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Editorial - Don't be a victim of 'cramming' scam

Better start looking over your phone bills more carefully; you could be a victim of "cramming."

This fairly new type of scam happens when a third party vendor puts unauthorized charges onto a customer's long-distance phone bills.

It's been happening in Minnesota for some time and last week prompted action from Minnesota Attorney General Lori Swanson. She filed a lawsuit against a Pennsylvania-based company - Cheap2Dial - that placed charges of more than $15 per month for long distance calling minutes on the phone bills of unsuspecting Minnesota residents without their authorization.

"Cramming works because most people don't realize that their phone bill can be used like a credit card," said Swanson in a news release announcing the lawsuit. "Because phone bills are long and hard to read, people don't always catch unauthorized charges."

Minnesota isn't alone. Swanson noted that cramming complaints are on the rise nationwide. The Federal Trade Commission recently called cramming "a significant area of recent consumer complaint," and the Federal Communication Commission (FCC) recently said, "It's a problem that's on the increase right now."

The FCC received 6,714 cramming complaints in 2009, up from 1,761 in 2005. Cramming scams were common in the 1990s but eventually receded following a wave of federal and state crackdowns.

Consumer watchdog groups say cramming is on the uptick again because of several factors - the hard-to-read nature of consumer phone bills; the rise of so-called "billing aggregators" that facilitate the posting of charges; and phone companies themselves, which make money by allowing third parties to put charges on customers' phone bills.

The lawsuit against Cheap2Dial alleges that the company placed charges of more than $15 for "dial around" long distance calling minutes on the phone bills of Minnesota residents without their authorization. "Dial around" long distance calling minutes are similar to using a calling card to make long distance calls, minus the actual calling card.

Of the 2,567 Minnesota customers who Cheap2Dial billed since 2008, only nine people (0.35 percent) actually used the company's services to make a long distance call, according to Swanson.

To help consumers avoid becoming the victims of cramming, Swanson offered this advice:

• Scrutinize your phone bill. Review your phone bill each month for unauthorized charges as carefully as you would look over your bank or credit card statement. "Crammed" charges are often buried many pages into the bill. Charges may appear under innocent-looking headings like "member fee," "voicemail," "service charge," "other fees," "calling plan," or "web hosting."

• Say "no" to seemingly free giveaways. Some crammers use prize drawings, contests, or free giveaways to dupe people into unknowingly signing up for their services. So-called "free offers" almost always have strings attached. Read the fine print before signing up for anything - even if it is touted as "free."

• Ask your phone company to block third party charges. Some phone companies allow you to block all charges from third parties. Ask your phone company if it honors such requests. If so, third party charge blocking may help you avoid getting "crammed."

• If you find unauthorized charges on your phone bill, promptly contact both your phone company and the third party vendor to dispute the charges, ask that all future charges stop, and ask for a refund of past charges. Under Minnesota law, your local "landline" phone company is not supposed to put third party charges on your phone bill unless the third party vendor has obtained your express authorization to allow the charges. If you notify your phone company that an unauthorized charge from a third party was included on your bill, the phone company must remove the charge and credit your account for any amounts you paid for the unauthorized charges in the last six months, unless the third party that put the charges on your phone bill can produce within 14 days evidence that you authorized the charges.

Don't let cramming companies line their pockets at your expense. Be vigilant, tell others about the scam, especially the more vulnerable victims, and check your phone bill for any wrong numbers.

Echo Press editorials are the position of the newspaper's editorial board, which includes Jody Hanson, publisher; Al Edenloff, editor; and news reporter, Celeste Beam.