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Posted at 11:00 AM ET, 06/20/2011

FCC chair proposes rule to prevent phone cramming

The chairman of the Federal Communications Commission said Monday that he will propose an order aimed at reducing unauthorized fees on phone bills.

FCC Chairman Julius Genachowski said that he will propose ways to make traditional phone bills clearer so consumers can better identify line items that they didn’t authorize.

The practice, called cramming, affects an estimated 20 million land-line phone users a year, Genachowski said at a speech at the Center for American Progress.

Genachowski did not offer many details on his proposed order, but said he would issue an order for the agency to explore ways to bring down cramming complaints. The proposal follows a push to prevent “bill shock,” when cellphone users incur surprisingly higher data charges by exceeding their monthly Web access and texting allotment.

The wireless industry is expected to resist further regulation over their billing practices. Trade group CTIA has argued that bill shock rules would bog down their businesses and is unnecessary.

The FCC last week proposed action against cramming, advising $11.7 million in penalties against four companies that allegedly charged thousands of customers for long-distance services without authorization.

The companies — Main Street Telephone, VoiceNet Telephone LLC, Cheap2Dial Telephone LLC and Norristown Telephone — are accused of adding “dial-around” long-distance service to customers’ bills, which bypasses a customer’s normal long-distance carrier. Such services often require a customer to dial an access code that often begins with “10-10.”

By  |  11:00 AM ET, 06/20/2011

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