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Qwest, regulators take aim at 'cramming'

Minnesota Public Radio

by Martin Moylan,

January 25, 2010

St. Paul, Minn. Your phone bill can include charges for a lot more than your normal chitchat. Consumers can choose to pay for a wide range of services by having charges added to their monthly phone bills -- everything from diet plans to charitable contributions.

But some businesses try to slip additional charges onto consumers' phone bills without the consumers' knowledge. And now Qwest is taking action against one firm.

Rachel Scott of Duluth, a Qwest customer, saw a charge on her latest phone bill that puzzled her. It was a charge to Enabill, a payment processing firm that helps third-party vendors collect money from people. Enabill collects it by adding charges to phone bills.

In Rachel Scott's case, the charge was $20. So she called both Qwest and Enabill. It turned out that Enabill was passing on a charge for some service that Scott could not imagine ever ordering.

"They said, 'It's a service which allows you to have private direct contact with celebrities,'" Scott recalled. "How on Earth would something like that show up, because that's about the last thing in the world that I would have possibly signed up for."

Scott figures she got crammed. "Cramming" occurs when a company tries to add charges to a consumer's phone bill without the consumer realizing it.

Cramming charges sometimes appear on a phone bill with ambiguous terms such as "charges and credits" or "enhanced services."

Regulators say cramming is a persistent problem, though they don't receive a huge number of complaints about it. FTC spokeswoman Lois Greisman says cramming is very much on the agency's radar screen.

"The FTC has sued both vendors -- the sellers who try to place unauthorized charges on consumers' telephone bills -- and also the bill aggregators who serve as the third party between the vendor and the carrier," said Greisman.

In the first quarter of 2009, the Federal Trade Commission received about 3,000 complaints about cramming. That's not a lot, given the hundreds of millions of phone lines Americans have, wired and wireless. But it's easy for cramming to go unnoticed.

Cramming charges sometimes appear on a phone bill with ambiguous terms such as "charges and credits" or "enhanced services." That can make people think they're legitimate.

Rachel Scott swears she can't remember doing anything to sign up for the service that promised to hook her up with celebrities.

Qwest has listened to her complaints, and says it'll remove the offending charges from Scott's bill.

"We have really strict laws here that require and enable companies like Qwest to work on behalf of the customer," said company spokeswoman Joanna Hjelmeland. "We will run it down for you. And we will work as your advocate to get unauthorized charges off your bill."

In Scott's case, Qwest also has decided it will no longer pass on charges for the company that dinged Scott for the celebrity entertainment service. The firm uses the names CMI and Headwind Media, and it used Enabill to pass on the charges. Efforts to reach the firms for comment were unsuccessful.

Qwest won't say how often CMI and Headwind Media have been the subject of customer complaints. But Hjelmeland indicated there have been too many, in Qwest's view.

"We have ended our relationship with CMI and Headwind Media. And we will no longer be billing for them as of February 1," she said.

Qwest and regulators such as the FTC and Public Utilities Commission advise consumers to regularly check their bills for charges they didn't authorize or, at least, knowingly approve.

"Contact your local phone company and tell them, 'Hey, this isn't my charge. I didn't authorize it,'" advised Tracy Smetana, a consumer mediator with the state Public Utilities Commission. "What the local phone company should be doing at that point is removing those charges, unless they have documentation from the third party to say, 'Yes, customer A authorized this transaction.'"

Consumers may unwittingly give a business permission to charge them for unwanted services when they fill out sweepstakes entry forms, or use a toll-free service like a date line or psychic line.

Consumers also should be sure to read the front and back of any prize registration form, especially if it asks for a phone number.