Skip to Content

Hidden Charges Crammed Into Your Phone Bill

The charges themselves appear innocently on your phone bill as something vaguely described, such as "$1.99 service fee." Insidious fees like this are typically small in dollar amounts but appear on your bill month after month, adding up to big dollars. Some are brazen, appearing as $19.99 for “ringtones” or some other service.

Suspect you might have hidden like this charges on your phone bill? Even if you don't you should sure check. Get out the most recent copy of your home (or office) phone bill and look for items labeled “services” or “service fees” or even “subscription.” If you don't remember asking for any of these things, you may have unauthorized charges on your bill.

Cramming

These mystery fees and charges are described as “cramming.” Cramming has been going on for at least 10 years and costs the public approximately $2 billion a year, according to the Senate Commerce Committee. Third-party vendors use the practice to bilk you out of your money, applying unwanted charges to your phone bill. In many cases, you may not have even asked for any service even remotely related to the charges shown. What's worse, the FCC estimates that only 5 percent of cramming victims ever notice the charges.

On July 12, 2011, the FCC (Federal Communications Commission) voted to get the opinion of the public on possible new rules targeting these hidden charges. The Senate Commerce Committee held a hearing the next day, reviewing the history of cramming and shocking abuse by third party billers.

Your Phone Number Works like a Credit Card

A report provided for the meeting shows that phone companies can allow third party billers to use your phone number like a credit card, charging you for anything they want. Because your phone number may be public, it's begging for fraud. Imagine if the bad guys could just look up your credit card number and the three-digit code on the back in a public directory. Cramming is essentially just that.

Making Profit from the Hidden Fees

Certainly, the third-party companies imposing or adding their fees and charges to your phone bill are making a profit, but the major phone companies are making upwards of $650 million as well, states committee chairman Sen. John Rockefeller. “Oh yeah, they make A lot of money” he quotes. With profits like these, it’s no wonder the major phone companies have been slow at best to fix the third-party billing scam. Perhaps in the ongoing onslaught of phone company solicitations, they might wish to mention their allowable involvement in third party billing so you might may a more informed decision.

According to Illinois Attorney General Lisa Madigan "Consumers don't know that their phone bill can be used like a credit card," "From the beginning, third-party charges on phone bills have been an open invitation to fraud and deceit. It's been a scam." The FCC has estimated approximately 20 million consumers are being victimized each year by fraudulent third-party charges

Certainly, many legitimate companies offer free trials, bonuses and exclusive deals. The problem comes in when the “free trial” becomes a monthly subscription, even though you only asked for the free trial period. Some crooks are so brazen, they simply add charges to your bill, whether you asked for a service or not. It could be as simple as submitting your phone number on a Web form. Unfortunately the practice of cramming, once solely aimed at landlines has become increasingly more popular among cellular service. 

Combating Unauthorized Charges

The FCC introduced three new rules on July 12, geared towards stopping crammers from adding unauthorized charges to your phone bill. The first is line separation, whereby the phone companies will be required to use a separate section of the bill to clearly show all third party charges. If phone companies refuse to block unauthorized charges, they must tell consumers about it, and they can't charge customers for blocking services. Lastly, all phone bills and phone company websites would have the FCC complaint contact information making it easy for consumers to report problems.

Protect Yourself

Don't wait for the law to change. Call your phone provider right now, whether you found cramming on your bill or not, and ask them to block all third-party billing. Many companies already offer such services. Verizon, for example, made blocking very easy when I got crammed. A quick phone call credited back all charges and put a block on all future third-party billing requests.

Continue monitoring your phone bill every month. Just because they tell you they will block third party billers, it doesn't mean they will. If you find any problems, call right away and don't letter these scammers and crammers get away with it!

Tim Iandoli is a promising new freelance writer. He writes about personal finance, insurance, travel, food, wine and self-improvement. He's a master problem solver, restaurant critic, entrepreneur and all around fabulous guy.

 

 

Related Tips

A look at the Big Four…Where Can You Get the Cheapest Cell Phone Plan? The four major cell phone providers in the U.S. offer vastly different performance and pricing, depending on where you live and the type of phone you choose...
Don't mind ads? Lower your phone bill with this free service A while back, SavingTools introduced you to talkster...
Theft Protection for Your Wallet As we go about our daily routines, most of us carry either a wallet or a purse...
Cell Phone Insurance - Do You Really Need It? There is no doubt that cell phones have become an integral part of most people's daily lives...