A new Senate Commerce Committee study revealed that "cramming" or the act of inserting mystery fees into phone bills without customers' knowledge could cost U.S. consumers up to $2 billion a year.
In delivering the findings, Sen. John D. (Jay) Rockefeller IV (D-W.Va.) said that while consumers pay these changes, major incumbent service providers are making millions from it.
"This report is a stark picture of a billing system that is hurting consumers and making profits for phone companies," Rockefeller said in a Consumer Affairs article. "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."
Verizon (NYSE: VZ), for example, said it "receives a flat fee between $1 and $2 per charge for placing third-party charges" on its customers' wireline voice bills.
Last May, Rockefeller initiated the Committee's inquiry into third-party billing on wireline phone services after getting a bevy of complaints from consumers that said they kept seeing unknown fees for services they never ordered on their paper or online bills. Since 2006, over 500,000 customers have complained to AT&T (NYSE: T), CenturyLink (NYSE: CTL), and Verizon about mystery fees on their bills.
The release of the Senate's study comes amidst a bevy of activity around cramming from the Senate Committee and the FCC, which released a Notice of Proposed Rule Making (NPRM) on cramming during an open commission meeting on Wednesday. Earlier, the FCC fined four regional voice providers $11.7 million in fines for conducting "cramming" practices on their respective consumers.
- Consumer Affairs has this article
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