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Commission Document

Empowering Consumers to Prevent, Detect, Billing Unauthorized Charges

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Released: May 17, 2013
Federal Communications Commission
Washington, D.C. 20554
‘ May 17, 2013

DA 13-1140

Small Entity Compliance Guide

Empowering Consumers to Prevent and Detect Billing for Unauthorized Charges

(“Cramming”); Consumer Information and Disclosure; Truth-in-Billing and

Billing Format

Report and Order and Further Notice of Proposed Rulemaking
FCC 12-42
CG Docket Nos. 11-116, 09-158, 98-170
Released: April 27, 2012

This Guide is prepared in accordance with the requirements of Section 212 of the
Small Business Regulatory Enforcement Fairness Act of 1996. It is intended to help
small entities—small businesses, small organizations (non-profits), and small
governmental jurisdictions—comply with the new rules adopted in the above-
referenced FCC rulemaking docket(s). This Guide is not intended to replace the
rules and, therefore, final authority rests solely with the rules. Although we have
attempted to cover all parts of the rules that might be especially important to small
entities, the coverage may not be exhaustive. This Guide may, perhaps, not apply in
a particular situation based upon the circumstances, and the FCC retains the
discretion to adopt approaches on a case-by-case basis that may differ from this
Guide, where appropriate. Any decisions regarding a particular small entity will be
based on the statute and regulations.

In any civil or administrative action against a small entity for a violation of rules,
the content of the Small Entity Compliance Guide may be considered as evidence of
the reasonableness or appropriateness of proposed fines, penalties or damages.
Interested parties are free to file comments regarding this Guide and the
appropriateness of its application to a particular situation; the FCC will consider
whether the recommendations or interpretations in the Guide are appropriate in
that situation. The FCC may decide to revise this Guide without public notice to
reflect changes in the FCC’s approach to implementing a rule, or to clarify or
update the text of the Guide. Direct your comments and recommendations, or calls
for further assistance, to the FCC’s Consumer Center:

1-888-CALL-FCC (1-888-225-5322)

TTY: 1-888-TELL-FCC (1-888-835-5322)

Fax: 1-866-418-0232

fccinfo@fcc.gov

Objectives of the Proceeding

“Cramming” is the unlawful and fraudulent practice of placing unauthorized charges (i.e. charges for
services that the consumer did not authorize) on a consumer’s bill for telecommunications services. The
Commission previously has determined that cramming is an unjust and unreasonable practice prohibited by
section 201(b) of the Communications Act of 1934, and has adopted Truth-in-Billing rules in part to address
cramming. In the April 2012 Report and Order, the Commission adopted additional safeguards for wireline
telephone consumers that build on existing Commission rules and industry efforts to prevent cramming.
These additional safeguards are necessary to better enable consumers to prevent cramming before it occurs
and detect it if it does happen to them.
Cramming occurs when telephone companies bill consumers for unauthorized charges or allow third
parties to place unauthorized charges on their consumers’ telephone bills, enabling consumers’ telephone
numbers to operate similarly to a credit or debit card account number. . Entities that purchase billing-and-
collection services from a telecommunications carrier need only an active telephone number, which can be
obtained from a telephone directory, to place unauthorized charges on the consumer’s telephone bill.
New rules adopted in the April 2012 Report and Order require wireline carriers that currently offer
blocking of third-party charges to clearly and conspicuously notify consumers of this option on their bills and
websites, and at the point of sale; to place non-carrier third-party charges in a distinct bill section separate
from all carrier charges; to provide subtotals in each section of the bill; and to display separate subtotals for
carrier and non-carrier charges on the payment page of the bill.
These rules reflect an important step beyond the existing Truth-in-Billing rules by requiring
additional clear and conspicuous disclosures and by requiring clearer and distinct separation of carrier and
non-carrier charges. The Truth-in-Billing rules are codified at sections 64.2400 and 64.2401 of the
Commission’s rules and, among other things, require that consumer bills: (1) be clearly organized, clearly
identify the service provider, and highlight any new provider (i.e., one that did not bill the customer for
service during the last billing cycle); (2) separate charges by service provider; (3) contain full and non-
misleading descriptions of the charges that appear therein; and (4) contain clear and conspicuous disclosure
of any information that the consumer may need to make inquiries about, or to contest charges on, the bill.

Compliance Requirements

A. Disclosure of Blocking Options
We require wireline carriers to clearly and conspicuously notify consumers – at the point of sale, on
each bill, and on their websites – of blocking options they offer. This required disclosure will benefit
consumers by making them aware that non-carrier third-party charges can be placed on their telephone bills
and by educating consumers about the blocking options carriers already offer voluntarily. Consumers will
have the information necessary to take advantage of blocking options and thereby prevent cramming before
it happens rather than having to dispute unauthorized charges after they have been crammed.
Consistent with our existing Truth-in-Billing rules, we afford carriers the flexibility to implement
this requirement in the manner that best accomplishes the goal of the rule within the context of each
carrier’s individual website, bill, and point-of-sale scripts. Each carrier’s disclosures must accurately reflect
the capabilities of its blocking options.
B. Identifying Charges on Bills
We require carriers that choose to place non-carrier third-party charges on their own bills to their
consumers to put such charges in a distinct section of the bill separate from charges assessed by carriers that
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provide telecommunications services to the consumer. The Truth-in-Billing rules already require charges
from different carriers to be separated and displayed by carrier, but do not require that charges from each
individual carrier or type of carrier, e.g. local or long distance, be placed in distinct sections of the bill.
Carriers are free to separate such carrier charges into different sections on their bills but are not required to
do so. These new measures should ensure that carriers’ choice of bill format does not, even unwittingly,
contribute to consumer confusion about whether a third-party charge is from a carrier or from a third party
that does not provide telecommunications services to them.
The rule does not prohibit carriers from using the same basic format for all third-party charges,
provided the format otherwise complies with our rules. This rule does, however, require that non-carrier
third-party charges be completely separated from carrier charges by placing them in their own distinct
section of the bill so that it is clear and conspicuous to the consumer that all non-carrier third-party charges
are in one part of the bill and that all carrier charges are elsewhere on the bill. Although a carrier’s
compliance with this rule will be determined on a case-by-case basis, a carrier might seek to comply by, for
example, designating “Part A” of its bill for carrier charges and “Part B” for non-carrier charges. Similarly, a
carrier may prefer “Part A” for its own charges, “Part B” for third-party carrier charges, and “Part C” for
non-carrier third-party charges. With clear and conspicuous labeling of each section of the bill, such formats
likely would comply with the requirement adopted in the Report and Order. We do not mandate any specific
format, however, and carriers have flexibility to develop their own solutions that comply with the rule.
This rule does not change anything with respect to carrier billing for bundled services. A carrier may
continue to place the bundle charge in the section of the bill containing carrier charges. To clarify, we do not
disrupt the Truth-in-Billing rules that permit a carrier offering a bundle to treat the bundle as a single service
offering even though the bundle may contain service provided by others.
We also require carriers to clearly and conspicuously identify and disclose separate subtotals for
charges from carriers and charges from non-carrier third-parties on the payment page of their bills. For
consumers who do not receive a paper bill, these subtotals must be clearly and conspicuously displayed in an
equivalent location and in any bill total that is provided to the consumer before the consumer has an
opportunity to access an electronic version of the bill, such as in a transmittal email message, on a payment
portal, or on a webpage.

Effective Dates

Carriers were required to implement changes to their billing systems by December 26, 2012.
Carriers were required to implement the required disclosures on their websites and at their points of sale by
November 13, 2012.

Weblink

A copy of the Report and Order is available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-
12-42A1.pdf,
FCC 12-42 (2012).
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