THE TELECOMMUNICATIONS INDUSTRY HAS OVERtaken the sweepstakes industry for the dubious title as The Most Complained About Industry.
From January through June of this year, the National Fraud Information Center received 2,071 cramming reports, plus hundreds more calls from consumers with a cramming problem but not enough details for the NFIC to file a formal report. The Federal Trade Commission defines cramming as unexplained charges on a consumer's telephone bill for services never ordered, authorized, received or used.
"Cramming wasn't even among the 1997 top frauds," according to NFIC Director Susan Grant. "[N]ow it's outnumbered the second most-reported scam, slamming, two-to-one." (Slamming occurs when customers have their long-distance provider switched without their authorization or knowledge.)
According to Eileen Harrington, the associate director for marketing practices in the FTC's Bureau of Consumer Protection, "The advent of pay-per-call [technology] marked the beginning of the use of the telephone billing and collection system as a means for consumers to pay for products or services other than telephone transmissions."
While abuses in that area eventually led to the Telephone Disclosure and Dispute Resolution Act of 1992 (15 U.S.C. sec. 5701 et seq., and 47 U.S.C. sec. 228), it remains to be seen whether legislation or industry self-policing will help solve the cramming problem. Both the Federal communications Commission and the Federal Trade Commission appear receptive to a move in Congress to give them more authority to act, but local exchange carriers oppose specific federal regulations or legislation.
The Scope of Fraud