New law bans 'cramming' in Illinois
The state of Illinois has officially banned a telephone scam known as "cramming."
Cramming is when third party companies add bogus charges to a landline telephone bill for unwanted services.
Illinois Governor Pat Quinn signed a bill on Wednesday outlawing the scam.
At the signing, Illinois Attorney General Lisa Madigan said customers usually don't know they're being charged for the bogus services--things like "special voicemail" or "identity theft insurance."
“It’s been a problem where our office has yet to see a legitimate third-party charge placed on somebody’s phone bill,” Madigan said.
She said her office has filed 30 lawsuits against companies committing the scam since 1996 but said those companies can easily shut down and pop up somewhere else.
That’s made it hard to stop the scam from happening, but Madigan and Quinn say the new law will place standard consumer protection penalties on those committing cramming. The law will also encourage phone companies to identify and report the third party companies, so they can be shut down more quickly. In the past, phone companies have not taken action against the fraud since they themselves were not applying the charges.
Madigan said all types of phone customers are affected by the scam.
“It's residential customers, it's small business. It's large businesses. It's churches, non-profit organizations, municipalities, so the city of Chicago has been crammed,” Madigan said.
Madigan said about $2 billion worth of cramming charges appear on phone bills across the country every year.
The new law only applies to landline phones, but Madigan said a push could be made for a similar law applying to mobile phones in the future.
Consumer advocates say cramming occurs when phone customers unknowingly give their information away, like when entering an online contest.
Illinois joins Vermont as one of the first states to have such a law.