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 »
"A number of Capitol Hill Democrats have revived proposals to reform or abolish the Electoral College," chief among Michigan's John Conyers, who "held a panel on Capitol Hill Tuesday to discuss options for eliminating the Electoral College and replacing it with a system where a national popular vote elects the president. ... The plan with the most support to reform the election college at the panel was the National Popular Vote Interstate Compact, a proposal first developed in 2001 that would give the national popular vote winner the majority of electoral college votes through an agreement between the states."
House Speaker Paul Ryan has decreed that House members "won’t receive their committee assignments until January — after they cast a public vote on the House floor for speaker. "The move has sparked behind-the-scenes grumbling from a handful of Ryan critics, who say the delay allows him and the Speaker-aligned Steering Committee to dole out committee assignments based on political loyalty rather than merit or expertise." The roll call to elect the speaker is set for Jan. 3, the first vote of the new Congress.
House Majority Leader Kevin McCarthy told reporters on Monday that the government funding bill will be released on Tuesday. The bill is the last piece of legislation Congress needs to pass before leaving for the year and is expected to fund the government through the spring. The exact time date the bill would fund the government through is unclear, though it is expected to be in April or May.
As has been rumored for a week, Donald Trump will nominate Ben Carson, his former rival, to lead the Department of Housing and Urban Development. In a statement, Trump said, "We have talked at length about my urban renewal agenda and our message of economic revival, very much including our inner cities. Ben shares my optimism about the future of our country and is part of ensuring that this is a Presidency representing all Americans. He is a tough competitor and never gives up."