FTC Settles with Texas Payment Solutions Company to Resolve "Phone Bill Cramming" Allegations

FTC

On May 4, the FTC announced a $5.2 million proposed settlement with a Texas-based payment solutions company to resolve allegations that the company, in violation of a 1999 settlement order with the FTC, permitted third parties to place unauthorized charges on consumers’ telephone bills in the course of providing its phone billing services. According to the proposed settlement order, the company failed to (i) vet third party charges before processing them; and (ii) investigate consumer complaints regarding unauthorized charges. In addition to the $5.2 million judgment, the proposed settlement prohibits the company from (i) placing charges on consumers’ phone bills for services “unrelated to the completion of a call,” including voicemail, web hosting directory listing, and email services; and (ii) placing charges for any products or services on any consumer bill unless expressly authorized by the consumer.