TINY FEES “CRAMMED” INTO CELL PHONE BILLS

December 6th, 2012

In our last few posts, we reported on class action settlements regarding TCPA violations involving unwanted text messages (i.e. text spam) and overages based on wireless plan changes. Consumers should also be aware of charges on their cell phone bills from third party carriers.

Indeed, significant charges would likely raise concerns (and a customer’s ire) and would likely lead to a provider issuing a refund of some sort. However, small charges would likely go unnoticed, and the party initiating the charge would collect unfettered fees.

Cell phone users are potential victims of a process called “cramming”, where third party entities place unauthorized charges on a user’s bill. In many instances, a user will receive an innocuous text message or email indicating that he or she has chosen to reinstate (or continue) a service, usually for voicemail services or mobile web hosting that the consumer did not specifically agree to. The consumer will hardly notice it or brush it aside as spam, but it gives the provider a way to charge the consumer for the service.

When the bill comes, the charge will largely go unnoticed because it is so small (usually less than $3.00). However, if this type of charge affects 25,000 customers, the amount becomes very significant. Cramming is a growing problem as the Citizens Utility Board (CUB) has found that the number of fraudulent fees have grown significantly over the last year. The Federal Communications Commission (FCC) has upgraded its enforcement actions as more people use text messaging to communicate. Also some states have sued crammers under consumer protection laws.

Nevertheless, a class action lawsuit may send the message to unaffected crammers that overcharging consumers will not be tolerated.

Source: ConsumerAffairs.com, Cramming appears to be migrating to cellphones, December 6, 2012