FCC issues NPRM to protect consumers from "mystery fees" on voice services

During its Open Commission Meeting yesterday, the FCC introduced a Notice of Proposed Rule Making (NPRM) to prevent service providers from inserting "mystery fees" or what's known "cramming" on consumers' phone bills.

Under the new plan, which is designed to augment the FCC's existing Truth-in-Billing rules, the agency hopes to accomplish two goals to help consumers fight back against cramming.

First, the FCC would require service providers to notify their customers not only at the point of sale, but also on their websites that they have the option to block third-party charges from their telephone bills, if the carrier offers that option. Second, the FCC wants third-party charges to be separated on bills from the telephone company's charges.

Wireline and wireless service providers would also have to include a notice on both paper bills and on their respective websites that their customers could file a complaint with the FCC if they notice a mystery fee.

The FCC estimates that cramming could affect between 15-20 million U.S.-based consumers every year.

"The complaints that we receive here at the FCC, and similar complaints to the FTC, state authorities, and the carriers themselves, all show that cramming is a widespread problem, especially for wireline service," said Julius Genachowski, chairman of the FCC, in a statement. "And we believe the complaints greatly understate the extent of the problem."

Genachowski added that only about five percent of consumers "who had had received charges from a particular cramming company were even aware that the charges were on their bills."

Service providers that engage in "cramming" will basically place unauthorized charges that can range from $1.99 up to $19.99 per month on a consumer's voice bill. Of course, service providers will bury these charges in multipage bills with labels that make it hard for a consumer to detect.

Of course, the cramming problem will become even more difficult to detect as more consumers pay their bills online, meaning that charges could be undetected for months or possibly years.

This new NPRM comes not long after the FCC charged four phone companies with $11.7 million in fines last month for apparently conducting "cramming" for their respective customer bases.

For more:
- see the FCC release

Related articles:
Competitive phone companies face $11.7M in FCC fines over mystery fees
Republican-led House votes to reject FCC's net neutrality rules
Vonage pays $3M to states over customer complaints

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