FCC proposes almost $12 million in penalties for phone bill 'cramming'

The Federal Communications Commission proposed a total of $11.7 million in penalties on Thursday against four phone carriers that allegedly billed thousands of customers for unauthorized charges.

Senate Commerce chairman Jay Rockefeller (D-W.Va.) cheered the announcement but said his Committee will still hold a hearing on the issue and issue a report shortly.

“I’m pleased to hear that the FCC is making progress in the fight against mystery fees on phone bills,” Rockefeller said. “However, I don’t believe it will be enough to stop the problem."

The practice, known as "cramming," takes place when a company charges places an wrongful charge on a customer's phone bill without explanation. These mystery fees typically range between $1.99 and $19.99 per month.

“Cramming attacks consumers in the pocketbook, where it really hurts," said FCC Enforcement Bureau Chief Michele Ellison. "The Enforcement Bureau takes today’s actions to protect thousands of consumers who appear to have been hoodwinked into paying for services they never wanted, ordered, or used.”

The proposed penalties were issued against Main Street Telephone ($4,200,000); VoiceNet Telephone, LLC ($3,000,000); Cheap2Dial Telephone, LLC ($3,000,000); and Norristown Telephone, LLC ($1,500,000).

The FCC issued notices to each of the four for allegedly charging thousands of customers for “dial-around” long distance service they hadn't ordered.

The FCC's investigation found only one-tenth of one percent actually used the services for which they were charged, even though the billing continued for months and sometimes years.