Madigan
CHICAGO (Legal Newsline) - Illinois Attorney General Lisa Madigan announced on Wednesday that house lawmakers unanimously passed legislation to ban phone bill cramming, a scam that has impacted Illinois consumers and business with bogus phone bill charges.
House members voted 105-0 to send House Bill 5211 to the Senate for approval.
Cramming is a scheme in which third-party vendors use consumers' phone numbers like a credit card. The scammers add charges to phone bills for phony services or products like e-mail service, website design or identity theft protection, which businesses and consumers never wanted, asked for or used.
"Phone cramming is a multibillion-dollar business for con artists who sneak unauthorized charges onto unsuspecting customers' bills, affecting everyone from residential users to small business owners, even nonprofit organizations and government agencies," Madigan said. "The only way to put an end to this scam is by instituting a ban on third-party charges on our phone bills."
The legislation would ban all third-party billing except for limited, common sense exemptions for services that are legitimate. The legislation was sponsored in the house by Rep. Kelly Burke and will be sponsored in the senate by Sen. David Koehler.
It is estimated that telephone companies place at least 300 million charges by third-parties on the bills of customers each year. According to a report by a U.S. Senate Commerce Committee, third-party billing generates at least $2 billion each year.
Before the Do Not Call registry was established, phone cramming scams were originally perpetrated primarily through telemarketers. More recently, the scam has grown online. Internet users report submitting their phone number with personal information for online surveys, free recipes or online prize drawings. Weeks or months later, the consumers see charges on their phone bills for services that were unauthorized.
Madigan's office has filed 30 lawsuits to date against crammers, representing more than 200,000 Illinois residences and businesses that have been victims to the schemes. One of the most glaring targets was cited in a 2009 lawsuit by Madigan against US Credit Find Inc., a Venice, Calif.-based operation that allegedly crammed the dial-a-story telephone line of a Springfield public library.
Madigan previously advocated for a nationwide ban on phone bill cramming, testifying before a U.S. Senate Commerce Committee in July and filing comments with the Federal Communications Commission.