Madigan Warns of Phone Cramming

HB5211 would ban all billing by a third-party company

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    Illinois Attorney General Lisa Madigan wants to put an end to third-party companies using consumers' phone numbers like credit cards, charging them for "things they never ordered and don?t want, and profiting to the tune of $2 billion each year." (Published Monday, March 5, 2012)

    To those who've ever had an odd, third-party charge appear on a telephone bill: Illinois Attorney General Lisa Madigan understands your frustration and is trying to put an end to it.

    "Phone bill cramming is one of the most pervasive scams today," said Madigan. "Scam artists use consumers’ phone numbers like credit cards, racking up charges for things they never ordered and don’t want, and profiting to the tune of $2 billion each year."

    As part of National Consumer Protection Week, Madigan was joined by representatives from the
    Federal Trade Commission, the Chicago Better Business Bureau and other consumer advocates to draw attention to Cramming.

    Phone cramming scams originally were perpetrated primarily through telemarketers, especially before the Do Not Call registry was established. More recently, however, the scam has flourished online. Internet users report simply submitting their phone number, among other personal information, for online prize drawings, surveys or free recipes. Weeks or months later, consumers find charges on their phone bills for unauthorized services.

    "Only a statewide ban on third-party charges will put an end to this scheme," she said.

    A bill she's pushing with Rep. Kelly Burke (D-Oak Lawn) and Sen. David Koehler (D-Pekin) -- HB5211 --  would ban all billing by a third-party company but allow limited, common sense exceptions for legitimate services. If passed, Illinois would become only the second state in the nation with such legislation, she said.

    The bill last week cleared committee and was sent to the full House chamber.

    Estimates indicate that telephone companies place at least 300 million third-party charges on their customers’ bill each year. According to a U.S. Senate Commerce Committee report, third-party billing generates at least $2 billion annually.