WASHINGTON, DC –(ENEWSPF)–June 24, 2016. Congresswoman Jan Schakowsky (IL-09) has introduced the Protect Consumers from Phony Phone Charges Act to require the Federal Communications Commission (FCC) to restrict unauthorized third-party fees sneaked onto consumers’ wireless and landline phone bills:
“Tens of millions of American consumers have been ripped off by companies placing unauthorized charges on their phone bills. This practice, known as cramming, often goes unnoticed by consumers because these charges are listed under deceptive names. In 2014 and 2015, federal consumer watchdogs and state attorney generals reached settlements with major wireless companies totaling $353 million to stop these unfair charges. My bill would build on that progress, requiring the FCC to establish permanent protection for consumers paying for wireless, landline, and bundled phone services. No phone company should allow these outrageous fees on their bills.”
Cramming is when a company places unauthorized fees or charges on a customer’s phone bill. While charges are listed on the phone bill, the charges may not be from the phone company. Phone companies have allowed third parties to “cram” charges on their customer’s bill for wireless, landline, or bundled services. This practice has allowed scammers to charge consumers’ payment cards and bank accounts. Consumers may not even realize the third-party charges are there. Their bills may list vague or seemingly innocuous line items such as “monthly fee” or “service charge.” The FCC estimates that cramming has harmed tens of millions of Americans.
The FCC, Consumer Financial Protection Bureau, Federal Trade Commission, and state attorneys general reached settlements totaling $353 million with AT&T, Sprint, T-Mobile, and Verizon in 2014 and 2015 for allowing cramming on wireless bills. As part of those settlements, the four companies are now under consent decrees that require consent from and disclosure to consumers for third-party charges on their wireless bills.
However, major protections under those consent decrees with wireless companies are time-limited. Landline customers are only protected by voluntary actions. Consumers need strong, ongoing protection regardless of whether they have wireless, landline, or bundled phone services.
This bill would require the FCC to complete a formal rulemaking within two years to protect consumers from cramming. This rulemaking would build on the existing consent decrees by providing ongoing protection across wireless, landline, and bundled services. In May, the Senate Commerce Committee adopted a similar provision offered by Sen. Blumenthal on a voice vote.
Endorsements: Consumer Federation of America, Consumer Watchdog, and National Consumer Law Center (on behalf of its low-income clients).
House co-sponsors: Rep. Gene Green (D-TX), Rep. Mike Honda (D-CA), Rep. Raul Grijalva (D-AZ).
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