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Senate committee: Mobile phone 'cramming' widespread, profits carriers

Grant Gross | July 31, 2014
Mobile carriers have pulled in hundreds of millions in profits through third-party charges tacked onto customers' bills without their consent, according to a report from a U.S. Senate committee.

After the carriers ended support for third-party PSMS billing, customer complaints about unauthorized billing have fallen dramatically, with less than 2 percent of third-party billing now generating complaints, Altschul said.

There's been "wrongdoing at every stage" of the third-party billing market, Blumenthal said, including carriers, billing aggregators and companies providing content such as horoscopes or celebrity gossip.

The committee report suggested carriers have been slow to react to cramming.

"The wireless industry was on notice at least as early as 2008 about significant wireless cramming concerns and problems with third-party vendor marketing tactics, yet carriers' anti-cramming policies and sometimes lax oversight left wide gaps in consumer protection," the committee report said.

In some cases, carriers allowed third-party vendors to continue billing consumers even when more than 50 percent of vendor revenues were refunded because of customer complaints, the report said.

The committee's report and hearing came just weeks after the U.S. Federal Trade Commission filed a complaint against T-Mobile USA accusing the carrier of making millions of dollars on third-party billing while ignoring many customer complaints.

T-Mobile has disputed the FTC's allegations.

The FTC's action against T-Mobile is the agency's first against a carrier, although it has filed about 30 complaints related to cramming in the last 15 years.

 

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