FTC: Let Consumers Block Third-Party, Unauthorized Mobile Phone 'Cramming' Charges

The Federal Trade Commission wants mobile phone carriers to give consumers the right to block third-party charges on their mobile bills altogether, and to inform consumers “clearly and prominently” of this right.


This is just one of the recommendations the agency outlined Monday in a report on steps that carriers and third-party merchants should take to reduce or eliminate the deceptive practice of “mobile cramming.”
Cramming is when third parties place charges on a consumers phone bills that are unauthorized.
Cramming often involves outright scams that go undetected by the consumers.
Mobile Cramming: An FTC Staff Report” includes five recommendations aimed at mobile carriers, merchants who offer goods and services charged directly to mobile phone bills, and billing intermediaries known as aggregators, who facilitate the placement of such charges on mobile phone bills.
“Mobile cramming is an issue that has affected millions of consumers, sticking them with charges they did not authorize, and the FTC has worked hard to combat it,” said Jessica Rich, the Director of the FTC’s Bureau of Consumer Protection.  “The best practices recommended in our report build on the FTC’s active enforcement in this area and would give consumers needed protections to rein in the problems we have seen.”
Here are the recommendations:
Give consumers the right to block third-party charges.  FTC staff calls on mobile phone carriers to give consumers the right to block third-party charges on their mobile bills altogether, and to inform consumers clearly and prominently of that right.  Carriers should inform consumers of this right not only when consumers create their account, but also on an ongoing basis.
Ensure that advertising, marketing, and opt-in processes for charges are not deceptive. Advertising, marketing, and opt-in processes for third-party mobile account charges should be clear about how much and how often a consumer will be charged.  Mobile carriers should closely monitor the merchants placing charges through their bills to scrutinize whether they are risky or suspicious, and if so, take steps to prevent them from placing charges.
Get  express, informed consent before charging consumers.  Consumers’ express, informed consent must be obtained before placing charges on their mobile phone bill, and reliable records of that consent should be kept.  Carriers should closely monitor refund rates, consumer complaints and other signs of possible cramming and take action where necessary.
Clearly display third-party charges on bills.  Mobile bills should clearly and conspicuously show third-party charges.  Carriers should consider steps to make third-party charges more prominent, such as separate billing lines for third-party charges that make it clear to consumers which charges are directly from a carrier and which are from a third party.  In addition, mobile carriers should give consumers using pre-paid calling plans who do not otherwise receive bills from their mobile carrier to receive specific notification that a third-party charge is being deducted from their account.
Create an effective process for resolving disputes.  Mobile carriers should put in place an effective dispute resolution process that gives clear information to consumers about how to dispute suspicious charges and seek refunds for unauthorized charges.  As the report notes, consumers have often complained that carrier refund processes are difficult and inconsistent. In addition, the report calls on carriers, where possible, to give consumers who were crammed refunds of recurring monthly charges including previous months, and when a third-party is stopped from billing due to cramming, to notify consumers whose bills were charged so they can seek refunds for those charges.

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