By Pamela M. Prah
WASHINGTON -- States are stepping up efforts to help consumers who find mysterious, and usually bogus, charges on their phone bills.
Some 12,500 Vermont households and businesses are receiving refund checks this month totaling more than $900,000 for illegitimate charges that appeared on their landline phone bills.
These victims of "cramming" got their money back as part of a $1.6 million settlement between the state and 25 sellers of voicemail, email and other services. But in many cramming cases, people don't get refunds - and might not even know they were swindled at all.
As many as 20 million people are crammed each year, but only about 1 in 20 realizes it, the Federal Communications Commission estimates. Cellphone and landline cramming could cost consumers up to $2 billion a year.
Vermont and Illinois are the only states that ban third-party charges on landline phone bills. But state attorneys general from 43 other states are joining an effort to tackle the growing problem of cramming on cellphones. More than one-third of American homes (35.8 percent) had only wireless phones in 2012, up from less than 5 percent in 2003, government data show.
More information on avoiding mystery charges is available from the Federal Trade Commission. Cramming victims also may file a complaint with the Federal Communications Commission.
Cellphone cramming often begins when a consumer receives a text message with an offer to enter a contest. By replying, the consumer unknowingly signs up for a monthly, weekly or daily service that provides the latest weather, traffic, news, sports or celebrity gossip. The charge for this "service" ends up on the consumer's cellphone bill, often labeled as a "premium text message."
Some cramming charges can be as small as $2 or $3 per month and easy to overlook, but others can total as much as $24.95. Even consumers who do not text have been crammed. Often, these consumers are elderly.
The elimination of cellphone cramming should be "a consumer protection priority," attorneys general from 40 states said in a letter they sent earlier this summer to the Federal Trade Commission. The effort was led by Vermont Attorney General William H. Sorrell, a Democrat, and Indiana Attorney General Greg Zoeller, a Republican.
Texas Attorney General Greg Abbott, a Republican, last month filed a lawsuit against four "content providers" who were behind a cramming scam. But Abbott also sued a company, Mobile Messenger U.S. Inc., that handled billing for cellphone carriers. Abbott's expanded focus has attracted the attention of wireless carriers, the cellphone industry and other states.
"Rather than acting as a gatekeeper to keep the bad content providers out as expected by the carriers, Mobile Messenger continues to facilitate the deceptive conduct by allowing the defendant content providers to continue to deceptively bill consumers," Texas said in its lawsuit.
Wireless carriers do not usually interact directly with content providers, but they do enter into contracts with companies such as Mobile Messenger.