Mobile-phone scams have cost Americans hundreds of millions of dollars over the past several years, according to a new report from the Senate Commerce Committee.
Unauthorized charges by third-party vendors on consumers’ phone bills for services such as celebrity gossip, horoscopes, or fake contests — commonly known as “cramming” — is much larger than previously reported, according to the report released Wednesday.
Consumers’ losses are mobile-phone companies’ gains. The report finds companies such as Verizon, AT&T, T-Mobile, and Sprint reap the benefits of this fraudulent activity, generally keeping up to 40 percent of the charges.
Mobile carriers allow third-party vendors to charge consumers for services like music and app downloads and charity or political donations directly through their phone bill.
The wireless industry has adopted voluntary measures to protect consumers from fraud, said Michael Altschul, general counsel for cell-phone lobbying group CTIA, during a hearing on the topic Wednesday.
But Senate Commerce Committee Chairman Jay Rockefeller says they are not doing enough.
“Industry representatives told us that their voluntary policies and practices provide consumers — and I quote — a ‘robust process designed to protect customers from unscrupulous actors,’ and that cramming on wireless phones has been ‘de minimis,’ ” Rockefeller said in a statement Wednesday. “But this report makes it clear that is not the case.”
Unwanted third-party charges are often difficult to detect. Customers who do notice unwanted charges often face an uphill battle to refund lost money, because phone bills do not have the same fraud protections as credit cards.
The Senate study comes two days after the Federal Trade Commission released five recommendations to mobile carriers to crack down on cramming, including giving consumers the option to block third-party charges, clearly displaying third-party charges on phone bills, and making it easier for consumers to resolve charge disputes.
The FTC filed a complaint earlier this month against T-Mobile for placing millions of dollars worth of unwanted charges on customers’ phone bills.
T-Mobile CEO John Legere said the FTC’s complaint was “unfounded and without merit.”
What We're Following See More »
With three days until the first debate, the polls are coming fast and furious. The latest round:
- An Associated Press/Gfk poll of registered voters found very few voters committed, with Clinton leading Trump, 37% to 29%, and Gary Johnson at 7%.
- A McClatchy-Marist poll gave Clinton a six-point edge, 45% to 39%, in a four-way ballot test. Johnson pulls 10% support, with Jill Stein at 4%.
- Rasmussen, which has drawn criticism for continually showing Donald Trump doing much better than he does in other polls, is at it again. A new survey gives Trump a five-point lead, 44%-39%.
In contrast to Hillary Clinton's meticulous debate practice sessions, Donald Trump "is largely shunning traditional debate preparations, but has been watching video of…Clinton’s best and worst debate moments, looking for her vulnerabilities.” Trump “has paid only cursory attention to briefing materials. He has refused to use lecterns in mock debate sessions despite the urging of his advisers. He prefers spitballing ideas with his team rather than honing them into crisp, two-minute answers.”
Donald Trump "is on the precipice of becoming the only major-party presidential candidate this century not to reach out to millions of American voters whose dominant, first or just preferred language is Spanish. Trump has not only failed to buy any Spanish-language television or radio ads, he so far has avoided even offering a translation of his website into Spanish, breaking with two decades of bipartisan tradition."
Bill and Hillary Clinton have purchased the home next door to their primary residence in tony Chappaqua, New York, for $1.16 million. "By purchasing the new home, the Clinton's now own the entire cul-de-sac at the end of the road in the leafy New York suburb. The purchase makes it easier for the United States Secret Service to protect the former president and possible future commander in chief."