How come no one goes to jail for 'cramming'?

Sticking consumers with unauthorized charges on their phone bills is stealing

So the Federal Communications Commission wants to step up its campaign against "cramming" charges on phone bills. How nice. Cramming, if you're unfamiliar with the term, is the placement of unauthorized charges onto a customer's monthly phone bill. According to FCC Chairman Julius Genachowski, 20 million Americans each year are victims of cramming.

[Also see: FCC gives tips for avoiding phone bill 'cramming' charges]

IDG News Service's Grant Gross writes:

Cramming charges typically range from US$1.99 to $19.99 per month, but only about one in 20 telephone customers notice the additional charges, Genachowski said. "These mystery fees are often buried in bills that can run 20-or-so pages, and they are labeled with hard-to-decipher descriptions," he said. "As a result, consumers too often get bilked out of hundreds of dollars."

In some cases, the charges come from the customers' telephone carriers or third-party carriers. But the FCC has seen customers "getting charges for yoga classes, cosmetics, diet products, and -- yes -- psychic hotline memberships," Genachowski said.

Last week the FCC announced it was proposing $11.7 million in penalties against four companies that "that appear to have unlawfully billed tens of thousands of consumers for unauthorized charges." First, I can't help but notice the FCC is "proposing," and not "imposing," the penalties. That might just be a word choice, and still means the four companies are on the hook to pay. I just don't know. But beyond that, here's my question: If cramming is "illegal," how come it's not being treated as a criminal activity? How come the FBI isn't involved? How come no executives from the cramming companies are going to prison? Cramming is stealing. It's no different than you or me hacking into someone's bank account and transferring money to our own accounts. It's no different than stealing someone's credit card and going on a shopping spree. It's no different than picking someone's pocket and taking their money. Yet it seems that the only consequence is that companies get fined. And you know what? That basically reduces the "penalty" to a cost of doing business. The fines probably are even tax-deductible. If the feds really want to get serious about protecting consumers from being ripped off, we should start seeing some CEOs doing hard time. Maybe that would make a difference. And in case someone argues that wouldn't be practical because of prison overcrowding, I say: Cram them in.

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