AT&T, Sprint, T-Mobile, Verizon Crack Down on 'Cramming'

Vermont's attorney general is making strides against cramming—unauthorized charges to phone bills that cost Americans $2 billion a year.

AT&T, Sprint and T-Mobile are working with legislators to crack down on mobile "cramming," the practice of unauthorized third-party companies making charges to consumers' mobile phone bills.

Forty-five states, led by Vermont, have been in discussions to stop the practice, Vermont Attorney General William H. Sorrell said in a Nov. 21 statement, announcing that AT&T, Sprint and T-Mobile have agreed to not charge customers for commercial Premium Short Message Services—also known as PSMS or premium text messages.

"This is a victory for cell phone users in Vermont and across the nation," said Sorrell.

"While PSMS has some benefits, like charitable giving, it is also a major contributor to the current mobile cramming problem. We are pleased that AT&T, Sprint and T-Mobile have decided to stop the flow of money from the pockets of ordinary people to the bank accounts of scam artists," Sorrell continued.

He added that his office will continue to work to get more carriers on board with the plan and to help consumers victimized by the practice recover their money.

Cramming costs Americans $2 billion per year, according to a study by the Center for Rural Studies at the University of Vermont.

Sorrell's statement added that two carriers have confirmed that they'll continue to allow charitable donations to be billed via PSMS.

While Verizon wasn't part of the Vermont announcement, it is also discontinuing the practice of charging for premium SMS.

"While we don't agree with all of the Attorney General's allegations, we respect his efforts in this area," William B. Petersen, general counsel for Verizon Wireless, said in a statement. "For years, Verizon has been vigilant in protecting our customers from bad actors."

Petersen added that Verizon is already in the process of "winding down" its premium messaging business, though it will continue to support text-to-donate for charitable programs and text-to-contribute for political campaigns.

Beware the Mobile Cramming

The Federal Trade Commission has warned consumers to carefully look over their phone bills each month, and to take note if their monthly charge varies.

"Cramming happens when a company adds a charge to your phone bill for a service you didn't order, agree to or use," says the FTC on its site. "Cramming charges can be small, say $2 or $3, and easy to overlook. But even when the phony charges aren't small, they may sound like fees you do owe. That makes them tough to pick out, especially if your phone bill varies month to month."

Cramming charges can also appear under generic-sounding titles, such as "Member Fee" or "Web Hosting," says the FTC—titles that are easy to shrug off.

The FTC's advice about how to proceed, if you suspect you're a victim of cramming, may be part of the problem. It advises contacting one's phone company, which will explain how to dispute errors to the bill. Then, says the FTC, "It's a good idea to follow-up with an email or letter sent by certified mail; ask for a return receipt. It's proof that the company received your letter."

Finally, it adds, even if you get a refund, a good final step is to file a complaint with the FTC.

Given the likelihood that anyone will go to so much trouble over a $2 charge, it's no wonder that $2 billion a year could slip by on subscribers' bills uncontested.

An AT&T spokesperson told eWEEK that should any suspect charges appear on a bill, "AT&T has a generous refund policy for third-party content purchases and a customer can request a credit for unauthorized charges by going online or by calling an AT&T customer service representative."