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Verizon Urges FCC to Back-Off of Anti-Cramming Rules

Verizon is urging the Federal Communications Commission (“FCC”) to desist from imposing “anti-cramming” rules on the wireless telecommunications industry.

“Cramming” is the practice of placing unauthorized, misleading or deceptive charges on one’s telephone bill. Crammers rely on confusing telephone bills in an attempt to trick consumers into paying for services they did not authorize or receive, or that cost more than the consumer was led to believe. The FCC’s “Truth-in-Billing” rules require telephone companies to provide clear, non-misleading, plain language in describing services for which you are being billed.

The FCC is scheduled to vote April 27, 2012 on a report, order, and further notice of proposed rulemaking targeting unauthorized or “mystery” fees on consumers’ monthly phone bills. Leading up to the vote, both Verizon and AT&T Inc. have separately announced that they will stop accepting the majority of third-party charges on landline telephone customers’ monthly bills. However, neither Verizon’s nor AT&T’s new policies would affect third-party charges on mobile telephone users’ monthly bills.

Counsel for Verizon wrote in an April 13, 2012 ex parte filing describing an April 12, 2012 meeting with advisors to the FCC Chairman and the FCC Commissioner, that “[w]ireless third-party billing is fundamentally different from wireline third-party billing and is the source of far fewer customer complaints.” Verizon further stated that “[t]he majority of third-party charges billed by wireless providers are ordered directly from the handset itself, and the end user must complete a double opt-in or equivalent verification process.” Verizon noted that the aforementioned process is currently required by the Mobile Marketing Association’s Consumer Best Practices Guidelines for Cross-Carrier Mobile Content Services. At the April 12 meeting, Verizon encouraged the FCC to avoid regulation and to permit the mobile industry to continue to rely upon and revise current industry best practices to protect consumers from the practice of cramming.

Telecommunications carriers have long been lobbying for industry self-regulation, and for the industry and regulators to work together. If passed, the FCC’s new rules would mandate landline telephone companies to notify consumers at the point of sale, in monthly billing statements, and on corporate web sites about any blocking services available to prevent third parties from imposing charges in addition to those incurred for monthly telecommunications services.  Companies also would have to separate any third-party charges from charges for traditional phone services.

The FCC’s “Truth-in-Billing” rules referenced above currently require phone companies to separate local charges from long-distance charges on monthly billing statements. Under the rules, the same requirements would apply for non-“common carrier” services.

With numerous class action lawsuits over the past few years against third party mobile content providers, aggregators, and carriers, the issue of cramming has been highly publicized and scrutinized by the FCC, more than 25 State Attorneys General, the Federal Trade Commission, and the Senate.

Disclaimer: This article is intended for informational purposes only and does not constitute legal advice. Consult with an Internet and Communications Law Attorney for assistance interpreting Mobile Marketing Association Guidelines and FCC Rules & Regulations.
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Richard B. Newman

Richard B. Newman is an Internet Lawyer at Hinch Newman LLP focusing on advertising law, Internet marketing compliance, regulatory defense and digital media matters. His practice involves conducting legal compliance reviews of advertising campaigns across all media channels, regularly representing clients in high-profile investigative proceedings and enforcement actions brought by the Federal Trade Commission and state attorneys general throughout the country, advertising and marketing litigation, advising on email and telemarketing best practice protocol implementation, counseling on eCommerce guidelines and promotional marketing programs, and negotiating and drafting legal agreements.

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2 Comments

  1. This cramming need to be dealt with the Government.How can one pay for services you didn’t use.This has to be addressed as soon as possible before things get out of hands.

    1. No, the government doesn’t need to get involved just because one stupidly signed up for something they didn’t even read the terms for. Whatever happened to parents teaching their kids that nothing in this world worth having is ever “free?” Either teach your kids or pay for their (and yours) stupidity.

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