FLORIDA CRAMMING

1. May 11, 2011 FLORIDA CRAMMING SOLUTIONS FLORIDA OFFICE OF THE ATTORNEY GENERAL Keith VandenDooren Special Counsel

2. FLORIDA’S CRAMMING EXPERIENCE Florida cramming complaints over the past 5 years: • TELEPHONE CARRIERS: Land LineWireless • AT&T 280 48 • Verizon 94 86 • Sprint/Embarq/Century Link 200 • Sprint 24 • T-Mobile 16 • TOTAL574174

3. FLORIDA’S CRAMMING EXPERIENCE • AGGREGATORS (Land Line Complaints) • ILD: 209 • BSG/ESBI: 276 • The Billing Resource/Integretel: 89 • TOTAL 574 • THIRD-PARTY VENDORS • Nationwide – over 500 • Florida – over 60

4. TYPES OF FLORIDA CRAMMING COMPLAINTS • Land Line and Wireless • Third-Party Charges and Carrier Add-ons • Crammed Products and Services include: • Roadside Assistance • Website Design and Hosting • Identity Theft Protection • Directories • Internet Service • Coupons • Voice Mail Boxes • Tech Support • News & Stock Market Updates

5. CRAMMING COMPLAINTS FROM FLORIDA CONSUMERS • A Port St. Lucie resident stated she was shocked to see an unauthorized charge from Voicemail Solutions for $13.97 on her AT&T phone bill. After getting no resolution from the carrier she called Enhanced Services Billing, Inc., whose representative said her husband had ordered the services on 12/08/09 over the internet. “When I called, they said your husband had ordered it. I said that’s impossible, my husband died three months prior to this.And I really wasn’t in shape to deal with this . . . it just infuriated me.”

6. CRAMMING COMPLAINTS FROM FLORIDA CONSUMERS • A Fort Pierce resident paid extra charges on her AT&T phone bill for three months before noticing them. “It was something like $20.00 a month charged to my bill without my authorization and no one would take them off.I ended up complaining to the PSC (Public Service Commission) and the AG. Within a couple of days, I got a supervisor in Atlanta (from AT&T) going over my full phone bill to take out those charges.”

7. CRAMMING COMPLAINTS FROM FLORIDA CONSUMERS • Another Florida resident states: “Verizon is totally unresponsive to any remedy on their part. My agreement is with Verizon Wireless, not with any other third party and I have never given permission to Verizon to allow any other entity access to my account as though it were a creditcard.”

8. CRAMMING COMPLAINTS FROM FLORIDA CONSUMERS • A resident of Orange Park complained that her 79 year-old mother had unauthorized charges of $10 per month on her wireless phone bill. “I have been told by Sprint that they cannot remove or discontinue the charges because these charges are an “opt-in” service that was texted to her phone. When she didn’t reply to the text message, she was “opted in.”

9. CRAMMING COMPLAINTS FROM FLORIDA CONSUMERS • A representative of a Florida business in Melbourne, complaining of unauthorized charges, stated: “I am very concerned at being told by AT&T that they are obligated to pass on third-party charges. I asked if I could block third-party charges and was told that I could not.”

10. CRAMMING COMPLAINTS FROM FLORIDA CONSUMERS • A Florida resident who had previously contacted the Florida Attorney General stated: “I did contact the Verizon phone company as you suggested and had a third party block placed on my line. When I initially called (Verizon) they credited my bill for the amount charged but never told me about the third party block. I would think (the) block would be automatic unless the customer requested not to have a block. That way such events would not take place.”

11. THE CRAMMING PROBLEM Consumers: • Do not know that third-party charges can be placed on their telephone bill • Do not believe that carrier will place charges on their bill for services for services not authorized - - “trust” the carrier • Are crammed over extensive periods of time

12. THE CRAMMING PROBLEM • Third-party vendors, aggregators and the carriers are incentivized not to make refunds • Refunds, if given, are typically for a limited period (e.g., 3 months) • Unregulated billing mechanism • No protection from unauthorized charges • No effective structure in place to challenge charge

13. THE CRAMMING PROBLEM • Each filed complaint to a governmental agency represents hundreds of thousands of other consumers who: • Do not recognize that they have been similarly crammed, or • Deal directly with the carrier, aggregator or vendor.

14. POTENTIAL CRAMMING SOLUTIONS:Third-Party Charges • INITIAL BLOCKCould Be Initiated For All Third-Party Charges on Land Line Bills • Block could be removed if properly authorized by the account owner after clear and conspicuous disclosure of terms and conditions • Verifiable express informed consent to the terms and conditions • Clear and conspicuous written confirmation on separate billing page

15. POTENTIAL CRAMMING SOLUTIONS: Carrier Add-on Charges • Most are oral negative option offers made in store or by phone • Prohibition Could Be Initiated Against Billing Based On Oral Offers And Acceptance • Require separate written disclosure of negative option terms and conditions • Require verifiable express informed consent to negative option terms