U.S. Senate Probes Telecom Cramming Problem

Karen Thatcher, CEO

I ran across an article the other day regarding the fact that members of the U.S. Senate were now looking into the “unauthorized charges” that are mysteriously showing up on consumer phone bills – to the tune of about $2 billion per year.

My first thought after reading the article was….”where have these guys been for the last 15 -20 years?”

Of course these mysterious charges are not new to the world of telecom, especially those of us in the telecom auditing and bill management side of the industry.

The fraudulent practice is commonly referred to as “cramming” and it is a topic that we have been writing and teaching about for years in telecom fraud articles as well as a part of our telecom auditing workshops.  Cramming is now apparently getting bad enough to warrant a federal investigation.

What is Cramming?

Cramming is a widespread practice whereby third-party billing companies fraudulently add unauthorized charges to land lines and cell phone bills.   We have uncovered crams within virtually every telecom audit we have conducted over the last 20 years.

Removing crams is not difficult, but keeping them off future bills can be a challenge due to the fact that they have a tendency to reappear within months after being removed.  The third-party businesses that fraudulently place these unauthorized charges on bills were  most likely created for the sole purpose of exploiting these  methods to generate all, or at least most, of their revenue.

Telecom Carriers Make Huge Profits From Cramming

Many telecom carriers now offer third-party bill blocking to help prevent crams from appearing on bills. For the most part, however, these same carriers are against legislation to control third-party billing.  Even though the practice of cramming is completely fraudulent, the major carriers  are make millions processing these charges for third-party vendors.

According to a recent report, telephone companies over the last decade have generated more than $1 billion in revenue from the practice. AT&T, Qwest and Verizon have earned more than $650 million over the last five years through cramming.

Cramming continues to be a problem for both consumer and businesses, but I doubt that the federal government will have much of an effect on stopping the practice of fraudulent charges to phone bills.   The best defense is to simply examine your phone bills on a regular basis to identify charges that should not be there.

If you are a business owner, now is the perfect time to conduct your own telecom audit.  I am certain that you will find savings by removing crams from your bills.  If you are new to telecom auditing, make plans to attend one or our telecom auditing workshops this fall.   These 2-day events will give you the knowledge to keep those bills clean – now and into the future.

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