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updated 7/13/2011 8:15:12 AM ET 2011-07-13T12:15:12

Below are statements to NBC News from Verizon, CenturyLink and daData in response to a July 13 report about unauthorized charges appearing on phone customers’ bills, a practice called “cramming”:

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Statement from Verizon spokesperson Bill Kula:

“Verizon does not tolerate cramming. Verizon runs a risk of losing customers when cramming happens, and we take an aggressive stance with third party service providers (often referred to as subCICs) include unauthorized charges on our customers’ bills. Verizon processes over 1 million bills that include third-party charges each month. Cramming complaints represent less than 1% of overall bills Verizon sends to customers.

Legislation banning or substantially restricting this activity, such as a recently passed law in Vermont, would harm the overwhelming number of customers who prefer to review and pay a single bill and who have not experienced any unauthorized charges.  There are more effective, targeted ways to ferret out illegitimate third-parties, while still protecting customers, than a wholesale ban on such billing that indiscriminately penalizes lawful providers of services consumers demand.

While third-party billing provides convenience for consumers, and Verizon receives very few cramming complaints as a percentage of overall bills rendered, we take cramming very seriously.  In addition to other pro consumer precautions, we have revoked the billing privileges of about 20 per year for the past several years for cramming-related reasons.

Verizon’s anti-cramming practices include:

* Our “first call resolution policy”—which has been in place since 1999 --that gives our customers the benefit of the doubt, reversing third-party charges when consumers tell us the charges have not been authorized—no questions asked--and proactively offering our free Bill Block service also introduced in 1999.

* Independent scrutiny of potential third-party billers—including their principals and proposed marketing materials-to prevent those with a history of cramming (or who are otherwise questionable) from accessing our customers’ bills and to prevent the use of deceptive marketing practices.

* Ongoing monitoring of cramming complaints received against third party service providers and, where warranted, termination of billing privileges.

* Verizon reviews potential third party service providers closely to prevent firms with a bad history from using billing aggregators to place their charges on Verizon bills.

* Verizon rejects any firms with affiliations to third parties with which Verizon has experienced or otherwise become aware of cramming-related issues.

* The research involves online searches, legal reviews of their organizational incorporation and structure.

* We review how firms offer services to consumers either in print, electronic or phone marketing approaches and go so far as to review telemarketing scripts to ensure offers to consumers read clear and are not misleading and require sufficient customer approval (more than simply saying “yes” or “no”) of the services being offered.

* Each week, Verizon notifies third party aggregators of third party service providers who are found to be skirting the necessary rules of engagement to earn the right to have their services placed on our bills.

Verizon revokes billing privileges of any third service provider if they exceed our internal low cramming thresholds.

Also, to dispel a common misperception, Verizon does not take a percentage of the third-party charges that appear on our customers’ bills.  Instead, Verizon charges billing aggregators flat fees for processing third-party charges, which are not based on the amount the third party charges their customer

Since 1999, Verizon has offered a cramming block service called Bill Block as noted above to customers at no charge.  We proactively notify new consumers and those with service changes about this free service.

Also introduced in 1999, our pro-consumer, “first call resolution policy” mentioned above enables customers to get a refund of the charge with no questions asked if a customer contacts us and says that a third-party provider charge appearing on his/her bill is unauthorized.

Because it is impractical for Verizon to know what third party services our customers ordered, we take our customers’ word when they tell us they did not order a particular service that appeared on their bill. As a result:

* If a customer contacts us to say he/she didn’t authorize a charge, we immediately revoke the fee per our policy and proactively offer our Bill Block service.

* If a customer calls to ask about certain third party charges not related to Verizon on his/her bill because they are not sure what the service is, they will be referred to the third party service provider.

On our www.verizon.comwebsite, we proactively help educate consumers about ways to avoid being crammed.  These links provided the language communicated to consumers:

http://www22.verizon.com/pages/securityalerts/

http://www22.verizon.com/residentialhelp/phone/my+verizon/customer+rights+and+safety/customer/95449.htm?

http://www22.verizon.com/residentialhelp/phone/billing/privacy+and+security/unauthorized+charges+on+your+telephone+bill+cramming/95446.htm?”


Statement from CenturyLink spokesperson Mark Molzen:

“CenturyLink does not tolerate unauthorized charges on our customer’s bills.  Before any third party charge is included on our bill, that third-party company must pass a rigorous process, which includes independent verification of end user authorization. In the event that a charge is deemed inappropriate by a customer, our policy is to resolve the issue on the initial call by issuing a credit and by offering third party bill block, which prevents future third-party charges from appearing.   In addition, we routinely monitor the number of complaints received from customers and take swift action to suspend billing privileges for any company with excessive complaints.  If a customer believes their bill contains unauthorized charges, they should contact us so we may resolve the matter on their behalf.”

Statement from daData spokesperson Andy Lustigman:

“daData and its clients are a diverse group of businesses that offer technically-driven products and services that provide value directly to consumers. daData has a long-standing history of employing best practices with its clients when it comes to both to marketing practices, obtaining new customers and maintaining its customer relationships. Indeed, prior to online enrollment, daData and its clients require consumers to affirmatively agree on three separate occasions to the clearly and prominently displayed terms and conditions of the products and services offered. Moreover, its customer service policies are fair and seek to resolve any issues to the customer’s reasonable satisfaction. Over the last several months, daData has cooperated fully with the Senate Commerce Committee in its inquiry. daData remains committed to working with the Committee consistent with its overall commitment to industry best practices. In addition, daData and its clients continue to review and enhance their products and services to ensure that they remain industry leaders in both standards and quality.”

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