Cramming is a form of fraud in which small charges are added to a bill by a third party without the subscriber's consent or disclosure. These may be disguised as a tax or some other common fee, and may be several dollars or even just a few cents. The crammer's intent is that the subscriber will overlook and ultimately pay these small charges[1].
According to the U.S. National Association of Attorneys General, cramming was the 4th most common consumer complaint of 2007 in the United States[2].
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There are various forms of cramming.
Phone cramming is the practice of placing unauthorized charges on your home telephone bill.[3]
In order to prevent instances of cramming, certain members of the third party billing industry have implemented measures such as comprehensive due diligence screening and performance monitoring programs to identify and eliminate crammers. They have also launched a website to educate and protect consumers.[4] These measures are intended to protect consumers from unauthorized charges on their phone bill. Some companies offer consumer protection websites to help consumers better understand their phone bill and detect cramming as soon as it occurs.[5]
Web-cramming involves billing consumers for a web page they didn't even know they had[6]. "This is most often accomplished when criminals develop new web pages for small businesses and non-profit groups for little or no expense. While advertising their service as free, these criminals actually engage in unauthorized phone charges on their victim's accounts. The most common scam involves "rebate checks." These checks, when cashed, transfer the customer's Internet service provider, placing monthly service charges on their telephone bill. This is made possible because telecommunications companies provide the service of being able to collect bills for companies that perform a service over the telephone." (Britz, 2009)
Another is "preacquired account telemarketing fraud", cramming of unauthorized charges by telemarketers who have bought or obtained consumer account information prior to the telemarketing call, sometimes from the consumer's own bank[7].
Phone companies like Verizon respond by removing cramming charges from a consumer's bill upon request, and will cease business with the company that crams[8]. Verizon, at the customer's request, will put a Cramming Block on the customer's account, that prevents third parties from adding charges. However, phone companies (taking Verizon as an example) sometimes get caught in cramming themselves. Verizon had been under the U.S. Federal Communications Commission (FCC) investigation after many customers had complained about mysterious charges on their phone bill. In October 2010, Verizon announced that it would refund up to $50 million to its customers to offset these charges.[9]
In 2005, the Gambino Family admitted to running a cramming operation[10].
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