An old scam becomes new again: Bill-cramming scams are going mobile

Have you checked your cell phone bill lately? I mean like line-by-line, page by page? If you do, you may find a few charges that you didn’t authorize. It’s a practice called “bill cramming” and while it used to be a big problem on landlines, it has been on the rise on mobile phone bills.

This week the Federal Trade Commision cracked down on the practice for the first time, says Malini Mithal, the assistant director in the FTC’s Bureau of Consumer Protection’s Division of Financial Practices. She said the defendants in the case were “offering dating tips and horoscopes and other types of services via text messages,” then adding the charges to the users' cell phone bills.

Mithel said many of the consumers who complained to the FTC had deleted the messages or responded texted "Stop" and they were charged anyway. Sometimes as much as $9.99 a month.

"It’s a consumer fraud," she said.

Expect more of these scams, says John Breyault, with the National Consumers League in Washington, D.C.

“The mobile platform is more vulnerable to fraud because it’s a platform that’s becoming a more acceptable form of payment,” Breyault said.

In the 1990s, when phone cramming hit landlines, Breyault says phone companies eventually agreed not to allow third-party charges. But, he says, that’s not really an option today because people like buying legitimate services and charging them to their cell phone bills.

Ruth Susswein is with the Consumer Federation of America. She says consumers need to guard their information. 

“You don’t want to give your cell phone out just to anyone,” she says.

Susswein said the main issue is that paying with your cell phone is largely unregulated. And many consumers say cell phone carriers are slow to refund — or just don’t refund — unauthorized charges.

Her suggestion: pay with a credit card because the law offers them more protections.

About the author

Queena Kim covers technology for Marketplace. She lives in the Bay Area.
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Last year, I joined the family plan with my parents to save money. When I saw a suspicious charge on their bill, I did research and discovered that they had been charged $210 over the course of nearly two years in these fradulent charges! Our cell provider only refunded $40! The crazy thing is that we are sure we never signed up, so we are completely confused how it got on their bill in the first place. The cell provider claims it's not *their* fault--it's the shady third-party company's fault--which is mostly true. However, can't the cell providers do a little vetting to protect their customers from these frauds? Maybe send us a text after a charge appears three months in a row?

I had this happen a few years back. An unexpected $9.99 charge showed up on my bill labeled as "premium text". Verizon couldn't tell me what it was for; eventually they gave me a 3rd party phone number to call where nobody ever answered the phone. Verizon wouldn't refund the money. The 3rd party wouldn't call me back. I was just stuck paying. This investigation is LONG overdue.

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