******************************************************** 
                      NOTICE
********************************************************

This document was converted from Microsoft Word.

Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.

All text attributes such as bold, italic, underlining, etc. from the
original document will not show up in this text version.

Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.

If you need the complete document, download the
Microsoft Word or Adobe Acrobat version.

*****************************************************************



                                                                   DA 11-1063

                                                                June 16, 2011

                                             Enforcement Advisory No. 2011-08

                                    CRAMMING

              Enforcement Bureau Aggressively Pursuing "Crammers";

   Consumers Advised to Carefully Review Phone Bills for Unauthorized Charges

   Recently, the Federal Communications Commission acted on four major
   investigations by the Enforcement Bureau involving "cramming" - that is,
   placing unauthorized charges on consumers' phone bills. In these cases,
   the Commission proposed very substantial penalties ranging from $1.5
   million to $4.2 million per company, having found that each of the
   companies involved appears to have charged thousands of consumers for
   services that they never wanted, ordered, or used. We are issuing this
   enforcement advisory to remind companies that this agency will not
   tolerate the abuse of consumers by this unscrupulous practice, and to
   emphasize to all who might be involved in such activities that they may
   face very severe penalties. We also urge consumers to be vigilant in
   protecting themselves by thoroughly reviewing their bills, reporting any
   discrepancies promptly, and filing complaints with the FCC.

   What is cramming? Cramming is the practice of adding charges to a
   customer's phone bill without the customer's authorization. These charges
   typically might be as small as $1.99, or as substantial as $19.99 per
   month, and are not generally disclosed clearly or conspicuously on the
   bill. As a result, the charges can go undetected by the consumer for many
   months or even years. The cramming party can be the customer's own carrier
   or an unaffiliated third party. The charges can be from carriers for
   additional phone services, voice mail and similar services, but they may
   also be from non-carriers for unrelated products and services such as chat
   lines, diet plans, and cosmetics.

   What rules prohibit cramming? Section 201(b) of the Act mandates that
   "[a]ll charges, practices, classifications, and regulations for and in
   connection with [interstate and foreign] communication service [by wire or
   radio], shall be just and reasonable...." The FCC has found companies
   liable for including unauthorized charges and fees on consumers' phone
   bills as an "unjust and unreasonable" practice under section 201(b).

   Applying section 201(b) in the recent cases, the FCC found that the
   carriers involved had apparently engaged in constructive fraudulent
   activity as part of a plan to place charges on consumers' phone bills for
   services that the consumers neither requested nor authorized. The
   Commission found the violations to be particularly egregious because of
   the number of consumers affected, and because the companies either knew or
   reasonably should have known that the consumers did not request,
   authorize, or use the services, based on the numerous consumer inquiries
   and complaints they received. Some of the companies were apparently
   billing thousands of consumers, the vast majority of whom had never heard
   of the companies, were unfamiliar with the services they offered, and
   never used the services for which they were billed.

   In addition, carriers should be mindful of the Commission's
   Truth-in-Billing Rules, which require that the billing carrier use clear,
   non-misleading, plain language in describing services for which a consumer
   is charged. The descriptions of charges must be specific enough so that
   customers can assess whether they were billed correctly for services they
   requested and received. The carrier also must identify the service
   provider associated with each charge and must display on the bill a
   toll-free number that a consumer can call to ask about or dispute any
   charge on the bill.

   What can be done to help combat cramming? Billing carriers often become
   aware of unauthorized third-party billing as consumers generally contact
   them first to try to resolve the matter. We strongly urge those carriers
   to take steps to ensure that they bill only for those companies that
   obtain reasonable authorization from consumers before placing charges on
   their phone bills.

   What can consumers do to protect themselves? Consumers should carefully
   review their bills each month, and confirm that any new or unusual charges
   are legitimate. If you see an unfamiliar charge, call the company that
   charged you, as well as the phone company that issued the bill, to get an
   explanation and a bill adjustment if appropriate. We encourage consumers
   to report to us any instances of cramming as these complaints allow us to
   take appropriate enforcement action. Consumers can file a complaint using
   an FCC on-line complaint form at http://www.fcc.gov/complaints. They can
   also file a complaint with the FCC's Consumer Center by calling
   1-888-CALL-FCC (1-888-225-5322) voice or 1-888-TELL-FCC (1-888-835-5322)
   TTY; faxing 1-866-418-0232; or writing to: Federal Communications
   Commission, Consumer & Governmental Affairs Bureau, Consumer Inquiries and
   Complaints Division, 445 12th Street, SW, Washington, D.C. 20554.

   What are the roles of the FCC and the Federal Trade Commission (FTC) in
   protecting consumers against cramming? The FCC has jurisdiction under the
   Communications Act to police the practices of carriers, and the FTC has
   jurisdiction under the Federal Trade Commission Act to address cramming by
   non-carriers. The FCC coordinates with the FTC to ensure that all entities
   involved in third-party billing only charge for legitimate services that
   were authorized by consumers.

   What should businesses do to ensure they are in compliance? The FCC
   encourages businesses to review section 201(b) of the Act, as well as the
   FCC orders cited above as they relate to the placement of charges on phone
   bills. Businesses should consult their own legal counsel with any
   questions pertaining to their particular operations. We expect this
   Advisory will lead to greater compliance with the Act in the charging and
   billing for telecommunications services. At the same time, however, we
   emphasize that section 201(b) provides important consumer protections and
   that we intend to continue to strictly enforce it.

   What happens if companies do not comply with the law? Failure to comply
   with the Communications Act may subject a company to severe penalties
   including, but not limited to, substantial monetary forfeitures.

   Need more information? For additional information regarding compliance and
   enforcement of Section 201(b) as it applies to cramming, you can contact
   Mika Savir at (202) 418-0384 or Erica McMahon (202) 418-0346, of the
   Enforcement Bureau. For general information on the FCC's rules, you can
   contact the FCC at 1-888-CALL-FCC (1-888-225-5322) or visit our website at
   www.fcc.gov. Consumers can also get more information by reviewing our fact
   sheet on cramming at http://www.fcc.gov/cgb/consumerfacts/cramming.html.

   To request materials in accessible formats for people with disabilities
   (Braille, large print, electronic files, audio format), send an e-mail to
   fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at
   202-418-0530 (voice), (202) 418-0432 (TTY). You may also contact the
   Enforcement Bureau on its TTY line at (202) 418-1148 for further
   information about this Enforcement Advisory, or the FCC on its TTY line at
   1-888-Tell-FCC (1-888-835-5322).

                                         Issued by: Chief, Enforcement Bureau

   See Long Distance Direct, Inc. Apparent Liability for Forfeiture,
   Memorandum Opinion and Order, 15 FCC Rcd 3297, 3302, P: 14 (2000). See
   also Cheap2Dial Tel., LLC, Notice of Apparent Liability for Forfeiture,
   FCC 11-90 (rel. June 16, 2011); Main Street Tel. Co., Notice of Apparent
   Liability for Forfeiture, FCC 11-89 (rel. June 16. 2011); Norristown Tel.
   Co., LLC, Notice of Apparent Liability for Forfeiture, FCC 11-88 (rel.
   June 16, 2011); VoiceNet Tel., LLC, Notice of Apparent Liability for
   Forfeiture, FCC 11-91 (rel. June 16, 2011)

   PUBLIC NOTICE

                                       2

                            FCC ENFORCEMENT ADVISORY

   Federal Communications Commission

   445 12th St., S.W.

   Washington, D.C. 20554

                                        News Media Information 202 / 418-0500

                                                 Internet: http://www.fcc.gov

                                                          TTY: 1-888-835-5322