage in unscrupulous practices that harm hardworking Americans and we will not stop until consumers are no longer subjected to them."

In June, Rockefeller sent letters to three telephone companies -- AT&T, Qwest, and Verizon -- requesting information about their awareness of the "cramming" problem and the steps taken to address it.

In October, Verizon Wireless agreed to pay a $25 million fine to settle Federal Communications Commission accusations about "mystery fees" it had been charging customers for several years. The settlement, the largest in FCC history, also required Verizon to refund some 15 million customers more than $50 million.

In his letters to AT&T, Qwest, and Verizon, Rockefeller asked for lists of companies they allowed to place third-party charges on phone bills. While the investigation remains ongoing, Rockefeller decided to make the investigation public due to "serious concerns" raised over an initial review of the companies placing third-party charges on phone bills.

The Committee's initial review has found that:
  • A significant percentage of the companies placing third-party charges on telephone bills are the subject of "cramming" complaints from consumers filed with the Better Business Bureau, the Federal Trade Commission, the Federal Communications Commission, and various consumer-oriented websites.
  • More than 250 have a "D" or "F" rating from the Better Business Bureau.
  • Many are charging telephone customers for "services," like email, online photo storage, and voice mail either offered for free on the Internet or provided to customers through their preexisting telephone service.
  • While hundreds of different companies place third-party charges on American consumers' telephone bills, many appear to be controlled by just a few companies. For example, a Florida company called daData, Inc., appears to control and operate as many as 30 different companies that charge consumers' phone bills.
The Committee is taking the following steps:
  • Sending requests for information to three companies that appear to have relationships with multiple companies who are named in "cramming" complaints.
  • Continuing the ongoing investigation into AT&T, Qwest, and Verizon to understand the telephone companies' role in "cramming."
Chairman Rockefeller also sent letters to three companies that apparently own or are partnered with companies that generated a significant number of consumer "cramming" complaints.

"Last year, we put an end to an online practice that cost Americans more than a billion dollars in unauthorized charges on their credit and debit cards," Rockefeller said in a statement. "I'm continuing this fight -- if unauthorized charges are being placed on consumers' telephone bills, I'm going to put a stop to it."
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