Is your phone bill ripping you off?

How to spot and avoid 'cramming' charges on your phone bill.

By MSN Money Partner Jul 15, 2011 11:29AM

This post comes from Kelli B. Grant at partner site SmartMoney.


Spotting unauthorized charges on your landline and cellphone bills isn't always easy, but the penalty for missing them can be substantial.


Americans are paying more than $2 billion a year in unauthorized charges on their phone bills, an illegal practice called cramming, estimates a recent Senate Commerce Committee study. Post continues after video.

Charges can show up in the form of services you might legitimately use -- long-distance fees, for example, or a downloaded ringtone -- but what makes them cramming is that you haven't actually used the service or otherwise authorized the charge.


In fact, the Federal Communications Commission reports just 0.1% of consumers actually use the third-party services they're being billed for.


So what's making consumers pay up? Cramming isn't easy to spot. Charges are often small, and listed simply as a "service charge" or the even more vague "other fees."


"We're glad that the regulatory bodies are looking at this," says Linda Sherry, a spokeswoman for Consumer-Action, a consumer advocacy group. "It's completely bogus to bill people for things they didn't ask for." Phone bills are such a popular target because it's relatively easy for an unscrupulous company to bill something to your phone, versus obtaining your credit card number, she says.


Earlier this week, the FCC released new proposed rules that would require phone companies to clearly identify and list separately any third-party charges, in a bid to reduce cramming. Even so, it's up to consumers to avoid paying.


"The onus is on the consumer to look at the bill and make sure it's correct," Sherry says. "It's a huge drag."


Review your bill each month and call your carrier to question any charges you don't understand. Carriers will typically remove and reverse charges for you, she says, although in rare cases you may need to reach out to that third party.


The FCC says 82% of cramming charges still occur on landlines, so keep track of any long-distance or other expensive calls you make. On cellphone lines, carefully read the terms and conditions for any phone-related services you or a family member use. Sending one text message for, say, a special offer from a company may sign you up for a monthly subscription. Carriers may also allow you to block purchases on your phone entirely.


More on SmartMoney and MSN Money:


Jul 30, 2011 4:57AM


I recently spotted a $9.99 charge on my Verizon bill for 'data usage'. I never use the data feature & very rarely even text, so the charge really stuck out. When I looked to see the details of the 'data', there was no data usage shown !!


When I called Verizon, they stated a '3rd party' was sending people text msgs with some sort of offer, & if people didn't respond saying they weren't interested in the offer, their account would henceforth be charged $9.99/month !! This is outrageous !!

It used to be that if you wanted a service, you had to agree to it first before they could start charging you. Now, all too often, companies are allowed to give you something you did not

ask for and then charge you if you don't (after the fact) tell them you don't want it !! Why should a person have to opt out of something if they never opted in????!!


So a word to the wise—check your phone bills carefully—home and cell. Verizon put a block on my phone so this particular scam won't work, but I'm sure many others are unwittingly paying the fee.

Jul 30, 2011 4:03AM
SPRINT tried to bill $18.00 for "upgrade device"after I signed another 2 year agreement.and got a new phone.  WTF!  This is the thx I get for being a loyal customer for 6 year's.These company's STINK. Douche bag's!
Jul 30, 2011 6:58AM

These big phone companies are allowing this, which is criminal.  If you or I decided to do something like that with our company invoices, they would send us to jail.  But, not them, because they are political contributor's, and the rest is not rocket science.  ATT was doing that on my cell bill, and I called them, getting a refund for over $200.00 but it was not easy.  I had to threaten to send them to the FCC and FTC before it was finally resolved.


Now for the gig, and I know that I will get some ugly comments, but I think that all cell phone should be destroyed.  I hate them; always have and always will.  The cell companies pay anywhere from $10 to $30 for the phones and sell them to us for hundreds of dollars, and then fleece us on the phone bill.  What's wrong with this scenario!!

Jul 30, 2011 11:22AM
Be careful when completing on line surveys for restaurants and major products with the promise of receiving coupons or gift cards for free products. Never give them your phone number and if your number is required, discontinue the survey.  These companies will send test messages to your phone and charge you between five and eight dollars per message through your phone company billing.  One such company offers surveys for Olive Garden restaurant and lures you in with trivia games.  When I tried to discontinue this madness with this survey company, they charged me six dollars for the text message I sent them requesting they stop sending test messages to me!
What is with all these taxes and regulatory fees which are added to our phone bills?  My phone plan costs $69.99, per month and every month after all the regulatory fees, the local, state, and federal taxes are added, my bill totals between $85.00 and $90.00.  That is a ridiculous 22% to 24%, increase.  And, our government states they don't have enough money?
One more thing and I know this is a little bit out there on the edge.  Almost every day, in one way or another, I feel like I am being extorted from, rather it be big business or our government.  Most people in this country are under the impression the mafia is almost non existent...Big Business along with our Government is the new Mafia!  Oh, and don't even get me started about how our banks operate in this country.  What happened to this country?
Jul 30, 2011 10:50AM
Also worked at an ATT call centre dealing with cells, you are being scammed left, right and centre!
Jul 30, 2011 9:07AM

T- mobile defrauded my account for services and equipment I did NOT order.  Cust.serv. was horrible and asked the same questions over and over.  After being credited one month the same charges were on the bill the next month.  I switched Service provider.

At&t .   Not any better.  One day I end a call and the phone beeps and is dead.  Took it to a service store and the guy says the SIM card went bad.  Replaced it for free but then connections were not happening.  3,4,7 tries to make a call connect.  They were charging my account for these minutes as used when there was no connect.  Paid to have early termination to avoid inevitable overcharges.  Went with Consumer Cellular.  New co. new account, new phone right?  WRONG.  ATT owns Con. Cell. and the problem with no connect and charges for unused minutes I had with ATT followed me to Con. CEll.  Used 250 mins to make 10 one minute calls.

These co. are criminal and should be tried and jailed to the full extent of the law.  But is seems white collar crime goes without penalties...Banking, Insurance, Mortgage, etc. frauds are never punished...

Makes me sick.

Jul 30, 2011 8:34AM
The Senate Commmerce Committe is involved.   CALL FOR ACTION !! 
Jul 30, 2011 7:26AM
I had a $24.99 charge on my T-mobile bill and I called T-Mobile and asked about it.  They were very helpful in getting it off of my bill.  I had been paying it for 3 months because I thought I had gone over my minutes or something.  The T-mobile rep told me to NEVER think it's something I've done.  He said to ALWAYS call if there are questions.  Now that I've read and seen this video, I feel I am very lucky to have dealt with T-Mobile because he credited my account  immediately...unfortunately, now they are with AT&T.  Interesting enough...this didn't start happening until the two merged.  Hmmmmm......
Jul 30, 2011 8:28AM
thieves as long as as they make money they dont care i had the same problem took month to get taken care of if the public do something like when a storm hits and raises prices the government gets involved you get arrested charged with a crime BUT big biz does it these same government people told me there was nothing that can be done BULL arrest and charge the ceos with a crime but we all know this will never happen lie cheat steal this is the american way lie to you about it if that dont work cheat them out of it and if all else failes steal it americans have NO rights only illegals and big biz and government officials have rights
Jul 30, 2011 1:57PM

Here's a better idea never give out ANY personal info to ANYONE and if these cramming fees are illegal why aren't there any criminal charges being brought against these companies. Seems like a cover-up from those that are supposed to stop this kind of crap, oh excuse me this kind of cramming. Washington sits back and lets this continue and does nothing.


Here's and idea...........................................................


In every election WE THE PEOPLE should vote OUT of office every incumbent until those the WE elect to office start doing what they are elected to do. If we take control of who is in office we can change how Washington does business. This is something that should be shared with everyone that we know and someday it will be a government FOR THE PEOPLE BY THE PEOPLE OF THE PEOPLE once again.


Pass it along

Jul 30, 2011 10:08AM
@Beach_Head you must work for the telephone company.  I don't even use a landline phone service anymore.  Got too tired of the cramming and excessive taxes/fees.  Thumbs up
Jul 30, 2011 8:16AM
i used to have a sprint cell phone and after a yr with them, my bill suddenly went up. it was enough for me to notice it had gone up but not enough for me to think it was anything unusual going on. i had assumed that maybe there was some late charges from me paying my bill late or some new taxes.

than one day when i was talking to them about other charges (i was suddenly being charged for night time minutes even though my contract included unlimited free night time minutes), the guy i was talking to started listing all the services i had on my phone. two of them, i had never agreed to and had never used either. when i pointed that out and said i wanted my money back for all the months i had been paying for them, the guy's response was "why were you paying it than?". when i told him that i just paid my bill every month without thoroughly checking it because i had assumed that i could trust them to not bill me for things i hadn't asked for, he suddenly got very quiet, than very quickly told me they would be crediting my account as of right than and for how much.
Jul 30, 2011 3:30PM
What telephone companies are doing may be not 'illegal' however, they are definitely trying to hide the details and slip in the extra charges.  Why else would they bury their charges in the last couple pages of the their bill?  Why wouldn't they place these charges prominently on the first page?  

It's fine and well to say 'read your bill!' or it's the customer's responsibility... but at the end of the day, these companies are trying to be sneaky and slick in their practices.  That's not good.  
Jul 30, 2011 1:33PM
Jul 30, 2011 2:16PM

....thank you. i thought it was just something i had done and now i know i should call and have it removed! very sneaky these companies are...bring back Ma Bell!!!!!


Jul 31, 2011 2:34AM
Qwest and Verison do not have to use a 3rd party. They have a unique business relationship that allows Qwest to pay Verison so that charges from Verison (even if disputed ) become legal charges. I know this because I fought them for my $4,000 that I was overcgharged over a peroid of a few yrs with no staisfaction at all. These companies at one time even took my last $750(correct figure)  for 1 phone bill that Qwest paid Verison . Talking to both companies was a total waste of my time. In reality the FCC was of no help either.
Jul 30, 2011 2:17PM

I wish I could post this without my name on here but this isn't a one-sided issue.


Most people don't fully read their statements whether it's for their telecommunications services or not. They only read the first page with the dollar amount on it. Most bills are in 3 parts and the most detailed is the lower third of the bill. Nearly all invoices/bills are written this way. It is the customer's responsibility to read the whole bill, especially the detailed part.


When it comes to downloads on cell phones that have charges connected with them, you are asked twice if you ok the download. I would get tons of calls from customers saying that they didn't download something when in fact they did, or the kids did, or someone else with their phone did. Depending on the amount of the downloads, some of them could have been waived. Sometimes these charges were in the hundreds of dollars.


There are third party companies out there that once you download one of their downloads, they sign you up for a monthly subscription. By law now, they have to tell you that if you agree to this, you are signing up for a subscription service...but they practically mumble this on their tv commercials and the print is extremely small so that you can't really see it. Jamster is notorious for doing this. I still shudder when I hear their company name.


Every company up sells products. It's not limited to telecommunications companies. Ever notice when you're in the drive-thru window of a fast food place, the person on the other end says, "would you be interested in our special of the day?" or "do you want fries with that?" Do you know that there's some manager or supervisor breathing down that person's neck telling them that they have to sell so many numbers of that product  or they may lose their job?


As a consumer, I hate up selling. As an employee, I hate up selling but it's a part of my job and it's the part of my job that I don't care for much. When I'm a consumer and the product isn't working, fix what isn't working instead of selling me additional things to pad my bill even higher.

Jul 31, 2011 12:28AM
I gota an answering machine and discontinued voice mail (over the internet), saving $8.50 /mo, Got a snail-mail notice a week later, covered with text on both sides of the page, with a rather confusing "service connection charge" of $17 on page 2. I called, and was told it was a "system glitch. As if. Tricks and traps.
Jul 30, 2011 7:59AM
what i would be interested in is what type of service these companies actually provide; ie, what type of hardware do they have to provide any services, what equiptment do they have in their offices to give service, etc.  or is it just an "dummy" office for collecting money?
Jul 30, 2011 9:55AM
This "REPORT" is bs. They dont even have their facts straight. The phone companies are required by law to allow Third Party Charges on the customers phone bill. It is NOT illegal. It's 100% legal. The FCC past that law years ago. It is up to the customer to look over their bill and call their phone company to ask for a Third Party Block. That is a free service. It's the customer that cant be bothered to look at their bill to even notice they have extra charges on the account. 
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