The state of Vermont has settled two “cramming” lawsuits that will refund more than $900,000 to 12,500 Vermont consumers. Vermont’s Attorney General talks about the settlement and a multi-state effort to curb the third-party billing practice.
Cramming occurs when a third party business places charges on a phone bill without the consumer’s authorization. Attorney General Bill Sorrell announced Tuesday that 2 lawsuits have been settled dealing with the so-called cramming on land lines.
"With this settlement we’ll be sending checks to about twelve thousand five hundred Vermonters, some businesses, mostly individuals, returning over nine hundred thousand dollars to them because they have been crammed. And we've been working on this landline cramming for the last three years. We were the first state in the union, we went to the legislature to essentially ban third-party charges on land lines, so if you get an envelope from the Attorney General 's office late November or early December. Don't throw it away. It might well have a check in it for you."
According to a survey commissioned by the Vermont Attorney General’s office and released earlier this year, 60 percent of area code 802 respondents said third party charges on their bill were unauthorized, more than 55 percent were unaware of third party charges until the survey asked them to refer to their bills. Eighty percent did not know that companies other than their telephone company could charge them for products and services on their bill. Sorrell says while there are a few cases to deal with regarding land-line cramming, his office is now turning its attention to cramming on mobile phone bills.
"Whether it’s data charges, messaging charges or ring tones, things like that, that you might think are free they’re right there on your cell phone bills. Some of the third-party charges aren’t clearly defined. Call your carrier if you’ve got any questions. You can put a block on your cell phone bills so that the third-party charges can’t come on. If you’ve had any now or in the past demand a full refund. But really, be careful about giving out your cell phone number. You think you're getting a free coupon for some restaurant you need to put your cell phone bill in there, you might be setting yourself up for being crammed."
Attorney General Sorrell explains that they are trying to determine how and why mobile service providers allow the third party charges.
"Our office is leading a forty-five state effort to discuss with the big cell phone carriers to understand the scope of the problem and to try to negotiate changes. The carriers they hear from these third-party providers that they have legitimately gotten authority for these charges on their cell phone bills and some of them are total scam artists. You know, I was crammed on my office cell phone account. Other AG 's have checked their cell phone bills and seen these charges they didn't know were there. There are estimates that it might be a two billion dollar a year fraudulent operation, nationwide."
The size of individual refund checks depend on the crammed charge and how long the item was on the bill. The settled cases were against 25 vendors of voicemail, email and other services, 11 principals of the sellers and two other companies accused of facilitating the marketing or placement of the charges.