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‘Mystery Charges’

Genachowski Set to Circulate Cramming NPRM

FCC Chairman Julius Genachowski said he will circulate Tuesday a notice of proposed rulemaking aimed at preventing “cramming.” That comes in the aftermath of enforcement actions the commission took against four companies for cramming last week (CD June 17 p5). Genachowski also indicated Monday in a speech at the Center for American Progress that controversial “bill shock” rules could soon be ready for a commission vote.

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"The FCC is taking important steps in our efforts to crack down on cramming charges and other mystery charges,” Genachowski said. “We've proposed high fines for companies that have taken millions of dollars from consumers through unauthorized fees. We're taking new steps to educate consumers about cramming. And tomorrow, I will circulate to my colleagues an item that will empower consumers to better protect themselves from cramming.”

Cramming affects as many as 20 million Americans each year, Genachowski said. “It can add up to real money when so many Americans are trying to get by and struggling in this tough economy.” Consumers are often confused about “mystery charges” on their bills, he said. He cited an authorized long-distance charge on what a consumer bill listed only as “USBI.” Genachowski said consumers should look at their phone bills with care each month. “There’s no substitute for looking at your bills and seeing if there’s something there that’s suspicious.” Consumers should call their providers first and if that doesn’t work they should call a complaint center at the FCC, he said.

Meanwhile, the commission is moving forward on wireless bill-shock rules, Genachowski indicated. “This process is on track, and I expect we will have a practical solution in place in the not-too-distant future,” he said. The FCC approved a notice of proposed rulemaking examining new requirements that carriers provide their customers with usage alerts and other information disclosures related to SMS and wireless broadband data at its October meeting (CD Oct 15 p1). Carriers said the rules would prove expensive to implement and warned of a legal challenge (CD Jan 12 p8).

Genachowski also said he is encouraged Sen. Jay Rockefeller, D-W.Va., has agreed to hold cramming hearings. “I am pleased that other parties are looking into cramming, including the Senate Commerce Committee, the FTC, and a number of states,” he said.

Sarah Rosen Wartell, executive vice president of the Center for American Progress, welcomed the cramming rules. “Although the economic recovery is slowly, perhaps, gaining transaction, rising costs and stagnant wages diminish the purchasing power, making it all the more important for American families that they have the tools to avoid unnecessary costs,” she said. “As a busy mother of two girls, I can tell you that we in our family have very little time to spend carefully going over our monthly phone bills, line by line, to double check every charge."

Commissioner Michael Copps supported release of an NPRM. “Millions of consumers may be victims of unauthorized charges on their phone bills every year,” he said in a written statement. “For them, this Commission action comes not a moment too soon. These charges can be heavy and, if undetected, repeated for months and even longer."

AT&T takes cramming seriously and has seen complaints drop sharply, a spokesman said Monday. “We have adopted several anti-cramming measures, including offering customer tips and tools online on how to prevent unwanted charges, issuing credits to all customers with cramming complaints, and offering third party bill blocking,” he said. “We also require clearinghouses to complete an application and approval process for any new service provider and we collect and tabulate complaint data on a monthly basis for each clearinghouse and service provider.”