Report: Bogus charges on phone bills may cost Americans $2 billion

By: Emily Rand
Topics: News

cc Sh4rp_i/Flickr

Cramming---the practice of adding bogus charges to consumers' phone bills for services they don't want or use---may be costing Americans $2 billion a year according to a report released yesterday by the U.S. Senate Committee on Commerce, Science and Transportation.

The year-long investigation found that phone companies' practice of charging consumers for unauthorized services is still a major problem, despite the FCC's attempts to stop it and that safeguards to prevent it have largely failed.

Over the past five years, more than 500,000 customers have contacted Qwest, Verizon and AT&T and to complain about cramming, the report said.

Among the examples of cramming the investigation found: An 82-year-old man charged for a "web-hosting personal profile" despite the fact that he did not have internet service, $11,000 worth of unauthorized charges on the phone bills of the United States Naval Station in San Diego, and customers who were told by phone companies that long-deceased relatives had signed them up to receive services when they called to complain about the charges.

"This report is a stark picture of a billing system that is hurting consumers and making profits for phone companies," Commerce Committee Chairman John D. (Jay) Rockefeller IV said of the investigation. "Despite industry promises to end this fraudulent practice years ago, hundreds of third-party billing companies have continued to place unauthorized mystery charges on consumers' phone bills for services they do not want or use."

CBS News first reported on cramming in February 2008, when Sharyl Attkisson investigated cramming charges for ringtones consumers thought were free.

CBS News affiliates in Denver and Pittsburgh have also reported previously about the illegal practice and the FCC's attempts to crack down on it.

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by ammo17 July 15, 2011 7:18 PM EDT: i have had to report to the new jersey attorny general`s office twice about the billing of FIOS.i think they play "wheel of fortune"with their prices.triple play fios $99 a month,when the bill comes it is between $157.00 to $175.00.when you try to get an answer you are put thru a maze of phone#s and websites.very aggravating.; Reply to this comment


by arthanyel July 13, 2011 4:03 PM EDT: Welcome to the Republican ideal of the unregulated free market. If you think its Ok for phone comanies (or anyone else) to screw you with no recourse, then support Republican candidates as they all want to kill the Consumer Protection agency we just started forming, and want to deregulate as much as possible.

If, on the other hand, you want some kind of controls against predatory corporations, maybe you should support the non-Republicans :-); Reply to this comment


by antoniof123 July 13, 2011 3:28 PM EDT: So what are they going to do about this?

OH NOTHING!; Reply to this comment


by d_may July 13, 2011 2:49 PM EDT: I was charged the charge of 5 minutes when all I did was hang up on 5 calls to my house. Who knew I was to hit #2 on my phone instead of just hanging up. I called the 3rd party phone company and protested the over $65.00 charges.; Reply to this comment


by stupa5 July 13, 2011 2:39 PM EDT: Have the repubs get these overcharges & bring down the deficit!

Oh no maybe not the phone companies are in bed with the repibs-GOP! Wright Mitch?; Reply to this comment


by srw6666 July 13, 2011 2:37 PM EDT: for real; white-collar fraud earns a mild slap on the wrist -- if that -- but somebody who lifts $5 worth of canned tuna off the shelf gets a permanent record. this 'ere's justice.; Reply to this comment


by lawyertom1 July 13, 2011 2:19 PM EDT: The solution is absurdly simple. No additional add-on charges allowed absent a written approval from the customer. Period. When the bill-payor is cut out of the process, why are we surprised that fraud and theft run rampant?; Reply to this comment