News release: “In a report issued today, the Federal Trade Commission staff recommends steps that mobile carriers and other companies should take to prevent consumers from being stuck with unauthorized charges on their mobile phone bills, an unlawful practice known as mobile cramming. The report focuses on the multi-billion dollar business known as carrier billing, which refers to the placement of charges for goods and services of third-party merchants on a mobile phone bill. “Mobile Cramming: An FTC Staff Report” includes five recommendations aimed at mobile carriers, merchants who offer goods and services charged directly to mobile phone bills, and billing intermediaries known as aggregators who facilitate the placement of such charges on mobile phone bills…While the report notes that mobile bills can include legitimate add-on third-party charges such as charitable contributions, others may be crammed onto consumers’ bills by scammers. The report notes that while the full scope of mobile cramming is not known, just three cases brought last year by the Commission against mobile crammers led to more than $160 million in judgments. One participant in the FTC’s roundtable on mobile cramming participant called it “almost the perfect scam.” Based on findings from the Commission’s 2013 mobile cramming roundtable and other public evidence, the report follows a number of enforcement actions brought by the Commission in in the last year against mobile cramming. Specifically, the report calls for:
- Giving consumers the right to block third-party charges.
- Ensuring that advertising, marketing, and opt-in processes for charges are not deceptive.
- Getting express, informed consent before charging consumers.
- Clearly displaying third-party charges on bills.
- Creating an effective process for resolving disputes.”