Some unlucky Vermonters who inadvertently paid fraudulent phone charges will enjoy a slight reversal of fortune in early December. The state will mail checks totaling more than $900,000 to distribute settlement money from two lawsuits against 38 “crammers” — businesses that sneak unauthorized third party charges onto the bills of unsuspecting phone customers.
Attorney General Bill Sorrell announced the settlement Tuesday morning at a press conference in Montpelier. In addition to nearly $1 million of refunds, the companies will pay about $725,000 to the state as a hybrid fine and compensation for attorney’s fees, bringing their total payment to about $1.625 million.
Sorrell said the settlement raises the state’s tally of recovered cramming charges to $2.3 million, distributed among more than 25,000 residents.
In 2010, the Vermont Legislature banned nearly all third-party charges to landlines. The settlement announced today wraps up the state’s efforts to scrub landline bills clean. Sorrell said his staff is now investigating cramming of cell phone bills.
“The message today is: If you have a cell phone, be concerned that you’re being crammed or that you could be,” Sorrell warned.
He cited a 2013 survey conducted by the University of Vermont, commissioned by his office, that indicated 60 percent of the third-party charges on Vermont cell phone bills were unauthorized. Nearly 80 percent of respondents said they did not know such charges could be placed on their bills.
Sorrell empathizes.
“I don’t mean to pick on AT&T,” Sorrell said, “but if AT&T is your carrier, you’re assuming … what is on the bill from AT&T (is) for services provided by AT&T. And that’s what we’re here to say is not necessarily the case.”
Verizon and AT&T dominate nearly half of Vermont markets for residential and non-residential cell phone service, respectively. According to a 2012 Telecommunications Survey Report by the Public Service Department, 74 percent of Vermont households have at least one cell phone, and 57 percent of businesses subscribe to wireless phone plans.
Nationwide, cramming of both landline and mobile phone bills accounts for about $2 billion each year, according to Consumer Reports. Sorrell’s office estimates that would equate to about $4 million per year in Vermont, had the Legislature not banned most third-party charges to landlines in 2010. He said that typically, carrier phone companies keep about 10 cents on the dollar for every fraudulent charge that is paid.
Sorrell said his office is leading a 45-state effort among attorneys general around the country to address cell phone cramming. He said it’s unclear as of yet whether the Legislature will consider a similar limitation of third-party charges to cell phone bills, he said.
Sorrell acknowledged that few people inspect their phone bills carefully. But he said that with charge descriptions and company names such as “AT&T Monthly Subscriptions” and “Basic Data Plan,” it’s easy for even the careful among us to be duped.
He encouraged cell phone subscribers to consider blocking all third party charges to their bills, although the protective strategy would disable legitimate third party transactions. Modern cell phone technology allows for donations to be made to disaster relief funds or political campaigns, for example. Horoscopes and ringtones also can be purchased by phone.
Short of a total block, Sorrell encouraged consumers to be skeptical and vigilant. Phone companies technically are not obligated to refund unauthorized charges that have been paid, but he suggested demanding refunds for unauthorized charges, nonetheless.
To prevent or cut down on false charges in the first place, Sorrell advised against entering cell phone numbers online, or responding to spam text messages.
To file a complaint regarding cramming or other business practices, fill out a complaint online at www.uvm.edu/consumer, or send a letter outlining your complaint to the Consumer Assistance Program, 146 University Place, Burlington, VT 05405, or call 800-649-2424 (in state only); within Chittenden County call (802) 656-3183.
