dslreports logo
site
spacer

spacer
 
   
spc
story category
AT&T, Verizon to Ban Third Party Landline Cramming
Several Billions and Many Years Later...
by Karl Bode 10:53AM Thursday Mar 29 2012
While the FCC will occasionally crack down on cramming (the stuffing of consumer wireless or landline lines with bogus charges for often awful or nonexistent products or services), they usually focus on the smaller companies -- ignoring the role larger carriers play in perpetuating these kinds of problems. As we saw last year with Jawa, a company that was running an SMS cramming scheme, carriers often get a little lax on cracking down because they tend to pull in 30% or more of the profits made.

Click for full size
There has been renewed political attention on the multi-billion-dollar cozy cramming ecosystem, however. A recent study by the Senate Commerce Science and Transportation Committee found that consumers were charged $10 billion in third-party fees in just the last five years — with a majority of them unauthorized. The study also found that AT&T, Qwest, Verizon and CenturyLink made at least $650 million as their cut since just 2006.

AT&T and Verizon have faced numerous class actions on this front that haven't appeared to stop the practice, which occurs on wireless bills as well as wireline. Working to shut down the practice a little after the fact, Senator Amy Klobuchar this week announced that both AT&T and Verizon will no longer allow third party charges on landline networks, with AT&T beginning the ban starting in August:
quote:
U.S. Senator Amy Klobuchar today said that AT&T has joined Verizon in putting a stop to phone bill "cramming," which is when a third-party adds unauthorized, misleading, or deceptive charges to a consumer's bill. After Verizon agreed to stop placing third-party charges on landline phone bills, Klobuchar wrote a letter to AT&T and CenturyLink last week urging them to join Verizon and put an end to deceptive billing practices. Verizon’s and AT&T’s announcements come after Klobuchar and other senators have pushed the Federal Communications Commission (FCC) to crack down on carriers that engage in deceptive billing practices like "cramming."
It's nice of AT&T and Verizon to make this move only after they've raked in what could be billions over the last decade and are making a major move away from landline. You'll note CenturyLink, who still actually plans to make a living off of wireline networks, has yet to respond to Klobuchar. You'll also note that nobody has agreed to stop doing the exact same thing on wireless networks, which last year's Jawa SMS scam highlighted is very much an ongoing problem. Perhaps we can take another decade before we serious address it?

view:
topics flat nest 
Chubbysumo

join:2009-12-01
Superior, WI

it still wont stop cramming...

because the carriers make money from it, why are they apt to stop it? chances are, its all just smoke and mirrors for the cameras, with no real changes taking place.

jseymour

join:2009-12-11
Waterford, MI

Had This Problem At Work

The operative word here being "had." About the 3rd or 4th time it happened, I told SBC (it was still called SBC at the time and the real AT&T still existed) that, henceforth, I would instruct the Accounts Payable Dept. to simply deduct the bogus charges and pay the (legitimate) remainder. I told them I would waste no more of my valuable time pursuing getting the bogus charges removed. First they tried insisting that they had no way to stop them. Then they tried threatening me with collections processes and poor credit ratings. I informed them, on no uncertain terms, that if they did either of those things as a result of attempting to charge us for that for which we did not explicitly agree with them to purchase, we'd haul them into court.

They found a way to make the problem go away. Imagine that.

ptrowski
Got Helix?
Premium
join:2005-03-14
Putnam, CT
kudos:4

So how much will the fee be...

How long before you see a Federal Anti Cramming surcharge on your bill?

93388818
It's cool, I'm takin it back
Premium
join:2000-03-14
Dallas, TX

ATT, Verizon, Sprint ban together and cure cancer...

...Karl writes editorial about carriers killing hospice business and closing down cancer treatment centers.

Bill Neilson
Premium
join:2009-07-08
Arlington, VA

Re: ATT, Verizon, Sprint ban together and cure cancer...

said by 93388818:

...Karl writes editorial about carriers killing hospice business and closing down cancer treatment centers.

Well, when they actually do that, maybe Karl will surprise you

Dezbend
Premium,MVM
join:2001-04-20

Unintended Consequences

I am sure this has all been thought through by someone, but this is my first time seeing this. First, let me say, I 100% agree with the idea.

However, I do have some concerns.

There are legitimate 3rd party charges.

What if my significant other is in jail, can I no longer accept collect calls, or will they have to be pre-paid? What if I currently have my DirecTV/Dish billed on my phone bill? Will I lose this convenience? Does this new rule eliminate 10-10 numbers as a viable option to monthly long distance plan? And what of calling an operator, this rule in essence kills ZPDI (zero plus dialing incorporated)?

I would hope questions like these are addressed. Granted the vast majority of 3rd party charges are fraudulent, but there are some that I might want to opt-into.
--
DSLr Mafia Member
Walter Dnes

join:2008-01-27
Thornhill, ON
Reviews:
·TekSavvy DSL

Re: Unintended Consequences

said by Dezbend:

What if my significant other is in jail, can I no longer accept collect calls, or will they have to be pre-paid?

Get them a prepaid 1010 card or give the operator your credit card number when they call.

said by Dezbend:

What if I currently have my DirecTV/Dish billed on my phone bill? Will I lose this convenience?

WTF is your satellite service doing on your phone bill? This is what credit cards are for.

said by Dezbend:

Does this new rule eliminate 10-10 numbers as a viable option to monthly long distance plan?

There are prepaid 1010 cards.

said by Dezbend:

And what of calling an operator, this rule in essence kills ZPDI (zero plus dialing incorporated)?

Get a prepaid 1010 card.

said by Dezbend:

Granted the vast majority of 3rd party charges are fraudulent, but there are some that I might want to opt-into.

To summarize... telephone numbers are being (ab)used as credit card numbers. Anybody can incorporate, set up shop in a hole-in-a-wall, and start sending out billing data to phone companies. This is wrong, wrong, wrong. A phone number should be used for communication, not for billing. That's what credit cards are for.

At least with credit cards, it's a long, hard-to-guess number, pluss there's an additional 3-digit code. Plus you can't guess the name and address of the owner. Phone numbers are published in phone books, along with the subscriber's name and address. This is grossly insecure. Phone numbers should not be billable by 3rd parties, period, end of story. A credit card or prepaid 1010 card will handle all the cases you've mentioned.

WHOknew

@rr.com
GRRRRREAT QUESTIONS! I don't understand why the companies don't just put the "third party bill block" on everyones account and then give each person a chance to lift it if they want it. It's a free block that AT&T (in the former BellSouth region) already offers. I wonder if it has anything to do with them trying to sell off the landline business.
WhatNow
Premium
join:2009-05-06
Charlotte, NC

pick pockets

If the Law would start clamping down on the people that run these hole in the wall and treat them just like pick pockets or robbers on the street. What is the difference from robbing you of $5 or $100 electronically or on the street. They do it because there is very little chance it will cost them anything except the cost of a name change and a new license.
old_wiz_60

join:2005-06-03
Bedford, MA
Reviews:
·Verizon FiOS

They delayed..

because they make a lot of money from the cramming. They don't really care whether or not the charges are legit or not; as long as they can get money they would allow pretty much anything, regardless of whether it's legal or not.

I'm surprised they finally are banning it; maybe they realize there's not enough money in it now or maybe they tired of paying the regulators to overlook their nefarious activities.