Legislation banning a telephone bill scam known as "cramming" was signed into law Wednesday, making Illinois among the few states to ban third-party companies from adding fees to bills.
The new law prohibits such companies from adding unwanted, unneeded or bogus charges on a landline telephone bill that may show up each month for things such as extended warrantees or vague service fees. The scam – with charges ranging from $10 to $45 per bill – has been around for years on landline phone bills and is creeping into the cell phone industry.
Democratic Gov. Pat Quinn signed four bills into law Wednesday, all relating to consumer protections and utilities.
"It's time to end the scamming and the cramming," said Quinn, who helped found the advocacy group, Citizens Utility Board, several years ago.
Vermont enacted an anti-cramming law last year.
Illinois' anti-cramming law goes into effect Jan. 1. It was pushed by Illinois Attorney General Lisa Madigan, who said her office has filed 30 lawsuits over the years against third-party companies accused of cramming. She said the lawsuits were effective on a case-by-case basis, but new companies would always pop up.
"Phone bills should not be used as a credit card; customers don't expect that," Madigan told reporters after the bill signing in Chicago.
Cramming can happen in a number of ways, according to the U.S. Federal Communications Commission. Telephone companies are allowed to bill for third-party services, which may be unwanted or not fully explained to the customer.
Consumer advocates said people can unknowingly give their phone numbers to such companies, such as by signing up for a drawing online for something unrelated. Third-party companies can charge for services that show up on a telephone bill.
A U.S. Senate committee has estimated that customers across the country pay up to $2 billion a year in third-party charges – with a large percentage of those unauthorized.
Telephone companies have taken heat for the problem and have recently begun to act.
AT&T agreed earlier this year to limit third-party charges on landline bills. Verizon, also in a class-action lawsuit settlement this year, said it would refund landline customers for third-party charges.
The other Illinois bills signed into law Wednesday include one that requires utilities to notify credit reporting bureaus when utility bills are paid off. The idea is to help customers improve credit scores. The law goes into effect Jan 1.
The two other laws go into effect immediately. One allows townships to purchase energy in groups, just like municipalities and counties in Illinois already can. Another protects "net metering," where customers who produce their own renewable energy can sell excess power back to a provider.
The scam – with charges ranging from $10 to $45 per bill – has been around for years on landline phone bills and is creeping into the cell phone industry.