Legal Alerts and Articles
FCC Issues "Cramming" Enforcement Advisory
On June 17, 2011, the Federal Communications Commission's Enforcement Bureau released an Enforcement Advisory regarding "cramming", which is the unauthorized placement of charges on a consumer's phone bill. In the Advisory, the Enforcement Bureau stated its intention to aggressively pursue communications companies which engage in such activity. Release of the Advisory coincided with the release of four Notices of Apparent Liability for Forfeiture (NALs), in which the Commission proposes to impose significant penalties ranging from $1.5 to $4.2 million upon four communications providers engaged in apparent cramming activity.
In its Advisory, the Bureau reminded communications providers that the agency takes cramming seriously and that such practices carry heavy penalties. The Commission also highlighted its Truth-in-Billing Rules, which require all charges listed on a consumer's bill to be clear and understandable. The FCC further recommended that businesses review Section 201 (b) of the Communications Act of 1934 and consult their legal counsel with any questions regarding their own practices. The Enforcement Advisory (in PDF format) can be downloaded from the FCC's website at: http://fcc.us/mrJm2N.
The NALs, released on June 16, 2011, were directed against providers of "dial around" long distances services. The Commission found that each of the four companies had an inadequate verification process for online enrollment of customers. The Commission determined that each company had "willfully and repeatedly placed, or caused to be placed, charges on complainants' telephone bills that they never authorized." The Commission also placed on notice other 'dial around' or third-party service providers that these practices are "unjust and unreasonable" and that significant forfeitures in the future are possible to prevent companies from charging consumers for unauthorized services.
Dial around providers enable customers to bypass their pre-selected long distance carrier, if any, and use the 'dial around' service for specific calls. Such providers generally offer additional telephone services, voice mail and similar services, or other unrelated products and services such as, for example, chat lines, diet plans and cosmetics.
Please do not hesitate to contact us if you have questions about the Enforcement Advisory or Truth-in-Billing Rules.
June 2011