Under congressional pressure, Verizon bans third-party charges on landlines

Verizon told Sen. Jay Rockefeller (D-W.Va.) on Wednesday that it will ban certain third-party charges on its customers' landline phone bills.

Rockefeller, the chairman of the Senate Commerce, Science and Transportation Committee, held a hearing last summer to examine unwanted third-party charges, a practice known as "cramming."

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His committee's investigation found that phone companies placed $10 billion in third-party charges on customers' landline phone bills over the last five years and that a large percentage of those charges were unauthorized.

Some people unwittingly enrolled in services by submitting their phone number to companies online or by agreeing to services over the phone. Others never did anything to participate in the programs but were charged anyway.

At the hearing, Walter McCormick Jr., president and CEO of the U.S. Telecom Association, admitted that the phone companies make about $200 million every year on third-party charges, but he emphasized that some of these charges are legitimate and that the money represents a small portion of overall industry revenue.

Rockefeller praised Verizon's announcement on Wednesday, saying the company had "stepped up for consumers in a big way."

"Verizon is the first in the industry to put a stop to third-party billers for the sake of its customers following the committee’s investigation. I hope they will move as quickly as possible to put this pro-consumer policy in place, and I strongly and urgently call on other companies to follow their lead," Rockefeller said.

But he said he still plans to move forward with legislation to force companies to crack down on cramming.

"I also urge Congress to move forward with legislation to end cramming on all landline telephone bills once and for all, and I will be introducing that bill in the coming days,” he said.