Senate study says phone bill ‘cramming’ is costing us millions

A U.S. Senate study, commissioned by the Commerce Committee, has called out mobile networks on the practice of “cramming,” which it says has cost mobile users “hundreds of millions of dollars over the past several years.” Cramming refers to small, sometimes overlooked charges added to your monthly mobile bill, usually originating from third-party companies that sell ringtones, news sent by SMS, horoscopes, and other similar services.

The Senate report accuses networks of “profiting tremendously” from the practice, and described the overcharging as a “voluntary industry oversight,” blaming the Mobile Marketing Association, and the CTIA, for not doing more to close the billing loopholes which allow other companies to add charges to your phone bill. The problem is networks take between 30 and 40 percent of the crammed charges, meaning there is little incentive to crack down.

Several examples related to the scale of the problem are provided in the Senate’s report. In 2012, it says, $191 million worth of crammed charges were placed on mobile bills in California alone, while another carrier reportedly billed $250 million nationwide for crammed services in 2011. This means there’s plenty of money to go round, and despite some strict rules on cramming, the third-party firms are finding evermore inventive ways of getting you to sign up.

Recently, most networks stopped billing for what’s known as a Premium Short Message Service, or PSMS, which can be used for cramming. It involves you agreeing to download a ringtone, or get dating tips by SMS, and thanks to some suspect fine print, these services can often have an ongoing monthly fee attached. However, unscrupulous companies turned to other methods of getting their charges on your bill, and the practice continues. Networks will refund bogus, or unwanted charges if you inform them, but it’s not always easy to identify them on complex bills, particularly those where the monthly amount alters.

Although the Senate report provides some best practice guidelines for the industry, and promises to continue monitoring the situation, it’s probably going to come down to you to stop random charges from bumping up your bill. The FTC recommends you look out for them under headings like miscellaneous, and to be mindful of words like subscription, member fee, or activation. If you see something that doesn’t look right, contact your network and ask for an explanation.

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