January 7, 2014

Cramming Doesn’t Just Happen in Schools

The December 19, 2013 edition of Stateline describes recent state efforts to combat cramming (consumers being charged for telecommunications services they did not order). As many as 20 million people are crammed each year, but the Federal Communications Commission estimates that only about 5% of affected consumers realize it. Cellphone and landline cramming could cost consumers up to $2 billion annually. The report notes that in Vermont, 12,500 households and businesses are receiving refunds (totaling more than $900,000) for illegitimate charges on their landline phone bills. 

According to the article, in the case of cellphones:

cramming often begins when a consumer receives a text message with an offer to enter a contest. By replying, the consumer unknowingly signs up for a . . . service that provides the latest weather, traffic, news, sports or celebrity gossip. The charge for this “service” ends up on the consumer’s cellphone bill, often labeled as a “premium text message.”

In November 2013, the Texas Attorney General filed a lawsuit against four content providers behind a cramming scam, as well as a company that handled billing for cellphone carriers. Two weeks after Texas filed its lawsuit, “three major wireless carriers — AT&T Mobility, Sprint and T-Mobile — said they would no longer charge their customers for commercial ‘premium text messages,’ which account for the overwhelming majority of cramming complaints.”