3rd Party Wireless Charges Attract Attention of the FTC

As most telecom managers know, third party charges on invoices, known as “cramming”, have historically been a major problem.  Now that problem is rapidly infecting wireless environments and the federal government is taking notice. The Federal Trade Commission (FTC) recently announced it is pursuing its first wireless cramming case.

As background, third party charges are when a company adds a fee to a bill for some type of “service”.  In wireless devices, it is generally for content delivered via text message, and can be anything from sports scores to horoscopes to dating tips and more.   The user is billed monthly for this service, which they may or may not have wanted, and can find difficult to stop.   The fee is often listed on the bill with confusing acronyms or names, making it hard to spot, and meaning it often goes unnoticed for months.

The pending lawsuit brought by the FTC accuses just such a content provider of tacking $9.99 monthly fees onto customer bills, usually without consent, and for not honoring requests to end the service.  The suit bears watching closely as this is a large problem, the scope of which is highlighted by some data released by the California Public Utilities Commission.

Wireless providers in California returned an average of more than $2 million a month last year to consumers who complained about unauthorized wireless text charges.  But refunds were requested on only about 12 percent of the total monthly charges for premium text services.  That leaves a lot of money on the table, and it isn’t known if those were actual authorized charges, or the users just haven’t noticed yet.

So if your wireless environment includes phones with texting plans, it might be time to verify none of those third party fees are showing upon YOUR bills.