Markets Wired

The Federal Trade Commission will host a forum on May 11, 2011, in Washington, DC, examining how the government, businesses, and consumer protection organizations can work together to prevent consumers from being hit with unauthorized third-party charges on their phone bills, a practice known as “cramming.”

The FTC brings law enforcement actions against companies engaged in billing consumers for goods or services they never ordered or wanted.  For example, in September, 2010, at the FTC’s request, a District Court shut down a company engaged in unauthorized cramming of charges for Internet services and required defendants to pay $38 million in restitution. Cramming, however, continues to harm individuals and small businesses. The FTC is holding this forum to determine what more can be done to prevent it.

The forum will be held at the FTC’s satellite building conference center, located at 601 New Jersey Avenue, N.W., Washington, D.C.  It will be open to the public.

Government agencies, consumer advocates, and industry representatives are invited to participate in the forum to discuss ways to reduce cramming through business practices, law enforcement and possible legislation. Participants will be asked to take up specific ideas such as allowing consumers to request a block on all third-party billing, and requiring third parties to get written approval from consumers before placing charges on their phone bills.

Other issues forum participants will discuss include:

• how telephone bill cramming harms individual consumers and small businesses;
• how consumers and competition can benefit from third-party billing on telephone bills for products and services such as voicemail, developing or hosting websites, or other enhanced services;
• the steps that billing companies and telephone carriers currently take to detect, monitor, and prevent cramming;
• best practices being used by the industry to reduce cramming, such as improving disclosure of third-party charges to consumers; and
• the types of goods and services charged on telephone bills, and the difference between landline and wireless billing practices.

The FTC invites interested parties to submit requests to be panelists by sending an e-mail to crammingforum{at}ftc{dot}gov by March 4, 2011.  Requests should include a statement detailing any relevant expertise in working on or studying cramming, especially the topics specified above, and complete contact information.  Panelists selected to participate will be notified by April 8, 2011.

The FTC also invites those interested to submit comments online on any of the topics mentioned above.