ALBANY, N.Y. -- Verizon Communications Inc. will fight the ''cramming" of unauthorized charges on phone bills by companies such as Internet providers.
New York Attorney General Eliot Spitzer said that the settlement represents the first time a telephone company has been required to monitor and correct the fraudulent billing practices of others. The action follows complaints about the unauthorized charges by Internet providers, Web-hosting and other services on Verizon phone bills.
Spitzer said small businesses and residential customers in New York claimed that Verizon did nothing to help them resolve the charges. The agreement applies only to New York customers.
''Verizon has an obligation to protect its subscribers from fraud," Spitzer said. ''Under this agreement, the company will take a series of steps to protect individual consumers and small businesses from third parties that place unauthorized charges on phone bills."
Verizon, however, already had policies to act promptly on behalf of its customers, said Verizon spokesman Cliff Lee.
''Verizon takes very seriously every complaint of cramming we receive from our customers, and more than 99 percent of the time our customer service representatives handle these complaints according to the policies and practices we have in place," Lee said. He said Spitzer's probe found only a small number of times Verizon's policy wasn't followed.
Under long-standing policies, Lee said, Verizon eliminates the contested charge and then contacts the company that put it on the phone bill.
''When we learn of the relatively small number that may not have been handled that way, Verizon is committed to making sure the errors are corrected and the customers' concerns are addressed," he said.
Ken Dreifach, Spitzer's Internet Bureau chief, said the office received 150 complaints, but the investigations led to many other failures to adhere to the policy.
Under the agreement, Verizon will pay $75,000 for the cost of the investigation and notify customers of a toll-free phone number for more information.
The company also will provide credits to ''crammed" customers, end contracts with companies that cram, and block future charges by cramming companies.