David Spofford, CEO of Xigo LLC in Manassas, Va., testified his company has offered advice to businesses about telephone services for 20 years, including how to identify and avoid unauthorized charges.
"I have never seen cramming as bad as it is today," Spofford said. "Eighty percent of all businesses experience cram charges. But since the average cost is so small, people often simply just pay the charge."
The questionable "services" offered include saving voice messages, emails, directory services and Web posting.
"More than 99 percent of these charges are unauthorized by the customer and are for services they are not receiving," Spofford testified. "Large retail chains are particularly hardly hit."
Walter McCormick Jr., president and CEO of the U.S. Telecom Association, testified telephone companies "acknowledge the existence of a continuing problem -- one that impacts consumers and has continued for many years."
McCormick told the Senate committee members of his organization are willing to "cooperate in your efforts to eliminate cramming.... Consumers should not be charged for services they did not purchase."
Rockefeller said telephone companies themselves make about $200 million a year in fees paid to them by crammers.
He asked McCormick, "Why haven't you cleaned up this act?"
McCormick said, "I don't know the answer to that question. The industry has taken significant steps. There has been improvement, but it remains a very significant problem.
"Once you identify a scammer, the scammer comes back in another disguise, changing their name and changing the type of service they provide."
Today, most crammers focus on adding fees to telephone landlines, rather than cellphones. But Spofford said he believes things will soon "get much worse on the wireless side."
Reach Paul J. Nyden at pjny...@wvgazette.com or 304-348-5164.