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FCC takes closer look at fake mobile phone charges

By Jennifer C. Kerr

Associated Press

LAST UPDATED: 11:56 a.m. HST, May 09, 2013

WASHINGTON » When a mysterious, unauthorized fee appears on your cellphone bill, it's called "cramming" and consumer advocates and regulators worry it's emerging as a significant problem as people increasingly ditch their landlines for wireless phones.

The cramming fee is bogus and usually small, under $10 a month. It might be listed on your bill as a "premium service" or other generic-sounding charge. Cramming had long been a problem with traditional landline phones, but after pressure from lawmakers, regulators and others, some of the largest landline carriers last year said they would no longer allow third-party billing — where an outside company offers and then charges the landline customer for services like third-party email, faxing, and voicemail.

Now, the focus of concern is shifting to wireless phones and cramming.

"As people continue to use mobile phones as a payment option, this problem is likely to grow," says Malini Mithal, an assistant director in the financial practices division at the Federal Trade Commission. "It's just a new opportunity for fraudsters."

The commission held a daylong conference on the issue Wednesday with consumer advocates, wireless carrier representatives, and state and federal officials. The meeting came just weeks after the FTC lodged its first mobile cramming case, accusing a Georgia-based company, Wise Media, of bilking consumers out of millions of dollars for text messages with horoscopes, flirting tips and other information.

According to the agency, consumers across the country were signed up randomly for text services from Wise Media and charged $9.99 a month on their mobile bills, without their knowledge or permission. The text messages suggested people had subscribed to the service, but many consumers dismissed the texts as spam. People who responded and said they didn't want the service were charged anyway, the agency said.

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entrkn wrote:
sounds like interstate fraud to me
on May 8,2013 | 09:35PM
hikine wrote:
This charge showed up on my billing and TMobile reversed the charges and cancelled it. It was a weekly tip on how to improve my Android phone at $9 per month! All I remember was I got an SMS message to take a survey regarding my phone carrier's performance and they charged me monthly for this bogus service afterwards. Very sneaky these perps!
on May 9,2013 | 03:59AM
bender wrote:
I don't believe this scam would work unless the carriers are participating in it. They control what goes on your bill and who has access to you through their system.
on May 9,2013 | 05:51AM
cojef wrote:
Anyway to improve the service providers' bottom line. Solution: Scrutinize your billings and make sure their no addtional charge appear in the itemized portion of the billing statement. If in doubt, ask for a clarification until you are satisfied. We still use landline tele and prepaid for our cell-phone. We do not use a smart phones.
on May 9,2013 | 07:56AM
localguy wrote:
Nip this problem in the bud with a Federal law prohibiting phone companies to allow third-party billing. Yes the carriers will whine about it but it is their problem. Better to stop it with a simple Federal law backed up with massive fines, say $100k for every time they fail to stop third party billing. Nothing gets a company's attention faster than having to pay a fine. Do it now.
on May 9,2013 | 08:06AM
miss_laulau wrote:
I always receive surveys from AT&T but I delete them. I hate AT&T, they charge me for every damn thing. As soon as I can, I'm switching.
on May 9,2013 | 08:07AM
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