Phone "cramming" is costing Americans $2 billion a year

Telephone bills, which contain information for an AT&T customer, lie in a pile May 12, 2006 in Chicago, Illinois.

It's a practice known as "cramming." A third party group will put a charge on your phone bill, often without your knowledge or consent, and take your money. It's often for a service you either don't have or don't know you have. A telephone horoscope service, for instance, or some phantom voicemail option. Third parties are technically supposed to get your permission before adding these new charges. Sometimes they do, often they just do it anyway because historically all they've really needed is your phone number.

The United States Senate has presented the findings of a year-long investigation into cramming and it says the problem is huge. Roughly 300 million third-party charges are applied to consumers each year, costing Americans $2 billion a year, according to the report. The report is unable to pinpoint how many of those charges are fraudulent.

We talk to Tony Romm, who writes about technology for Politico.com. He says Senator Jay Rockefeller (D-W.V.), who authorized the report, has taken up the cause of consumer protection. But Rockefeller's actions come at the same time the Federal Communications Commission is taking up the cause as well. The FCC has been looking into creating new rules to deal with cramming.

We hear from Joel Gurin, chief of the Consumer and Governmental Affairs Bureau at the FCC. He says new rules are being considered because phone companies aren't doing enough to stop this practice. Gurin thinks there should be clear separation on a bill regarding which charges are from the phone company itself and which are add-ons. He also says phone companies should do more to let people block third parties, any third parties, from placing items on a phone bill.

If you think you may have been a victim of cramming, you can file a complaint with the FCC by visiting its online complaint department or calling 1-888-CALL-FCC (1-888-225-5322) or 1-888-TELL-FCC (1-888-835-5322).

Also on this show, a new survey indicates that a third of iPhone owners think they're on a 4G network. They're not. The same survey says 61 percent don't much care what kind of network they're on, so long as it works.

About the author

John Moe is the host of Marketplace Tech Report, where he provides an insightful overview of the latest tech news.

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