FTC Gives Carriers Tips on Preventing Wireless Cramming
The wireless industry could do more to prevent fraudulent charges ending up on subscriber phone bills, the Federal Trade Commission said in a new report Monday that offers a few suggestions for how the industry could step up its efforts.
FTC officials have been focusing more on wireless cramming — which is when a third-party company places a charge on your mobile phone bill without authorization — amid a rise in consumer complaints about the practice. Carriers get a percentage of the charge.
The report comes less than a month after the FTC slapped T-Mobile with a lawsuit accusing the wireless carrier of profiting from millions of dollars in fraudulent charges that snuck onto subscribers’ monthly bills. T-Mobile has denied the charges.
The FTC has been relatively active in the past few years trying to crack down on the mobile scammers. The report comes just a few days before a Senate committee is set to hold a hearing on the problem.
Among the FTC’s 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.
- Ensuring 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. … 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: 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.
- 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.
A spokeswoman for CTIA, the wireless industry’s trade association, said they were still looking at the report and had no comment on the FTC’s recommendations.