Thursday, July 14, 2011

Report: Unauthorized phone charges cost Americans $2 billion a year - CNN.com

Report: Unauthorized phone charges cost Americans $2 billion a year - CNN.com

A key Senate chairman says Congress needs to pass legislation to protect customers from unauthorized third-party charges on their phone bills because the telephone industry has failed to prevent the practice.

Sen. Jay Rockefeller, D-West Virginia, said a one-year study by the Commerce, Science and Transportation Committee shows about $2 billion a year in "mystery fees" show up on the landline phone bills of Americans, a problem known as cramming.

The Commerce Committee's report says phone companies receive a small fee -- often just a dollar or two -- for allowing charges from third-party vendors to appear on their bills. But due to the large number of customers the charges eventually add up.

AT&T, Verizon and Qwest made $650 million during the past five years, according to the report.

"My office has yet to see a legitimate third-party charge on a bill," said Madigan, who added most customers don't detect the charges on their bills.

When third-party vendors are contacted they claim the charges were authorized by customers and they often say they have audio recordings of the customer giving the OK, Madigan said.

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