Genachowski: “It’s Like Getting a Bill for a Meal you Never Ate”
The FCC continued its streak of implementing consumer empowerment regulations on Friday, April 27 by unanimously approving rules that will combat cramming, or “the illegal placement of unauthorized charges on a consumer’s monthly phone bill.” Despite recent measures by the FCC and Congress to squash fraudulent charges—which consumers often do not even notice—FCC Chairman Julius Genachowski commented, “The bad guys keep trying to rip consumers off.” According to a FCC press release, the new rules will:
- Require telephone companies to notify subscribers at the point of sale, on each bill, and on their websites of the option to block third-party charges from their landline telephone bills, if the carrier offers that option;
- Strengthen the Commission’s requirement that third-party charges be separated from the landline telephone company’s charges on phone bills; and
- Ask whether the Commission should adopt additional protections, such as requiring landline telephone companies to get consumer consent before placing those charges on their telephone bills if the company already offers to block those charges.
Commissioner Mignon Clyburn commented that it is important to educate consumers about cramming so they can “be on the look-out” for these charges, which are especially problematic for low income consumers. Commissioner Robert McDowell added that the new rules will make it easier for consumers to identify fraudulent charges and “shield themselves,” but he warned that new regulations “almost always have unintended effects” and unexpected burdens. Genachowski compared cramming to getting a credit card bill “for a meal you never ate at a restaurant you never went to.”
The new rules will apply to landline carriers, but the FCC will study whether cramming is a problem for wireless carriers, too. Genachowski said “if there’s a problem, we will act.”