 Cramming happens when third-party vendors use consumers' phone
numbers much like a credit card. They 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
requested -- and never used.
House Bill 5211, which now goes to the governor for
consideration, would ban all billing by a third-party company, with
some limited, common-sense exceptions for legitimate services.
Estimates indicate that telephone companies place at least 300
million third-party charges on their customers' bills each year.
According to a U.S. Senate Commerce Committee report, third-party
billing generates at least $2 billion annually.
"For too long, phone companies and scam artists have made
millions by ‘cramming' charges for unwanted and unused services on
subscribers' monthly bills," Madigan said. "This legislation will
finally stop scammers from using our phone number as a credit card
for their fraudulent services by prohibiting phone companies from
placing other companies' charges on our phone bills."
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 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.
"The people of Illinois lose hundreds of thousands of dollars
each year to these telephone bill scams," said Sen. David Koehler,
Senate bill sponsor. "Banning third-party billing is a simple,
common-sense solution to a problem that affects thousands of
Illinois families and businesses."
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"I applaud my fellow lawmakers for their support (Wednesday)," said
Rep. Kelly Burke, House bill sponsor. "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 lawsuits
against crammers, representing more than 200,000 Illinois businesses
and residents who were victim to these phone billing schemes. Among
the most glaring of targets for these scams was cited in Madigan's
2009 lawsuit against US Credit Find Inc., a Venice, Calif.-based
operation, which crammed a Springfield public library's dial-a-story
telephone line. Last summer, Madigan also advocated for a nationwide
ban on phone bill cramming, testifying in July 2011 before the U.S.
Senate Commerce Committee and filing comments with the Federal
Communications Commission.
[Text from file received from the office
of
Illinois Attorney General Lisa
Madigan]
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