WASHINGTON, D.C.—Chairman John D. (Jay) Rockefeller IV issued the following statement today after Verizon notified him that it has agreed to stop placing third-party charges for enhanced services on its customers’ landline telephone bills:
“Verizon has stepped up for consumers in a big way today. Verizon will no longer permit unwanted billing by mysterious third-parties on customers’ landline phone bills. A major Committee investigation last year revealed that telephone customers have been tricked into paying for third-party services they didn’t want or use or even know they were being billed for. This abusive practice—known in the industry as ‘cramming’—took advantage of individual consumers and small businesses, and it had to change. Verizon is the first in the industry to put a stop to third-party billers for the sake of its customers following the Committee’s investigation. I hope they will move as quickly as possible to put this pro-consumer policy in place, and I strongly and urgently call on other companies to follow their lead. I also urge Congress to move forward with legislation to end cramming on all landline telephone bills once and for all, and I will be introducing that bill in the coming days.”
Last year, the Commerce Committee completed a year-long investigation into cramming, which showed that third-party billing through landline telephone bills was a $2 billion a year industry. The report showed that, during the last 5 years, phone companies billed more than $10 billion in third-party charges and that a large percentage of these charges appeared to be wholly unauthorized and a result of cramming. The investigation demonstrated that third-party billing has largely failed as a payment method and its failure has cost everyday Americans, small businesses, charities, and local governments billions of dollars in bogus charges on their telephone bills. More details about the Commerce Committee’s cramming investigation can be found here.