 "Phone cramming is a $2 billion annual business for scam artists
preying on all types of telephone customers, from residential users
to small businesses, nonprofit organizations to government agencies,
most of who have never realized they've been scammed," Madigan said.
"The only way to stop this scheme is by enacting a ban on
third-party charges to our phone bills."Madigan said
House Bill 5211 would put an end to phone cramming, a problem
that has persisted across Illinois and the country. Cramming is a
scheme in which third-party vendors use phone numbers much like a
credit card. The vendors add charges to phone bills for bogus
products or services, such as identity theft protection, website
design or email service, that consumers and businesses never asked
for or wanted -- and never used. Estimates indicate that telephone
companies place at least 300 million third-party charges on their
customers' bill each year. According to a U.S. Senate Commerce
Committee report, third-party billing generates at least $2 billion
annually.
"I applaud my fellow lawmakers for their support today," said
state Rep. Kelly Burke, House sponsor of the bill. "This legislation
will better protect consumers from a scheme that uses their phone
numbers like a credit card and has cost them millions of dollars in
unauthorized charges."
To date, the attorney general's office has filed 30 lawsuit
actions against crammers, representing more than 200,000 Illinois
businesses and residences that were victim to these phone billing
schemes. Take, for example, Madigan's 2009 lawsuit against US Credit
Find Inc., a Venice, Calif.-based operation that crammed, among
other targets, a Springfield public library's dial-a-story telephone
line.
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Phone cramming scams originally were perpetrated primarily through
telemarketers, especially before the Do Not Call Registry was
established. More recently, however, the scam has flourished online.
Internet users report simply submitting their phone number, among
other personal information, for online prize drawings, surveys or
free recipes. Weeks or months later, consumers find charges on their
phone bills for unauthorized services.
HB 5211 would ban cramming -- all billing by a third-party
company -- but includes limited, common-sense exceptions for
legitimate services.
Attorney General Madigan has previously advocated for a
nationwide ban on phone bill cramming, testifying last July before
the U.S. Senate Commerce Committee and the Federal Communications
Commission.
[Text from file received from the office
of
Illinois Attorney General Lisa
Madigan]
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