cramming
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FCC implements a 'clear ban' on surprise phone bill charges
The FCC has been willing to tackle surprise phone bill charges for a long time, but now it's more explicitly forbidding the practice. The regulator has approved rules that include a "clear ban" on cramming, or slapping customers with unauthorized charges on phone bills. The activity was already illegal, the FCC said -- this mainly "reaffirms" the agency's authority to crack down on bad behavior.
AT&T ordered to pay $7.75 million for bogus directory assistance tools
US telecom providers have a pretty bad rap, and today we're finding out that some AT&T customers ended up paying money they shouldn't have thanks to some scammers. The FCC just released a statement noting that it reached a settlement with AT&T in which the carrier will pay $7.75 million after it accidentally allowed scammers to charge $9 a month to unsuspecting wireline customers for a "sham" directory assistance service. Adding insult to injury, it seems this service was set up as a tool to help launder money; the scam was originally uncovered by the DEA.
Sprint and Verizon to pay $158 million over bogus texting charges
No, Sprint and Verizon* aren't going to escape the FCC's bid to punish carriers for letting shady text message services bill their customers. The two providers are respectively paying $68 million and $90 million to settle FCC claims that they not only turned a blind eye to this bill cramming, but frequently denied refunds when subscribers complained. About $120 million of this total payout will compensate victims, while the rest will go to both state governments and the US Treasury.
T-Mobile pays $90 million to settle claims it profited from texting scams
T-Mobile protested its innocence after the Federal Trade Commission accused it of letting text message-based scams run amok in the name of profit, but it's not going to fight that complaint to the bitter end. The UnCarrier has agreed to a settlement that will have it paying "at least" $90 million in fines to the FCC and all 50 states. Moreover, it'll have to both offer full refunds to victims and require explicit permission for third-party charges. In the future, that sketchy celebrity gossip service can't take your cash unless you offer consent. T-Mobile's decision to cry "uncle" isn't surprising given that AT&T already settled with the FTC over similar unauthorized billing. However, it suggests that Sprint faces an uphill battle in its own texting dispute -- history definitely isn't on the company's side.
Sprint could face $105 million fine over unauthorized customer billing
Sprint can't catch a break. As if its financial woes weren't enough, the outfit was recently accused of letting consumers get billed for "tens of millions" of dollars in unauthorized charges for premium text messages between 2004 and 2013. The Consumer Financial Protection Bureau's official charges, according to The New York Times, are that Sprint's billing system allowed third-parties to "cram" unauthorized fees onto your monthly statement. That's not all: The Federal Communications Commission is getting in on the action too, with the NYT's sources claiming that Sprint will face $105 million in refunds and restitution as a result of those unauthorized bill additions -- a bit more than it charged AT&T. We're going to imagine the government won't let the Now Network pay its fines $9.99 per month. [Image credit: JeepersMedia/Flickr]
AT&T to pay $80 million in refunds for unauthorized charges
In order to settle an FTC complaint over unauthorized third-party charges, AT&T will pay $80 million to the Commission for customer refunds. The FTC complaint alleges that the carrier billed "hundreds of millions of dollars" in charges from outside companies for subscriptions, ringtones, horoscopes and more without consent -- a practice more commonly referred to as mobile cramming. It also states that AT&T pocketed at least 35 percent of collected funds that usually appeared as $9.99 monthly additions. Folks who think they might've been charged without giving proper consent can submit a claim with the FTC starting today. AT&T will also pay $20 million in penalties and fees to 50 states and the District of Columbia alongside a $5 million penalty to the FCC. That brings the grand total of the settlement to $105 million. An AT&T spokesperson responded to the matter, noting (among other things) that it was the first carrier to stop billing for this so-called premium SMS content in late 2013. The rest of the statement resides after the jump.
US carriers no longer let premium text message services bill customers
Among the many surprise costs that annoy cellphone owners, unwanted text message service fees can be the worst; they're hard to stop, and not always worth the effort. Those fees may not irk many US subscribers after today, though -- AT&T, Sprint and T-Mobile now stop "problematic" premium SMS services from billing their customers. Donations and those all-important talent show votes will still go through. Verizon isn't part of today's announcements, although the company's General Counsel William Petersen tells us that Big Red is already "winding down" premium SMS services. There's a good chance that these shady messagers will simply change tactics, but they'll at least have a tougher time scamming phone owners.
FTC report on mobile payments raises concerns about 'cramming' on carrier billing
The FTC held a workshop on mobile payments last year, and it's now followed that up with a full report that raises a few concerns and offers some recommendations for the industry. Those include the expected issues of privacy and security, which the FTC encourages companies to step up their efforts on, as well as the issue of billing disputes. On that latter front, the FTC draws attention to one problem in particular known as "cramming," in which companies or individuals place fraudulent charges on a user's cellphone bill. As the FTC notes in the report, "there are no federal statutory protections governing consumer disputes about fraudulent or unauthorized charges placed on mobile carrier bills," and it further adds in a blog post that "the way mobile carrier billing works makes this a challenging problem to solve." It goes on to outline some consumer protection measures it says all carriers should adopt, and notes that it will further address the issue at a roundtable on May 8th. You can find the full report at the source link.
Verizon halts dubious third-party billing on landlines, years after landlines were 'in'
Okay, okay -- landlines are still useful. But rapidly growing, they are not. That said, Verizon is caving to congressional pressure in a relatively minor way, announcing that it'll be banning certain third-party charges on landline bills. In political circles, the process is known as "cramming," where customers (oftentimes unknowingly) submit their number to certain third-party add-ons that have generated some $10 billion in revenue over the past five years. Sen. Jay Rockefeller from West Virginia is applauding the move, and also encouraging Congress to make this commonplace across all carriers. Curiously, there's no mention of mobile blocking, where consumers are regularly duped into subscribing to recurring fees via text-based competitions and contests. Perhaps when we've all moved on to telepathy, the feds can get right on that.
