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A.G. Settles Case for $1.6 Million in Ongoing Effort to Combat "Cramming"

CONTACT: William H. Sorrell, Attorney General, (802) 828-3173

November 12, 2013

The Office of Vermont Attorney General William H. Sorrell recently settled two lawsuits that will net 12,500 Vermonters and Vermont businesses in excess of $900,000 for payments made on their landline phone bills for third-party services that were not authorized (a practice known as “cramming”). The cases were against 25 sellers of voicemail, email and other services, 11 principals of the sellers, and 2 companies alleged to have facilitated the marketing or placement of the charges. The settlement terms require the defendants to refund all amounts paid by the affected Vermonters, and to pay an additional $725,000 to the State. Checks will go out to consumers in early December, in an envelope from the Attorney General.

“As a result of our investigations, we were able to convince the legislature to ban nearly all third-party charges on landline phone bills. We have been trying to recoup crammed payments made by Vermonters. With this settlement, we will have returned nearly $2.3 million to over 25,000 Vermonters. We now turn our attention to cramming on cell phone bills," said Attorney General Sorrell.

Since more and more people are using cell phones, the Attorney General advises Vermonters to be vigilant in examining their cell phone bills: don’t pay for services that were not requested and ask for a refund for all past unauthorized charges.

Consumers can minimize cramming by asking their mobile carriers to block all third-party charges and by never putting their mobile phone numbers on the internet or responding to spam texts. Even with these precautions, consumers should monitor their phone bills.

According to a survey commissioned by the Attorney General’s Office and conducted by UVM in early 2013, 60% of the third-party charges on Vermont mobile phone bills were unauthorized and nearly 80% of the people surveyed didn’t know third-party charges could be placed on their cell phone bills. The charges come in a variety of names such as “Usage Charges,” “Monthly Subscriptions,” “Premium Messaging,” or simply “Charges.” Charges range from one-time-only charges to $24.99-per-month “subscriptions.” Many are for monthly amounts such as $9.99. [See: Sample phone bills.] The crammed amounts add up: Consumer Reports has estimated that landline and mobile cramming cost American consumers $2 billion per year. If Vermont had not banned landline cramming in 2010, that would be equivalent to $4 million per year out of the pockets of Vermonters and Vermont businesses.

Attorney General Sorrell’s Office is leading a 45-state effort of state attorneys general to address cramming on mobile phones. In May and June 2013, he encouraged the Federal Trade Commission, through testimony and in formal comments, to take action on mobile cramming.

For more information on the cases, to answer cramming-related questions, or to file a complaint regarding cramming or other business practices, fill out a complaint on-line at www.uvm.edu/consumer, or send a letter outlining your complaint to the Consumer Assistance Program, 146 University Place, Burlington, VT 05405, or call 800-649-2424 (in state only); within Chittenden County call (802) 656-3183.

  Website consulting provided by The National Association of Attorneys General.