Telecommunications:

Update on State-Level Cramming Complaints and Enforcement Actions

RCED-00-68: Published: Jan 31, 2000. Publicly Released: Jan 31, 2000.

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Pursuant to a congressional request, GAO provided information from state and federal agencies on the number of cramming complaints nationwide, focusing on: (1) determining whether they were seeing an increase or decrease in cramming complaints during 1999; (2) learning whether they were taking additional actions to protect consumers from cramming; and (3) obtaining updated information about their enforcement actions against crammers during 1999.

GAO noted that: (1) the Federal Communications Commission and the Federal Trade Commission reported declines in cramming complaints for the first 9 months of 1999 compared with the same period in 1998; (2) however, the situation at the state level was mixed; (3) 22 states and the District of Columbia reported declines in cramming complaints, 15 states reported increases and 11 reported no change; (4) 30 state public utilities commissions and 27 state attorneys general told GAO that among the cramming complaints they received for 1999, some were from small businesses alleging unauthorized charges for services such as Web page design and other Internet services; (5) the states are continuing their efforts to combat this abuse; (6) by the end of 1998, most states had made information available to consumers on ways to prevent cramming and had established administrative procedures for resolving complaints about telephone billing; (7) also, a few state commissions had obtained additional statutory and regulatory authority to levy monetary penalties against offending companies; (8) between January and November 1999, 26 states either adopted or proposed additional statutes and regulations on cramming requiring that consumers' telephone bills clearly identify charges by third-party vendors; (9) the states are also taking additional enforcement actions against crammers; (10) between 1996 and 1998, 16 states completed 25 enforcement actions against companies and individuals engaged in cramming, resulting in over $3.5 million in restitution and fines; (11) another 22 state enforcement actions were still pending at the end of 1998; (12) from January through November 1999, 15 states completed 30 additional enforcement actions against crammers, resulting in at least $569,500 in fines and other penalties; and (13) another 37 state enforcement actions initiated during 1999 were still pending as of November 1999.

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