[Congressional Record Volume 144, Number 71 (Thursday, June 4, 1998)]
[Extensions of Remarks]
[Page E1027]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        H.R. 3990, THE ``ANTI-CRAMMING PROTECTION ACT OF 1998''

                                 ______
                                 

                          HON. JOHN D. DINGELL

                              of michigan

                    in the house of representatives

                         Thursday, June 4, 1998

  Mr. DINGELL. Mr. Speaker, I rise today to introduce H.R. 3990, the 
``Anti-Cramming Protection Act of 1998'' to protect the American public 
from those that perpetrate the unfair and anti-competitive outrage 
known as ``cramming.'' Crammers are companies that impose phantom 
charges on customers' telephone bills without their knowledge or 
consent.
  In this information age, consumers are increasingly turning to their 
telephones not only to communicate with their friends, family, and 
business associates, but as a device for engaging in electronic 
commerce. With this legislation, we can ensure that consumers have 
protections from those who would swindle them simply because they use 
their telephone.
  This legislation entitles consumers to have crammed charges dropped 
from their telephone bills if they dispute the charges within 90 days 
of receiving their telephone bill. The bill authorizes State Attorneys 
General to sue crammers under Section 5 of the Federal Trade Commission 
(FTC) Act to protect consumers in their States from crammers. The bill 
requires the FTC to write rules to outlaw unfair and deceptive acts and 
practices in connection with billing for products or services on 
telephone bills. These rules would ensure that such charges are 
authorized by the consumer and are easily identifiable on the 
consumer's telephone bill. Also, subscribers would be permitted to 
block telephone billing of miscellaneous products and services at their 
own election. Finally, telephone companies would be authorized to 
discontinue billing on behalf of known crammers.
  Cramming is a spreading problem. Cramming is one of the most frequent 
sources of consumer complaints at the Federal Communications Commission 
(FCC). Moreover, since cramming is a relatively new breed of consumer 
fraud, existing law is inadequate to provide consumers needed 
protection. Since the FCC began recording cramming complaints in 
December, it has processed nearly two thousand complaints. Local 
telephone companies also have received thousands of complaints, and 
that number is rising rapidly. Worse, since crammed charges are usually 
undetected by the consumers who are victimized, many cases go 
unreported. Without tough legislation, the number of victims is certain 
to rise, and legitimate competition will be stifled.
  How do crammers get away with this trickery? Their creativity is 
boundless. For example, when a consumer dials a number to learn about a 
product, get sports scores, or hear their horoscope, their home 
telephone number is often captured through a number identification 
system. Crammers then use the telephone number to submit bogus charges 
to the consumer's local telephone company. Worse, crammers are not 
limited to finding victims through incoming calls. The white pages 
directory lists their potential prey in alphabetical order. Again, the 
crammer simply selects telephone numbers at random and submits bogus 
charges for billing.
  Some crammers use names on telephone bills that intend to mislead or 
confuse the consumer. They will call themselves ``F.C.C.'', for 
example, in an attempt to be mistaken for a government agency. Or they 
will use a name like ``Enhanced Services'' that may be mistaken for 
other legitimate charges the consumer has ordered. In addition, there 
is often a middleman involved that submits billing to the local 
telephone service provider on behalf of multiple vendors, further 
complicating matters for consumers who want to dispute a charge. These 
charges are typically in the $3 to $5 range in an attempt to fall below 
the consumer's radar screen. Of course, these charges add up.
  Many more choices are available to consumers today to make purchases 
of goods and services they want and need. Unfortunately these benefits 
also create many more opportunities for consumer confusion and fraud. 
Mr. Speaker, we need tough legislation to stop bad actors who are 
cramming bogus charges onto our constituents' phone bills. The ``Anti-
Cramming Protection Act of 1998'' provides the tools needed to solve 
this problem.

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