VII. Complaint Procedures

We have adopted a procedure that enables subscribers to resolve cramming problems by contacting the billing telephone company that issued the bill. This approach, which was recommended by some of the parties who commented on the first draft of these rules, is very similar to the procedures for resolving questions about credit card charges set forth in Regulation Z (implementing the Truth in Lending Act, discussed above), which are familiar to many consumers. It also meets the specific requirements set forth in Section 2890.

The complaint procedure set forth in the interim rules provides a simple way for subscribers to get unauthorized charges removed from their bills, and to get related billing errors corrected. To dispute an unauthorized charge, a subscriber calls the billing telephone company, which will attempt to verify authorization. If the billing telephone company is unable to obtain verification that the charge was properly authorized from the vendor or billing agent that submitted the charge, the billing telephone company will be required to credit the charge to the subscriber. Pending verification of a disputed charge, a subscriber is not required to pay that charge, and the billing telephone company may not report the unpaid charge as delinquent to credit reporting agencies, or send the charge to collection. Here, too, the complaint procedures are consistent with procedures for disputing credit card charges.

These complaint procedures should help deter cramming by making it unprofitable. If billing telephone companies withhold payment for unauthorized charges, most cramming will disappear. Telephone consumers will suffer less harm and billing telephone companies will receive fewer complaints.

Subscribers dissatisfied with the billing telephone company's resolution of their complaint may file an informal complaint with the Commission's Consumer Affairs Branch, which will contact the billing telephone company and attempt to resolve the complaint informally.

Following formal adjudicatory proceedings, which may be initiated by a formal complaint or on the Commission's own motion pursuant to the Commission's existing Rules of Practice and Procedure, the Commission may impose penalties on billing telephone companies, billing agents, or vendors that have violated the provisions of Sections 2889.9 and 2890 or the Commission's implementing rules. (See Section 2889.9(b).)