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Proposed Changes to Address Cramming in Telecommunications - FCC NPRM 11-106

The FCC's Notice of Proposed Rulemaking (NPRM) 11-106 aims to combat "cramming," the unauthorized charging on telephone bills, often from third-party vendors. Released on July 12, 2011, the NPRM outlines new requirements for wireline and CMRS carriers including transparency in billing and customer notification about complaint processes. Initial comments are due by October 24, 2011, with reply comments by November 21, 2011. Your participation is encouraged to ensure effective consumer protection against fraudulent charges.

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Proposed Changes to Address Cramming in Telecommunications - FCC NPRM 11-106

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  1. CRAMMING NPRMFCC 11-106 John B. Adams Policy Division Consumer and Governmental Affairs Bureau 202-418-2854

  2. Cramming NPRM; FCC 11-106 • Ex Parte Issues • 47 C.F.R. 1.1206 • Anything substantive must be summarized in writing filed within 2 days • Summary must list each and every person participating in meeting • Strongly encourage everyone to save substantive remarks for comments • Feel free to ask questions about NPRM

  3. Cramming NPRM; FCC 11-106 • Adopted and released July 12, 2011 • Comment dates: • Initial Comments: October 24, 2011 • Reply Comments: November 21, 2011

  4. Cramming NPRM; FCC 11-106 • Cramming: • Placing unauthorized charges on telephone bill • Usually third-party charge • Can be carrier charge • Often fraudulent

  5. Cramming NPRM; FCC 11-106 • Amends Truth-in-Billing Rules • 47 C.F.R. 64.2400 – 64.2401 • Proposed Rules • 3 proposed requirements for wireline carriers • 1 proposed requirement for CMRS carriers • Reflects complaint numbers (82% wireline; 16% CMRS) • Other issues for comment

  6. Cramming NPRM; FCC 11-106 • Wireline: if offer customers ability to block third-party charges, must inform customers on bill, on website, at point of sale • Many wireline carriers already offer, but not inform customers until crammed • Many customers unaware of third-party charges • Questions: • Formatting: apparent to reasonable consumer • Fees • Other

  7. Cramming NPRM; FCC 11-106 • Wireline: place third-party charges in distinct section of bill, separate from carrier charges • TIB rules: separate by carrier • Questions: • Separate listing of third-party charges on page 1 • Other ways highlight third-party charges • Additional description of biller

  8. Cramming NPRM; FCC 11-106 • Wireline and CMRS • notify customers that complaints can be filed with FCC • provide FCC complaint contact info (telephone number and website address ) on bills and carrier websites • websites include link to FCC’s webpage for filing complaints • GAO report: consumers not know where to complain

  9. Cramming NPRM; FCC 11-106 • Other issues for comment • Apply same rules to wireline, CMRS, interconnected VOIP a/k/a Internet phone • Disclose contact info for third parties • Require wireline to block third-party charges upon customer request • Wireline disclose if do not offer blocking of third-party charges

  10. Cramming NPRM; FCC 11-106 • Other issues for comment • Prohibit all third-party charges on wireline bills • Screen third-parties for prior violations of state and federal law before agree to bill for them • Improve federal-state coordination • Information sharing • State enforcement and legislation • New and updated info about extent of cramming

  11. Cramming NPRM; FCC 11-106 • Other issues for comment • Define “service” or “service provider” in TIB rules or use different term • TIB rules refer to charges from “service provider” • Loophole? • Request specific rule language • Accessibility

  12. Cramming NPRM; FCC 11-106 • Senate Commerce Committee • Hearing on July 13, 2011 • Chairman Rockefeller stated intent to introduce bill to prohibit third-party charges • Questions raised about efficacy of existing voluntary industry guidelines versus state prohibitions • Industry argued in favor of self-policing, but admitted cramming still a problem • Attorneys General argued for regulation (ban preferred)

  13. Cramming NPRM; FCC 11-106 • Senate Commerce Committee Staff Report • Key Findings (per Press Release 7/12/11) • Third-party billing is billion dollar industry • Most third-party charges appear fraudulent • Telephone companies profit from cramming • Cramming affects entire wireline customer base • Many third-party vendors are illegitimate and created solely to exploit third-party billing

  14. Cramming NPRM; FCC 11-106 • Senate Commerce Committee Staff Report • Key Findings (per Press Release 7/12/11) • Telephone companies are aware that cramming is major problem on their bills • Telephone customers reported negative experiences with seeking assistance from telephone companies • Industry anti-cramming efforts largely failed

  15. Cramming NPRM; FCC 11-106 • Senate Commerce Committee website: http://commerce.senate.gov/public/ • Resources include: • Committee Staff Report • Press Releases • Video of hearing

  16. Cramming NPRM; FCC 11-106 • Questions

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