Cramming, Slamming, Porting Need More FCC Regulation to Protect Consumers, NARUC Staff Say

Content providers need more checks to eliminate third-party cramming, said Graziano. “There are legitimate uses for third-party billing, and we don’t want to eliminate it, but we do want to eliminate unauthorized charges for wireless,” said Graziano. “The telephone bill has evolved into a debit or credit card without the consumer protections of that card.” Cramming can become different in the wireless ecosystem, said Michael Altschul, CTIA general counsel. “The services are authorized, the bill is set and they work with a content aggregator to provide service to content providers,” he said. “If you read consumer complaints, the fraud that occurs by the content provider is exquisitely sophisticated.”

Wireless devices need a double opt-in procedure to remind customers what they are actually paying for, Altschul told us that he is recommending. Opt-in is when a confirmation message is sent to the wireless device with the name of the service, the price and to confirm the service before purchase, he said. For families, it can be become especially important to opt in for each third-party charge, said Altschul. “This can provide a teachable moment when the parent gets the bill,” he said. “Carriers do keep a no-questions-asked policy to remove charges, but parents need to make sure that they know what their kids are doing.”

The wireline side of cramming also has a no-questions-asked policy to remove cramming charges, said Mike Alarcon, AT&T executive director. The company limited third-party charges on its wireline bills to long-distance calls, operator services and marketing alliance partners, said Alarcon. “We do cramming complaint tracking by provider on a monthly basis to have an early warning system to perceive trends and follow up when necessary.” On the wireless side, AT&T has retained more of its third-party billing practices, said Alarcon. “It’s of tremendous value to customers that they can get content and pay for it through their wireless bill.”

VoIP providers aren’t subject to cramming rules like their wireline and wireless partners, said Glenn Richards, Voice on the Net Coalition executive director. VoIP providers don’t have relationships with third parties to do billing, and the providers have been very clear with their charges even though they don’t have to follow FCC billing rules, said Richards. “VoIP is a highly competitive marketplace, and providers do not necessarily have long-term contracts with consumers,” he said. “The consumer marketplace supplants the need for regulation because customers can go online and talk about their problems with the services.” VON filed comments with the FCC Monday to support non-regulation cramming policy for VoIP providers, said Richards.

More customers are porting their numbers to new carriers in the IP transition world, said Lonnie Keck, AT&T Mobility Solutions manager, in a separate panel. Porting requires two processes where the consumer makes the decision to change carriers and the carrier checks that the consumer has the ability to make the request, said Keck. Porting can go wrong with an inadvertent port, disputed port or fraudulent vanity number port, said Richards. Inadvertent reports can occur because the carriers aren’t going through the entire process to validate porting, said Richards. “Stores are doing porting through entering the telephone number and the ZIP code, which is not a sufficient process, and it can cause some problems with reports,” said Keck.

Porting can also have illegal implications when it comes to buying and selling numbers, said Keck. “Laws have made it clear that you cannot barter and sell numbers, but porting made a way for customers to sell their numbers.” Crooks and black-market elements will “always be with us” when it comes to porting, and to regulate it would negatively affect the “99.99 percent that are doing well,” he said.

More consumer protections are needed to help consumers with the “unreliability and inequality of service,” said Marti Doneghy, AARP senior legislative representative. “No matter how we phrase it, consumers are being harmed and [state telecom] commissions are being challenged by these systems.” While there may be a limited number of complaints in porting and cramming, there are “always a certain number of people who have not taken the time or do not have the means to complain,” she said. It “behooves” the consumer to read as much as possible to understand these processes, but carriers need to hold more responsibility to educate the consumer, said Doneghy. “Consumer protections must move along with the innovation, and defining the vocabulary should not negate or harm the solution.”

A resolution on slamming introduced by California Public Utilities Commissioner Catherine Sandoval was voted to be tabled Sunday until the February meeting in Washington, D.C., by the staff subcommittee in the hopes that the FCC and the state commissions could provide more data on complaints. The proposed resolution was changed to reflect unfair practices when phone numbers are displaced in slamming and cramming, said Sandoval. The resolution was also changed to reflect the need for the FCC and the states to get whole calls rather than the portions of calls currently being reported, she said. More information was also added of FCC Commissioner Ajit Pai on slamming and the FCC Advantage decision from May (http://fcc.us/146L5F8).

Slamming problems exist, but state commissions aren’t collecting enough information on them, said Sandoval. “The FCC rejected slamming complaints on VoIP providers because they have not exercised their jurisdiction for traditional slamming,” she said. “However, this is still considered slamming, and when it happens, it can be extremely difficult for the consumer.” Slamming has created a “regulatory ripple” where numbers have been displaced in the opposite “interest of the states for consumer protections,” she said. While the staff subcommittee recommended the resolution be put on hold, the full Telecom Committee still discussed it at its Monday session.