March 21, 2012
Washington, DC – The National Consumers League today applauded Verizon for its pro-consumer decision to protect its customers from cramming fraud by ceasing to provide third-party billing for most non-telecommunications services. NCL, along with a coalition of allies in the public interest community, has long urged the industry to end wireline third-party billing for so-called “enhanced” services.
“We commend Verizon for taking an important step to protect its subscribers from cramming fraud that affects millions of consumers annually,” said John Breyault, the League’s Vice President of Public Policy, Telecommunications and Fraud. “Third-party billing is the tool that allows cramming to flourish. We would urge other telephone companies to follow Verizon’s lead, heed the advice of consumer groups, the FTC and state attorneys general and end wireline third-party billing once and for all.”
In late 2011, NCL led a coalition of consumer groups in filing comments calling on the Federal Communications Commission to adopt common-sense rules that prohibit third-party billing for “enhanced” services. This system allows unscrupulous scam artists to use consumers’ telephone bills like a credit card, charging them for anything from directory listings to “enhanced fax” and even online diet services.
As the Senate Commerce Committee found in a July 2011 report, industry self-regulatory efforts since the late 1990’s have failed to control an epidemic of cramming fraud. Indeed, the telecommunications industry was found to have profited handsomely from a third-party billing system that enabled fraud to proliferate. In response to the Committee’s findings, NCL called on Congress to enact legislation, based on successful Vermont state law that prohibits wireline third-party billing for services not overseen by the FCC.
While Verizon’s announcement does not apply to third-party billing on wireless devices, NCL would urge the company as well as regulators and legislators to keep a close eye on this platform to ensure that crammers do not simply migrate from wireline to wireless billing systems.
About the National Consumers League
The National Consumers League, founded in 1899, is America's pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.