FCC Slaps Four Telephone Companies With $11.7M in Penalties for Bill ‘Cramming’

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The Federal Communications Commission has proposed a total of $11.7 million in penalties against four companies that allegedly billed thousands of customers for long-distance service without their authorization—a practice commonly referred to within the telecommunications industry as “cramming.” The FCC has found that cramming—deceptive billing for unused services, often buried in multi-page phone bills with misleading labels, making it difficult for a consumer to detect them—is an “unjust and unreasonable” practice that violates Section 201(b) of the Communications Act.

The FCC issued the sanctions against Main Street Telephone ($4,200,000); VoiceNet Telephone, LLC ($3,000,000); Cheap2Dial Telephone, LLC ($3,000,000); and Norristown Telephone, LLC ($1,500,000) for adding what is known as “dial-around” long-distance service to bills, which circumvent a customer's normal long-distance carrier.

The FCC Enforcement Bureau's investigation revealed that only a small fraction of the affected customers—about 0.1 percent—actually used the services for which they were charged, but the unlawful billing continued for “months and sometimes years,” according to the agency. The mystery fees at issue typically range from $1.99 to as much as $19.99 per month.

In addition to announcing the penalties, the FCC June 16 also released an advisory warning customers about the practice and pledging vigilant action against bad actors.

By Paul Barbagallo

Request Tech & Telecom on Bloomberg Law