North Carolina Department of Justice
North Carolina Department of Justice
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Cooper joins other AGs to combat mobile cramming

Release date: 6/25/2013

Unauthorized charges a growing national problem that federal government must tackle

Raleigh: Mobile cramming, the placement of unauthorized charges on mobile phone bills, is a growing problem that needs national attention, Attorney General Roy Cooper said Tuesday.  Cooper joined leaders from 40 other states and territories to file comments on mobile cramming with the U.S. Federal Trade Commission yesterday.

“Outside companies sneak bogus charges onto consumers’ cell phone bills, hoping people won’t notice and will just pay up,” Cooper said.  “These charges may seem small, but they can really add up because they’re hard to detect.”

Consumer Reports estimates that consumers nationwide may lose as much as $2 billion to cramming each year.

Attorneys general across the country report receiving complaints from consumers about unauthorized charges of $9.95 to $24.95 on their mobile phone bills.  The charges are usually for goods and services that the consumers neither requested nor used, such as text messages or alerts on weather, sports, celebrity gossip or trivia. 

Most consumers don’t even realize they’ve been crammed.  Consumers don’t expect to get charges from third-party groups on their mobile phone bill, and in many cases the names used by those third-parties make the charges look as if they come from their cell phone carrier, not an outside party.  When consumers do discover the charges on their bills, sometimes after several months, they are rarely able to get a full refund.

Cramming of landline phones emerged as a major problem in the 1990’s, spurring enforcement action by state attorneys general and federal regulators.  With the growth of cell phones in recent years, cramming has migrated from landline to mobile phones.
 
The FTC is currently examining the problem of mobile cramming and is soliciting comments.
 
“As consumers increasingly opt to use their mobile phones to pay for phone-related goods and services such as games and applications, as well as for unrelated consumer goods, they are also experiencing increasing instances of significant unauthorized third-party charges on their mobile phone bills,” the attorneys general wrote in their comments to the FTC.
Cooper and the other attorneys general identified four areas of particular concern with mobile cramming:

  1. Unauthorized charges being placed on consumers’ bills for unwanted and unused services;
  2. Inadequate disclosure of third-party charges on mobile phone bills;
  3. Inadequate mechanisms for consumers to effectively block third-party charges and obtain refunds; and
  4. The lack of state and federal statutory protections governing consumer disputes about fraudulent or unauthorized charges placed on mobile phone bills.

To protect consumers from cramming, Cooper offered the following tips:
  • Read your phone bill carefully every month. Review it like you would your credit card or bank statement.
  • Dispute charges you don’t recognize on your phone bill. Ask your mobile phone company to remove the charge.  If you don’t get a satisfactory resolution, file a complaint with the Attorney General’s Consumer Protection Division online at www.ncdoj.gov or call us at 1-877-5-NOSCAM.
  • Think twice before providing your cell phone number online to enter a contest for a “free” prize or subscription.  Often this is just a ploy to sign you up for a service you don’t want.
  • Be careful when responding to spam text messages. Even if you reply “Stop” to a spam message, a third-party billing company may bill you for an unwanted service.

Along with North Carolina, attorneys general and consumer protection authorities from the following states and territories signed onto the letter: Alaska, Arizona, California, Colorado, Delaware, District of Columbia, Florida, Guam, Hawaii, Idaho, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York,  North Dakota, Ohio, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virgin Islands, Washington and Wyoming.