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Genachowski unveils new actions to help against "Cramming"

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Released: June 20, 2011

NEWS
Federal Communications Commission

News Media Information 202 / 418-0500

445 12th Street, S.W.

Internet: http://www.fcc.gov

Washington, D. C. 20554

TTY: 1-888-835-5322

This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action.
See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

FOR IMMEDIATE RELEASE:

NEWS MEDIA CONTACT:

June 20, 2011
Neil Grace, 202-418-0506
Email: neil.grace@fcc.gov

FCC CHAIRMAN GENACHOWSKI UNVEILS NEW ACTIONS TO HELP

CONSUMERS PREVENT & IDENTIFY "MYSTERY FEES" ON PHONE

BILLS, KNOWN AS "CRAMMING"

Twenty Million Americans unaware of illegal and unauthorized mystery fees called "cramming"


ranging from $1.99 to $19.99 on monthly phone bills;

FCC proposes $11.7 million in penalties against four companies & releases Consumer Tip Sheet


Builds on FCC's Consumer Empowerment Agenda


(Washington, D.C) Building on his Consumer Empowerment Agenda, FCC Chairman Julius
Genachowski today announced plans to propose new rules to increase transparency and disclosure on
phone bills, aiming to protect Americans from "mystery fees" and "cramming," which is the illegal
placement of an unauthorized fee onto a consumer's monthly phone bill.
The charges are for services
like long-distance services, voicemail, or even diet plans or yoga classes that the consumer neither
requested nor used.
Speaking at the Center for American Progress, Chairman Genachowski also unveiled an

FCC Cramming
Tip Sheet

to help consumers identify and resolve this type of mystery fee if they've been affected. A
recent expert survey showed that only five percent (5%) of consumers who were impacted by a particular
cramming company were aware of the monthly charges. Based on the same survey and state data, the
FCC believes an estimated 15 to 20 million American households a year potentially have these mystery
fees on their monthly landline phone bills.

Chairman Genachowski said

, "Our Consumer Empowerment Agenda is focused on harnessing
technology and transparency to empower consumers with the information they need to make smart
decisions and to make the market work. When abusive practices require action, we will act. We are
focused on empowerment, education, and enforcement."

He continued,

"Today, I'm also announcing
that I will be circulating a proposal tomorrow to my colleagues to explore new ways to empower
consumers and protect Americans against cramming and mystery fees."
One example of cramming involves a St. Louis, Missouri woman who was charged for 25 months of
long-distance service she never authorized or used. When she protested the charges, the company sent
her a copy of the form that she had supposedly used to authorize the service. It had a different name,
address, email and birth date than she did. Even so, the long-distance company offered to credit back
only a fraction of the cost.

In addition, Chairman Genachowski discussed the FCC's recent enforcement action against four
companies, resulting in proposed penalties of $11.7 million.

He said

, "Cramming is not only illegal, it
erodes consumer trust in communications services. The FCC will not tolerate cramming, and we are

turning up the heat on companies that rip off consumers with unauthorized fees. We want to send a clear
message: if you charge consumers unauthorized fees, you will be discovered and you will be punished."
The FCC Enforcement Bureau issued Notices of Apparent Liability last week to four companies for
allegedly charging thousands of consumers for long distance service that they had not ordered. The
companies targeted in the FCC Notices of Apparent Liability are: Main Street Telephone ($4,200,000);
VoiceNet Telephone, LLC ($3,000,000); Cheap2Digital Telephone, LLC ($3,000,000); and Norristown
Telephone, LLC ($1,500,000).
The unlawful billing appears to have continued for months. According to the Enforcement Bureau, only
one-tenth of one percent (0.1%) of consumers in two of the cases reviewed actually used the additional
services for which they were being charged.

Chairman Genachowski concluded by saying,

"Today, we are saying loud and clear to consumers
trying to navigate the complex and constantly changing communications landscape: the FCC is on your
side. We are focused on helping all Americans seize the tremendous opportunities of communications
technology."

CLICK HERE

TO VIEW THE

FCC CONSUMER TIP SHEET

CLICK HERE

TO VIEW THE

FCC INFOGRAPHIC ON CRAMMING

CLICK HERE

TO VIEW A

ONE-PAGE BACKGROUND SHEET

-- FCC --

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