Attorney general joins move to ban phone customer 'cramming'

Minnesota Attorney General Lori Swanson joined other states Monday in petitioning the Federal Communications Commission to ban unauthorized third-party billing on telephone bills for services consumers did not order or want.

"Cramming" is the term used for the practice of putting these charges on monthly phone bills.

In the past, such unwanted charges usually involved long-distance services, but lately Swanson said her staff has gotten complaints about things like weight-loss websites, celebrity news updates and movie streaming. Cramming is spreading to mobile phones, too, she added.

The charges are usually small enough to escape notice at first, and consumers find it all but impossible to get refunds once they discover it, Swanson said in her filing.

Telephone companies collected more than $1 billion in revenue over the past decade by putting third-party charges on their customers' bills, according to a Senate Commerce Committee report.

A ban on unauthorized third-party billing for home and business phones would hit revenues at phone companies at a time when their wireline sales numbers are shrinking, but Swanson said drastic action is necessary because other remedies haven't worked.

"Cramming is a significant problem in Minnesota and shows no sign of abating," she wrote the FCC in her petition. "Cramming is one of the most-if not the most-common telecommunications-related complaints that Minnesota consumers have filed with this office in recent years."

CenturyLink, formerly Qwest Communications International, is Minnesota's largest phone provider and has been criticized in the past for failing to deal with cramming. The Monroe, La.-based company said it is in compliance with Minnesota laws.

"If a customer contacts us with concerns about unauthorized charges on their bill, we immediately remove the charges," the company said in response to Swanson's call for a ban on most third-party billing. "If there are repeated concerns about a particular company, we will terminate the billing contract."

The Minnesota attorney general is not alone in calling for an end to unauthorized third-party billing. Attorneys general from 16 other states, led by New York, filed a similar petition Monday.

The 16 states said the most effective solution was to ban all non-telephone-related third-party charges for wireline telephones, which is similar to Swanson's petition. The other states' ban still would allow services like long-distance calls, operator-assisted calls, prisoner calls and dial-around services, such as occurs in the state of Vermont, the petition said.

Swanson's call for a ban also would allow those limited third-party telephone services, but customers would have to opt in before their phone company can add a third-party service to the bill.

The attorneys general filed their petitions Monday to meet a deadline set by the FCC, which started considering new rules in July to deal with cramming.

In her petition, Swanson said telephone companies annually place about 300 million third-party charges on their customers' bills nationwide and process more than $2 billion worth of third-party charges.

Customers with third-party charges "overwhelmingly" report the charges are un-authorized, she added. A survey by the U.S. Department of Commerce of more than 500 individuals and business owners whose bills contained third-party charges showed not one person said the charges were authorized, according to Swanson.

Swanson in January charged Harrisburg, Pa.-based Cheap2Dial with cramming more than 2,500 Minnesotans who had charges worth $179,000 on their bills for long-distance calling they didn't order or use. That lawsuit, filed in Hennepin County District Court, is pending.