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updated 6/21/2011 3:19:49 PM ET 2011-06-21T19:19:49

 

The Federal Communications Commission has announced it will impose new rules to make it tougher for mobile carriers to add "mystery fees" to consumers' phone bills, a practice known as cramming.

"We've seen people getting charges for yoga classes, cosmetics, diet products, and, yes, psychic hotline memberships," FCC Chairman Julius Genachowski  told an audience at the Center for American Progress in Washington, D.C., earlier this week.

Mystery fees are often labeled with hard-to-decipher descriptions like U-S-B-I and typically range from $1.99 to $19.99 per month.

"Only 1 in 20 cramming victims ever notice the charges," Genachowski said. "As a result, consumers too often get bilked out of hundreds of dollars."

Companies that persist in the practice will pay. Verizon Wireless agreed to repay 15 million consumers a total of $50 million in overcharges and pay the U.S. Treasury $25 million as a penalty for cramming at the conclusion of an FCC investigation last October.

A new round of FCC penalties against four carriers totaling $11.7 million was announced by the commission's enforcement bureau. The FCC estimated the improper charges at $8 million.

"If you charge consumers unauthorized fees, you will be discovered and you will be punished," he said.

On deck at the FCC

In the coming weeks, the FCC will consider new rules to empower consumers against cramming through increased transparency and disclosure.

In addition to stamping out mystery fees, the commission will help consumers prevent bill shock on their wireless bills.

"Bill shock is when mobile subscribers see their bills jump unexpectedly by tens, hundreds or even thousands of dollars from one month to the next," he said.

The commission is currently working on an automatic alert system that would help eliminate surprise overage charges. Other initiatives will increase transparency and require providers to take "smart disclosure steps" that are part of the commission's Truth-in-Bill Paying agenda established last fall.

How to identify cramming charges

Ask yourself: Are the rates I am being charged consistent with the rates I signed up for? While an advertised monthly service fee never equals the monthly bill total because of legitimate taxes and fees, those line items should be clearly labeled. Cross them off.

Check for overages such as number of minutes or data and cross those off, too. You'll be left with items that bear further investigation.

Looks for company names you do not recognize and unfamiliar labels such as U-S-B-I mentioned by Genachowski.

The FCC advises consumers to check with their carrier first to request an adjustment. If you need help resolving your dispute, you can contact the FCC at fcc.gov/complaints, or call 1-888-CALL-FCC (1-888-225-5322).

 

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