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FCC to attack phone cramming charges

Genachowski will offer a proposal to make phone bills more transparent

The U.S. Federal Communications Commission will consider new rules to help telephone service customers decipher their phone bills and guard against unwanted charges, the agency's chairman said Monday.

FCC Chairman Julius Genachowski on Tuesday will circulate a new proposal to combat so-called cramming charges on phone bills, he said. Cramming, the illegal placement of an unauthorized fee onto a customer's monthly phone bill, is a practice that affects an estimated 20 million U.S. residents a year, Genachowski said during a speech at the Center for American Progress.

Cramming charges typically range from US$1.99 to $19.99 per month, but only about one in 20 telephone customers notice the additional charges, Genachowski said. "These mystery fees are often buried in bills that can run 20-or-so pages, and they are labeled with hard-to-decipher descriptions," he said. "As a result, consumers too often get bilked out of hundreds of dollars."

In some cases, the charges come from the customers' telephone carriers or third-party carriers. But the FCC has seen customers "getting charges for yoga classes, cosmetics, diet products, and -- yes -- psychic hotline memberships," Genachowski said.

Genachowski didn't offer details on his cramming proposal, but he said it would be focused on "transparency and smart disclosure" on telephone bills.

Genachowski also highlighted the FCC's proposal Thursday to fine four companies a total of $11.7 million for alleged cramming activity. The four companies were charging consumers for long-distance service they didn't order, the FCC alleged.

The enforcement action and the new proposal are intended to send a signal to businesses that the FCC will not tolerate mystery charges on customer phone bills, Genachowski said. "We're not going to let it be a good business to rip off consumers," he said.

The FCC also released a consumer tip sheet on cramming on Monday.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.


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