CTIA, Consumer Groups Disagree on Size of Problem Posed by Wireless Cramming
Voluntary industry efforts aren’t enough to protect consumers against cramming and the FCC needs to step in and regulate, a coalition of consumers groups told the commission in comments posted Tuesday on the FCC’s website. CTIA disagreed sharply with that argument. The FCC’s exploration of cramming rules for wireless carriers marks another area where the commission under new Chairman Tom Wheeler will have to weigh regulation versus voluntary action by carriers, industry officials say.
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Wireless cramming fraud costs U.S. consumers as much as $887 million annually, said the Center for Media Justice, Citizens Utility Board, Consumer Action, Consumer Federation of America, National Consumer Law Center, National Consumers League and Virginia Citizens Consumer Council. All indications are that wireless cramming is on the rise, the groups said (http://bit.ly/17lDPsK). “Anecdotal evidence suggests that wireless cramming fraud is extremely lucrative for its perpetrators,” they said. “For example, in its complaint against Wise Media, the FTC alleges that the company made ‘millions of dollars’ through its mobile cramming scam.”
Voluntary approaches to curbing cramming problems haven’t done enough, in part because they rely on consumers spotting and reporting suspicious charges on their bills, the consumer groups said. The consumer groups recommend that the FCC require all wireless carriers to implement the Mobile Marketing Association’s Best Practices guidelines requiring a double opt-in from consumers before they are billed. The FCC could also require carriers “to be solely responsible for investigating consumer cramming complaints (as opposed to referring complaints to billing aggregators or third-party service providers)” and prohibit carriers from cutting off consumers if they refuse to pay a third-party charge that a subscriber disputes as fraudulent.
Consumers Union urged the FCC to provide wireless consumers the same protections already in place for wireline customers. “The foremost unaddressed concern at this time is the need for additional protections for wireless consumers against unauthorized third-party charges,” CU said (http://bit.ly/1aPtQZN). “We were pleased that the Commission moved forward to address cramming on landline phones last year, but we believe that more proactive measures are necessary on the part of the FCC, as well as the FTC, in order to prevent these unauthorized charges from ending up on consumers’ wireless bills."
CTIA questioned whether wireless cramming is a major problem for consumers. “Between 2008 and 2011, just 0.000156 percent of wireless consumers complained about wireless cramming, a ratio of one complaint per 641,532 wireless subscriber units per year,” CTIA said (http://bit.ly/17lJcYX). Voluntary efforts are working well and the FCC does not need to impose additional regulations, the wireless association said. CTIA, MMA and individual carriers “have established best practices to help ensure that direct carrier billing remains a convenient, trusted service,” the group said. “CTIA’s Mobile Commerce Compliance Handbook has established a unified standard of compliance for mobile carrier billing that requires double opt in, purchase confirmation, and clearly presented pricing, billing frequency, contact, privacy, and product information.” In addition, CTIA said, “when cramming does occur, existing state and federal enforcement mechanisms are already in place to punish bad actors.”