Memorandum

City of Lawrence

TO:	David L. Corliss, City Manager
FROM:	James Wisdom, Information Systems Director
Date:	February 15, 2011
RE:	Follow-up Response to Telephone Cramming Charges

Definition  “Cramming” is the name given to the unauthorized, misleading, or deceptive charges placed on the City’s telephone bill.  As a byproduct of deregulation and to open the system to increased competition, local phone companies must lease their phone lines to outside firms who want to sell competitive services.  In the City’s case these cramming charges have the potential of appearing on bills for traditional telephone line service, long distance, wireless telephone service, and paging services.

Bill Review  A review of the monthly AT&T bills for the previous six months showed the appearance of seven charges that were deemed to be unauthorized charges by third party providers.   These third party charges appearing on the AT&T bill were for services including web hosting service, email service, PC tech support, and voice messaging.  The monthly charges for these services ranged from a low of $8.00 for voice messaging to $49.95 for EFAX service fees.

Staff Response

1. Cancel charges:  Information Systems staff contacted the third party billing service for each unauthorized charge.   In all cases the unauthorized charges were cancelled, and a refund in the form of a billing credit was obtained.  The billing customer representatives usually indicated that it would take from one to three billing cycles before the charges would be stopped and credits issued.  However, cancellations and credits were observed to be effective in the subsequent billing cycle.  Staff continues to review monthly bills for any evidence of third party miscellaneous charges.

2. Maintain log:  A spreadsheet record has been kept of each incidence of cramming found.  The log indicates the billing agent, the third party service provider, the city telephone number allegedly authorizing the charge, the type of service provided, the amount charged, and the resolution and confirmation number for stopping and refunding the charges.

3. Contact department:  Each department allegedly authorizing the charges for third party services was contacted regarding the charge.   The deceptive practice of cramming was explained to the department representative and why it was important to be wary of such practices when dealing with seemingly “free” offers of service.

4. Block future cramming:  An AT&T representative was contacted regarding the third party cramming charges and what could be done to prevent future unauthorized charges.  In response, AT&T has added a “third party block” against future third party miscellaneous charges for all City of Lawrence telephone lines.

5. Federal Trade Commission complaint:  The Federal Trade Commission maintains a web site for filing complaints of this nature at www.ftc.gov/complaint.  Although the Federal Trade Commission does not investigate each individual complaint, the incidents are logged in a database that can be accessed by numerous law enforcement agencies.

6. Report to City Manager.