FTC wants stronger protections against mobile cramming

Nearly everyone with a smartphone has been 'crammed,' including those who haven't noticed yet. What's cramming? It has nothing to do with being squeezed into a crowded subway car or bus, it's the odious practice of slapping consumers with unauthorized third-party charges on their mobile phone bill. Mobile cramming for short.

The Federal Trade Commission says it's time to do something about it and today issued a report outlining five steps carriers -- and others -- should take to prevent consumers from being crammed.

The 'others' are the third parties -- the merchants who offer goods and services that are charged directly to mobile phone bills, and the billing intermediaries known as aggregators who provide the backroom functions that get the charges onto mobile phone bills.

'Mobile cramming is an issue that has affected millions of consumers, sticking them with charges they did not authorize, and the FTC has worked hard to combat it,' said Jessica Rich, the Director of the FTC's Bureau of Consumer Protection. 'The best practices recommended in our report build on the FTC's active enforcement in this area and would give consumers needed protections to rein in the problems we have seen.'

Some are legitimate

While the report concedes that some third-party charges may be legitimate, many are not. It cites three cases brought last year by the FTC that 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.'

The commission report calls for:

Giving consumers the right to block third-party charges. FTC staff calls on mobile phone carriers to give consumers the right to block third-party charges on their mobile bills altogether, and to inform consumers clearly and prominently of that right. Ensuring that advertising, marketing, and opt-in processes for charges are not deceptive. Consumers should know how much and how often they will be charged. Mobile carriers should closely monitor the merchants placing charges through their bills to scrutinize whether they are risky or suspicious, and if so, take steps to prevent them from placing charges. Getting express, informed consent before charging consumers. Carriers should closely monitor refund rates, consumer complaints and other signs of possible cramming and take action where necessary. Clearly displaying third-party charges on bills. Mobile bills should clearly and conspicuously show third-party charges. Carriers should consider steps to make third-party charges more prominent, such as separate billing lines for third-party charges that make it clear to consumers which charges are directly from a carrier and which are from a third party. Creating an effective process for resolving disputes. Finally, mobile carriers should put in place an effective dispute resolution process that gives clear information to consumers about how to dispute suspicious charges and seek refunds for unauthorized charges.

Lokasi:

Share :