Chairman Rockefeller Announces Investigation into Telephone "Mystery Charges"

December 17, 2010

Chairman Rockefeller

WASHINGTON, D.C.—Chairman John D. (Jay) Rockefeller IV today announced that the Senate Commerce Committee is conducting an investigation into “cramming,” a deceptive practice that involves placing unauthorized “mystery charges” on telephone bills.

In June, Chairman Rockefeller sent letters to three telephone companies—AT&T, Qwest, and Verizon—and requested information from them to better understand their awareness of the “cramming” problem and the steps they have taken to address it. As part of the investigation, Chairman Rockefeller asked for a list of the companies that are allowed to place third-party charges on their customers’ telephone bills. Although the investigation is ongoing, Chairman Rockefeller is making the investigation public because an initial review of the companies placing third-party charges on consumers’ telephone bills has raised serious concerns.

The Committee’s initial review has found that:

  • A significant percentage of the companies placing third-party charges on consumers’ telephone bills have “cramming” complaints from consumers filed with the Better Business Bureau, the Federal Trade Commission, the Federal Communications Commission, and various consumer-oriented websites.
  • More than 250 of these companies have a “D” or “F” rating from the Better Business Bureau.
  • Many of these companies are charging telephone customers for “services,” like e-mail, online photo storage, and voice mail that are either offered for free on the Internet or can be provided to customers through their preexisting telephone service.
  • While hundreds of different companies place third-party charges on American consumers’ telephone bills, many of these companies appear to be controlled by just a few companies. For example, a Florida company called daData, Inc., appears to control and operate as many as 30 different companies that charge consumers’ phone bills.

The Committee is taking the following steps in response to these findings: 

  • Sending requests for information to three companies that appear to have relationships with multiple companies that have “cramming” complaints
  • Continuing the ongoing investigation into AT&T, Qwest, and Verizon to understand the telephone companies’ role in “cramming”

“Protecting American consumers is one of my top priorities,” Chairman Rockefeller said. “My Committee will continue to investigate businesses that engage in unscrupulous practices that harm hardworking Americans and we will not stop until consumers are no longer subjected to them. Last year, we put an end to an online practice that cost Americans more than a billion dollars in unauthorized charges on their credit and debit cards.  I’m continuing this fight - if unauthorized charges are being placed on consumers’ telephone bills, I’m going to put a stop to it.”

Today, Chairman Rockefeller sent letters to three companies that apparently own or are partnered with companies that generated a significant number of consumer “cramming” complaints. The letters can be found below.