Verizon to help reduce third-party mystery fees

Verizon (NYSE: VZ) will no longer let third-party providers levy charges on consumers' wireline telephone bills in a practice that is known as "cramming."

U.S. Senator Jay Rockefeller heralded Verizon's effort as a big step he hopes that will encourage fellow large phone companies to stop the practice. "Verizon has stepped up for consumers in a big way," said Rockefeller, the chairman of the Commerce Committee in a statement.

Bill Kula, a spokesman for Verizon, said in a Business Week article that many crammers are third-party companies that provide voice mail and personal toll-free number services.

Last year, an investigation revealed that cramming was a $2 billion industry segment.

What's more, the committee found that telephone companies like Verizon billed over $10 billion in third-party charges, with a large amount of them never authorized by the consumer.

"Telephone customers have been tricked into paying for third-party services they didn't want or use or even know they were being billed for," Rockefeller said.

Large telephone companies aren't the only ones that have allowed this practice. Last summer, the FCC fined four competitive service providers for levying "mystery fees" on their customers.

For more:
- Business Week has this article

Related articles:
FCC takes up arms against "mystery fees"
Senate Commerce study: Voice cramming costs consumers $2B a year
FCC issues NPRM to protect consumers from "mystery fees" on voice services
Competitive phone companies face $11.7M in FCC fines over mystery fees