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Category Archives: Legislation

Cramming on Wireless Phone Bills: A Review of Consumer Protection Practices and Gaps

News release - Chairman John D. (Jay) Rockefeller, IV, Senate Commerce, Science, and Transportation Committee, August 1, 2014

“Today’s hearing is about a practice known as “cramming,” where consumers get charged on their phone bills for goods and services they never agreed to purchase. The companies that put these bogus charges on phone bills know that consumers don’t always notice small charges when we pay our monthly bills. Some consumers have continued paying these charges for months – or even years – before noticing they were being ripped off. Cramming has been a problem for several decades now – ever since the phone companies opened up their billing platforms to allow third-party vendors to charge consumers for goods and services unrelated to their phone service. For as long as they have been giving outside parties access to their customers’ bills, the major phone companies have assured Congress and the public that they are protecting their customers from this type of billing fraud. But unfortunately we have found that not to be the case. In 2010, this Committee launched a year-long review of cramming on landline phones. And what we discovered was troubling: it turned out that, despite industry’s claims, over a billion dollars of unauthorized charges likely had made their way onto consumers’ phone bills. After the Committee reported publicly on its review, the major phone companies announced they would voluntarily stop allowing third party charges on consumers’ landline phone bills. But those same companies did not make the same promise for their rapidly growing wireless phone business. When we started asking whether cramming was happening on wireless phone bills, AT&T, Sprint, T-Mobile and Verizon told us they were not repeating the mistakes of the past. Industry representatives said that their voluntary policies and practices provide – and I quote – a “robust process designed to protect customers from unscrupulous actors,” and that cramming on wireless phones has been “de minimis.” There is now overwhelming evidence that these statements were just not true – cramming on wireless phones has been widespread and has caused consumers substantial harm. Our review of wireless cramming has focused largely on a wireless phone billing technique known as the premium short code messaging system – or “PSMS” – which involves use of text messages to place charges on consumers’ phone bills. These types of charges often involved products such as ringtones, horoscopes, or celebrity gossip text message updates – and have been the primary focus of the cramming complaints that consumers have made to the FTC, the FCC, and state regulators in recent years. My staff has summarized the findings of the Committee’s review in a report titled “Cramming on Mobile Phone Bills” that I would like to enter into the Committee record. Specifically, this report finds:

• Third-party wireless billing has been a billion dollar industry that has yielded tremendous profits for the four largest wireless carriers, AT&T, Sprint, T-Mobile, and Verizon – their cut was often 30-40 percent of each vendor’s charge;

• Wireless cramming likely cost consumers hundreds of millions of dollars. I would hardly call that a “de minimis” harm;

• The wireless industry was on notice about significant wireless cramming problems by the late 2000’s – yet they let the abuses continue;

• Documents obtained by the Committee include examples of carriers allowing vendors with repeatedly high monthly consumer refund rates – which at times topped 50 percent of monthly revenues – to continue to bill consumers.

• There is also evidence that the carriers placed questionable reliance on middlemen companies known as “billing aggregators” that helped the third parties place charges on consumers’ telephone bills.”

Israel: Background and U.S. Relations

CRS – Israel: Background and U.S. Relations. Jim Zanotti, Specialist in Middle Eastern Affairs. July 22, 2014 “Periodic violence between Palestinian militants in the Gaza Strip—including the Islamist group Hamas—and Israel’s military became a larger conflict on July 6-7, 2014. Israel began a ground operation in Gaza on July 17 with the stated objective of destroying tunnels usedContinue Reading

Survey Assesses How Uninsured Californians Fared After ACA Open Enrollment

“Last summer, just before the first open enrollment period under the Affordable Care Act (ACA), the Kaiser Family Foundation (KFF) conducted a baseline survey of California’s uninsured nonelderly adult population. After the open enrollment period came to a close, we conducted a second survey with the same group of individuals who participated in the baselineContinue Reading

Comparison of House & Senate Versions of the USA FREEDOM Act – CDT

“Today Senator Patrick Leahy introduced a new version of the USA FREEDOM Act. The Center for Democracy & Technology (CDT) supports the Senate version of the USA FREEDOM Act and urges Congress to pass the bill quickly without weakening it. This bill addresses many issues identified by CDT as problematic in the House version of the bill, and includes many key changesContinue Reading

Surveillance Costs: The NSA’s Impact on the Economy, Internet Freedom & Cybersecurity

New America Foundation – “It has been over a year since The Guardian reported the first story on the National Security Agency’s surveillance programs based on the leaks from former NSA contractor Edward Snowden, yet the national conversation remains largely mired in a simplistic debate over the tradeoffs between national security and individual privacy. It is timeContinue Reading

Free Exercise of Religion by Closely Held Corporations – CRS

Free Exercise of Religion by Closely Held Corporations: Implications of Burwell v. Hobby Lobby Stores, Inc. Cynthia Brougher, Legislative Attorney. July 23, 2014 “One of the ongoing controversies related to the Affordable Care Act (ACA) has been the scope of exemption from certain health care coverage requirements, including the contraceptive coverage requirement. Though closely divided, the U.S. Supreme Court’sContinue Reading

“Black Boxes” in Passenger Vehicles: Policy Issues

CRS – “Black Boxes” in Passenger Vehicles: Policy Issues - Bill Canis, Specialist in Industrial Organization and Business; David Randall Peterman, Analyst in Transportation Policy July 21, 2014. “An event data recorder (EDR) is an electronic sensor installed in a motor vehicle that records  certain technical information about a vehicle’s operational performance for a few seconds immediately prior toContinue Reading

Democratic House Staff Report on Fourth Anniversary of Dodd-Frank Act

Follow up to Report: Dodd-Frank Act Does Not End Too Big to Fail But Perpetuates It as Official Policy - today, the Democrat’s interpretation of the same subject – The Fourth Anniversary of the Dodd-Frank Wall Street Reform and Protection Act of 2010, Democratic Staff Report Prepared for Democratic Members of the House Committee on Financial Services - The HonorableContinue Reading

Report: Dodd-Frank Act Does Not End Too Big to Fail But Perpetuates It as Official Policy

“House Financial Services Committee Chairman Jeb Hensarling (R-TX) and Oversight and Investigations Subcommittee Chairman Patrick McHenry (R-NC) today released a committee staff report [prepared by the Republican Staff of the Committee on Financial Services] that concludes the Dodd-Frank Act did not end “too big to fail” as the law’s supporters claim, but actually had theContinue Reading

Loopholes for Circumventing the Constitution: Warrantless Bulk Surveillance on Americans by Collecting Network Traffic Abroad

Arnbak, Axel and Goldberg, Sharon, Loopholes for Circumventing the Constitution: Warrantless Bulk Surveillance on Americans by Collecting Network Traffic Abroad (June 27, 2014). HOTPETS, 2014. Available for download at SSRN: http://ssrn.com/abstract=2460462 “In this multi-disciplinary paper, we reveal interdependent legal and technical loopholes that intelligence agencies of the U.S. government could use to circumvent constitutional and statutoryContinue Reading

New poll on anniversary of Dodd Frank finds majority of Americans identify Wall Street with risk

“On the 4th anniversary of the passage of the Dodd-Frank law and nearly 6 years since the financial collapse of 2008, American voters still distrust Wall Street and big banks and strongly support tough financial regulation of them, according to a new national survey of likely 2014 voters. The result is a strong majority of voters supporting stricter regulations of theContinue Reading

Analysis of Recent Mass Shootings Released by Advocacy Group

“In 2013, Mayors Against Illegal Guns and Moms Demand Action for Gun Sense in America came together to tackle our shared goals. We’ve combined the best minds in policy-making with a grassroots movement of more than 2 million motivated members…Using FBI data and media reports, Everytown for Gun Safety developed an analysis of mass shootingsContinue Reading