With all the ‘excitement’ around ‘pinging’ and ‘snooping’ in Europe, The Insider appears to have overlooked some of the more startling industry headlines in the USA, particularly, about ‘cramming.’
For those of you not acquainted with this quaint term, let me just tell you that ‘cramming’ is the practice of placing unauthorized, misleading or deceptive charges on your telephone bill. The Federal Communications Commission (FCC) in the US says that ‘crammers’ rely on confusing telephone bills in an attempt to trick consumers into paying for services they did not authorize or receive, or that cost more than the consumer was led to believe.
The plot thickens - at a time when we are espousing the exposure of CSP assets, such as billing, to third parties we find that some if them may not be all that scrupulous.
The FCC advises consumers that ‘cramming’ comes in many forms and is often hard to detect unless they closely review their telephone bill. Charges described as follows can be legitimate if they are authorized but, if unauthorized, could constitute 'cramming:'
- Charges for services that are explained on a telephone bill in general terms such as “service fee,” “service charge,” “other fees,” “voicemail,” “mail server,” “calling plan,” “psychic” and “membership;”
- Charges that are added to a telephone bill every month without a clear explanation of the services provided – such as a “monthly fee” or “minimum monthly usage fee;” and
- Charges for an authorized service, but where customers were misled about the actual cost.
Well, that’s all very clear isn’t it? With that description of ‘cramming’ you can imagine the deluge of inquiries to call centers as everybody tries to clarify what may or may not be legitimate charges.
The FCC said roughly 20 million Americans are ‘victimized’ by cramming each year, but that only about 5 percent of those consumers are aware they’re being charged. Those are massive figures.
The Senate Committee on Commerce, Science, and Transportation, last month, released a report showing that American consumers pay nearly $2 billion each year when unauthorized charges are ‘crammed’ on their phone bills.
On average, telephone companies in the US place about 300 million third-party fees on consumer bills each year, most of which are unauthorized. The report also said phone companies have profited by about $1 billion over the last decade from the fees, despite receiving about 500,000 complaints from consumers over the last five years.
The Insider finds these figures staggering and wonders how the telecoms industry has managed to get into this situation firstly, and get away with it for so long. What happened to the days when accurate billing was the first mantra of running a business? What are the overheads that ‘cramming’ generates and how did it get bad enough for Senate Committees and regulators to intervene without the operators themselves addressing the problem? Was it not worth worrying about, not worth the effort and cost to address or was management simply ignorant to the problem and hoped no-one would notice?
Cramming is tantamount to theft and you can bet it will make headlines for months or years to come now that the cat is publicly out of the bag. ConsumerReports.org has even gone as far as producing an online video on “How to prevent and remove 'cramming' charges on your phone bill.”
But who is to blame for ‘cramming’? Is it the CSPs themselves, third-party partners or OTT players that are allowed to bill via the CSPs’ process? Whatever the case, if it appears on an operators bill then the customer, and presumably the authorities, will deem it to be their responsibility.
One has to ask whether the practice is only to be found in the USA. Probably not! CSPs worldwide may want to take this opportunity to check their own billing procedures or increase their marketing budgets to try and counter what will be a massive press and consumer bashing as more ‘cramming’ cases come to light.
Posted
08-01-2011 2:53 AM
by
The Insider