FTC: Protect Consumers from Wireless Phone Bill ‘Cramming’

The “cramming” of unauthorized charges on mobile phone bills is becoming a serious problem for consumers and some legal protections are needed if the wireless industry doesn’t self-police the issue sufficiently.
The Federal Trade Commission today relayed its concerns about third-party charges on wireless phone bills in a formal filing with the Federal Communications Commission.
At the very least, wireless providers should offer consumers the ability to block such third-party charges, the FTC said
The FTC last year informed the FCC of widespread landline phone bill “cramming,” a much more prevalent practice.
But the growing usage of smart phones has expanded the arena for scam artists to charge below-the-radar amounts, many times less than $10 a month, that often go unnoticed by consumers.
Many of the complaints received by the FTC involve recurring charges for “premium services” that provide trivia or horoscope information by text message to a consumer’s phone.
Consumers often report receiving a text message informing them of a subscription to a service they have never heard of and that they never requested.
“At a minimum, all wireless providers should offer their customers the ability to block all third-party charges,” the FTC wrote in its “comment” to the FCC. “Wireless providers should clearly and prominently inform their customers that third party charges may be placed on the consumers’ accounts and explain how to block such charges at the time accounts are established and when they are renewed.”
A coalition of consumer groups has suggested that “wireless cramming” is poised to become a major consumer fraud issue, the FTC said.
The wireless phone industry has made some arrangements with messaging aggregators – the companies that facilitate the billing and connection between the wireless providers and content providers – to provide incentives for aggregators to work only with “reputable” content providers.
The FTC is encouraged by such actions, but concluded that it is not enough to combat the problem.
“Wireless providers should provide a clear and consistent process for customers to dispute suspicious charges placed on their accounts and obtain reimbursement,” the FTC said. “Such measures should be mandated by law or regulation to ensure that consumers have baseline protections.”

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