Chicago — Attorney General Lisa Madigan today joined with theFederal Trade Commission, Chicago Better Business Bureau and consumer advocatesto warn Illinoisans about a scam known as phone bill ‘cramming’ that has hithundreds of thousands of consumers and businesses with bogus charges on theirphone bills.
“Phone bill cramming is one of the most pervasivescams today,” Attorney General Madigan said. “Scam artists use consumers’ phonenumbers like credit cards, racking up charges for things they never ordered anddon’t want, and profiting to the tune of $2 billion each year. Only a statewideban on third-party charges will put an end to this scheme.”
Joining Madigan in Chicago to recognize NationalConsumer Protection Week were Steven Baker, director of the FTC Midwest Region;Steve Bernas, president and CEO of the BBB of Northern Illinois and Chicago;David Kolata, executive director of Citizens Utility Board; Bob Gallo, AARPIllinois director; and Lynda Delaforgue, co-director of Citizen Action/Illinois.
Phone bill cramming is a scheme that has persistedacross Illinoisand the country in which third-party vendors use phone numbers much like acredit card. The vendors add charges to phone bills for bogus products orservices, such as identity theft protection, website design or email service,that consumers and businesses never asked for or wanted – and never used.
Estimates indicate that telephone companies place atleast 300 million third-party charges on their customers’ bill each year.According to a U.S. Senate Commerce Committee report, third-party billinggenerates at least $2 billion annually.
“In today’s computerized fast moving world, accountnumbers represent who and what we are and what you will be charged for. Forbetter or for worse, it’s a fact of modern life and cramming is an insidiousmethod of stealing or redirecting your personal information just as much asyour credit card account numbers or your social security number,” said Steve J.Bernas, president and CEO of the Better Business Bureau serving Chicago andNorthern Illinois. “Consumers and businesses alike must check their invoices,and question changes or unexpected charges immediately to mitigate potentialcost or service changes brought on by these cramming activities.”
This year, Madigan is working with state Rep. KellyBurke and Sen. David Koehler to pass and implement House Bill 5211 that wouldput an end to cramming. The bill would ban cramming – all billing by athird-party company – but include limited, common sense exceptions forlegitimate services.
To date, the Attorney General’s Office has filed 30lawsuits against crammers, representing more than 200,000 Illinois businesses and residences who werevictim to these phone billing schemes. Apparently no one is safe from crammers.Take, for example, Madigan’s 2009 lawsuit, which showed US Credit Find Inc., aVenice, Calif.-based operation, crammed, among other targets, a Springfield publiclibrary’s dial-a-story telephone line.
Phone cramming scams originally were perpetratedprimarily through telemarketers, especially before the Do Not Call registry wasestablished. More recently, however, the scam has flourished online. Internetusers report simply submitting their phone number, among other personalinformation, for online prize drawings, surveys or free recipes. Weeks ormonths later, consumers find charges on their phone bills for unauthorizedservices.
Attorney General Madigan has previously advocated fora nationwide ban on phone bill cramming, testifying last July before the U.S.Senate Commerce Committee and the Federal Communications Commission.
