Published: November 2013

Wireless cramming fraud costs consumers millions annually

“Cramming” of unauthorized charges on wireless phone bills poses a serious problem for American consumers. Wireless stakeholders have failed to protect wireless consumers from cramming fraud. Consumer Action and coalition advocates are urging the Federal Communications Commission (FCC) to take regulatory action to protect consumers.

The FCC proposed new rules designed to combat a common telephone billing scam called "cramming." Customers get crammed when a dishonest company puts charges on their phone bill (landline or wireless) for services that were not wanted or authorized. The Federal Trade Commision, the agency that has dealt with landline cramming violations, explains that consumer submitted complaints involve recurring charges of just under $10 a month for “premium services” that provide trivia or horoscope information by text message to a consumer’s phone.

Consumers often report receiving a text message informing them of a subscription to a service of which they have never heard and that they never requested. The FCC estimates that as many as 20 million people are crammed each year and that cramming complaints related to wireless service appears to have “nearly doubled” from 2008-­‐2010 to 2011. More alarming, a Commission study found that only 1 in 20 cramming victims realizes they’ve been scammed.

Consumer Action and advocates worry that the wireless third-­party billing ecosystem relies on a variety of strategies to prevent cramming fraud. Unfortunately, ­these measures do not appear to sufficiently address the problem. Current anti-fraud measures rely mostly on consumers spotting and reporting suspicious charges on their wireless bills. The FCC needs to consider and implement sensible regulatory measures to help protect consumers from wireless cramming fraud while protecting legitimate commerce.

 

Lead Organization

National Consumers League

Other Organizations

Center for Media Justice | Citizens Utility Board | Consumer Action | Consumer Federation of America | National Consumer Law Center | National Consumer League | Virginia Citizens Consumer Council

More Information

For more information, please visit the National Consumer League's website.

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Wireless cramming fraud costs consumers millions annually   (NCL_et_al_FCC_Cramming_Comments_11182013_FINAL.pdf)