Wireless Cramming No Longer a Problem as Industry Changes, CTIA Says

Wireless cramming problems may soon disappear from the telecom landscape since all four major national carriers have said they will end premium SMS billing programs for their subscribers, CTIA told the FCC in reply comments on an Aug. 27 public notice. In July, the FTC urged the FCC to impose anti-cramming rules on wireless carriers, arguing that voluntary industry efforts aren’t enough to protect consumers (CD July 24 p1).

"As the Commission is aware, the vast majority of wireless cramming concerns have been focused on commercial premium SMS billing by third parties,” CTIA said (http://bit.ly/JHOmpV). “While carriers have worked to protect their customers from bad actors and quickly resolve any consumer complaints that arise, the popularity of premium SMS services has waned as more and more consumers access the Internet through their smartphones and other wireless devices, where they can access websites and apps that replace many subscription SMS services. The carriers’ decision to soon end commercial premium SMS billing programs recognizes these changing consumer priorities."

While carriers may continue to allow billing for charitable and political donations “these services have not been the source of consumer complaints,” CTIA said. “Many organizations, including the Red Cross and the U.S. State Department, have successfully implemented two-party authentication systems that protect consumers while still making charitable giving fast and easy."

AT&T offered similar comments: “Shortly after the CTIA’s [first round] comments were filed, AT&T voluntarily decided to discontinue billing for premium short message service (PSMS) content” (http://bit.ly/1c0XAaS). “While cramming complaints from wireless customers are very infrequent PSMS has been the largest source of wireless cramming complaints. The already low rate of wireless cramming complaints should now decline even more."

Consumers Union disagreed, saying the FCC should offer the same protections against wireless cramming as are in place in the wireline world. CU offered real-life examples. “Maria M. of Chula Vista, California said that she inputted her phone number in an online survey with promises of winning an iPod, and wound up with a $10 monthly charge to her cell phone bill for a movie trivia site she had never heard of,” CU said (http://bit.ly/19y3FLi). “Maria also complained to us that because she enrolls in autopay online, she was frustrated that she was only able to catch the charge after three months.” Another example: “Violet A. of Burton, Michigan caught a recurring $9.99 monthly charge on her wireless bill for a horoscope service -- as well as three other separate $9.99 charges for other unrecognizable services. ... Although the provider was able to cancel the services, Violet was told that she would have to contact each individual company to ask for a refund."

The National Association of State Utility Consumer Advocates said it’s time for the FCC to clamp down on cramming. “The cramming problem has persisted for the better part of two decades, at a cost to American consumers in the billions of dollars,” NASUCA said (http://bit.ly/J67hcO). “Often at the source of the difficulty are nefarious activities of fraudsters and scammers, coupled with defects in the claimed authentication processes used by the industry. While the difficulties have always morphed from one thing to another, they have never gone away.”