MCI Crams Customers' Phone Bills

Cramming is the nickname that's been given to the process of adding charges to people's phone bills or credit card bills for services that they didn't knowingly and intentionally authorize.

Frequently it has been associated with voicemail services that people unknowingly signed up for when they entered a sweepstakes drawing. More recently, people have had their credit cards crammed with charges for certain internet services that they never authorized at all, or for what were supposed to be free trials of the service.

As fraudulent and abusive as these practices are, the biggest cramming culprits are much better known businesses: MCI Worldcom is one example of a company that has repeatedly crammed millions of their customers, but it seems that the news media never reports it.

Is it really cramming?

MCI customers are finding new charges on their phone bills. The customers never agreed to these new charges, they didn't receive advance notice of the charges, and in all likelihood, they never received any notice of the charges. Like cramming victims, many MCI customers won't even realize that the new charges have been imposed.

How does MCI do it?

Ordinarily, companies can't add new charges, or increases charges for existing services, unless you've agreed to these changes in advance. Most commonly, you implicitly agree to these changes by continuing to use the service -- after the company informs you of the change.

Regulated utilities have always been an exception. Once the electric company's new tariff with higher electric rates was approved by the state's public utility commission, there was limited value to providing advance notice to every customer, if for no other reason than that the electric company was legally the only supplier of electricity in a given area.

The same rule made plenty of sense for telephone companies as well, until the breakup of AT&T. When AT&T was broken up in 1984, competition and deregulation were introduced. Long distance companies could change their rates without getting approval from any regulatory agency, and customers always had the option to shop around, finding another long distance companies with better rates.

Bizarrely, though, the "notice by tariff filing" rule was still accepted. What this means is that there is no federal regulation requiring advance notice of rate changes to customers. Filing the new tariff with the FCC is all that's required, along with a possible incomprehensible notice in a daily national newspaper such as the Wall Street Journal or USA Today.

MCI Customer Service Responds

The Cagey Consumer spoke to various MCI customer service reps about the latest new charges on his phone bill... charges for which no advanced notice was received. Each customer service rep had a different explanation:

MCI notified all customers of the new charges.

MCI only notifies customers in those states where it's required by state law.

You're the one customer in a million who didn't get notified of these new charges.

MCI's History

In addition to failing to notify customers of a rate change, MCI has used other techniques which fail to effectively notify customers of rate increases:

notifying customers only after the rate changes have gone into effect

using deceptive wording making it appear that a rate increase is actually a rate decrease

Legal or Not Legal

Is "notification by tariff" really legal, when there's no substantive regulatory process? The Cagey Consumer's non-authoritative opinion is a resounding No way! But legal or not, there's no excuse for it. Advance notification to customers, in a non-deceptive manner is not an onerous burden. If MCI fears that their customers will walk if they know the truth, that's the way it is. And any company that won't be up front with customers about such price increases has no business being in business.

The FCC doesn't win any gold stars either. A regulatory determination that customers have a right to advance notice should be a no-brainer, but apparently, that's too much to expect from the FCC!

Updated March 17, 1998