If you haven't done a line-by-line check of your phone bill lately, now is the time.
Cramming -- the process of placing unauthorized charges on phone bills -- has grown to epidemic proportions and affects 15 million to 20 million people each year, said Federal Communications Commission Chairman Julius Genachowski, who should know.
For The Record
Los Angeles Times Friday, July 01, 2011 Home Edition Main News Part A Page 4 News Desk 1 inches; 48 words Type of Material: Correction
Phone bills: In the June 26 Business section, a Personal Finance column about cramming -- the process of placing unauthorized charges on phone bills -- said Main Street Telephone of Blue Bell, Pa., was the corporate parent of USBI. In fact, Main Street was a client of USBI.
For The Record
Los Angeles Times Sunday, July 03, 2011 Home Edition Main News Part A Page 4 News Desk 1 inches; 49 words Type of Material: Correction
Phone bills: In the June 26 Business section, a Personal Finance column about cramming -- the process of placing unauthorized charges on phone bills -- said that Main Street Telephone of Blue Bell, Pa., was the corporate parent of USBI. In fact, Main Street was a client of USBI.
These charges are often so surreptitious that consumers never see them. Only 1 in about 20 victims of cramming realize it, according to an FCC study. The rest pay their bills never knowing that the total is inflated by unauthorized fees, Genachowski said. As a result, relatively minor charges add up to hundreds of dollars each year.
"We've seen people getting charged for yoga classes, cosmetics, diet products and even psychic hotline memberships," the FCC chairman said at a news conference last week. "But they're buried in bills that can run 20 pages or more and are labeled with hard-to-decipher descriptions."
Anyone can be a victim, he added. Unlike identity thieves, who need some bit of private information about you such as a Social Security or credit card number, crammers can rip you off with information from a phone directory.
One Missouri woman, for example, was charged for 25 months of long-distance services that she'd never ordered. When she finally discovered the charge and protested, the company said she'd authorized the service and provided her "authorization form" to prove it.
The only problem? This form included the wrong name, wrong address, wrong email and wrong birth date for the woman paying the bill. The only thing on the form that belonged to the victim was the phone number.
Over the course of those two years, this woman had paid hundreds of dollars for a service she didn't want and didn't buy. She was forced to file a complaint with the FCC to get her money back.
Cramming charges typically amount to between 99 cents and $19.99 a month. The reason such charges are commonly overlooked is that they're often described in generic language like "service fee" or "call plan" or "membership." This happens even though the FCC's truth-in-billing rule demands clear, plain-English disclosures.
For example, a long-distance company that was recently cited for cramming violations listed its charges next to the description "USBI." The company had supposedly sold this discount long-distance plan to thousands of consumers. But an FCC investigation found that fewer than 5% of the people who were billed for the plan used it, a telltale signal that they were unaware of the purchase.
The FCC said it intended to levy a $4.3-million fine against USBI's parent, Main Street Telephone of Blue Bell, Pa., as part of a crackdown on unauthorized charges that also swept up three other firms -- VoiceNet Telephone and Cheap2Dial Telephone, both of Harrisburg, Pa., and Norristown Telephone, also of Blue Bell.
Collectively, these firms are expected to pay $11.7 million to settle alleged cramming violations.
Some activities can make you more vulnerable to cramming.
For instance, if you answer an online survey that demands your phone number "to deliver your results," it's highly likely that buried somewhere in the "terms and conditions" there's an automatic sign-up for some form of "membership" that will get billed to your phone.
In addition, companies offering "free trials" are notorious for signing up consumers for stealth subscriptions and services that are later billed to their credit cards or phone numbers.
But the best way to determine whether you're a victim is to scrutinize your phone bill and ask questions about anything you don't recognize, Genachowski said.
Companies that place outside charges on your phone bill are supposed to list their phone number next to the line item, in case you have questions. Start there to determine whether the charge is something you've authorized. If not, ask to have it removed and insist that past charges be refunded.
If the vendor is reluctant, follow up with your phone provider. Phone companies make money by allowing outside vendors to bill through them, but they have a vested interest in keeping you as a customer. Many phone companies will agree to block all outside charges, but only if you request it.
If neither your phone company nor the vendor cooperates, contact the FCC.
The agency offers an online complaint form at www.fcc.gov/guides/how-file-complaint or you can call (888) 225-5322.