FOR IMMEDIATE RELEASE: April 2, 2012

SCHUMER CALLS ON FCC TO BAN UNSOLICTED THIRD PARTY CRAMMING CHARGES ON CELL PHONES; SCAMMERS PUTTING SERVICES LIKE JOKE OF THE DAY, UPDATED SPORTS SCORES ON PHONES WITHOUT CONSUMERS’ CONSENT AND BILLING THEM FOR IT



Verizon, AT&T Recently Agreed to Block Unsolicited Third Party Charges on Landlines, But No Such Restrictions Exist for Cell Phones; Schumer Calls on FCC to Mandate that Customers Cannot Be Charged Fees By Third Parties Unless They Give Their Explicit Consent and Urges Wireless Companies to Voluntarily Block Charges for Cell Phones

“Cramming” Scams Are Spreading Like Wildfire in NY & Around the Country; Scammers Charge Consumers’ Cell Phone Bills for Phony Services via Confusing Text Messages That Result in Unauthorized Fees on Monthly Bills

Schumer: Cell Phones Shouldn’t Be Used As Personal Piggy Banks for Third Party Scammers

 

U.S. Senator Charles E. Schumer today called on the Federal Communications Commission to mandate that consumers cannot be charged third party fees by so-called “crammers” unless they give their explicit consent directly to their cell phone carriers; he also urged wireless carriers to voluntarily ban the practice.

 

Schumer’s call comes in the wake of numerous reports of so-called “cramming” scams where scammers send consumers confusing text messages offering phony services that result in unauthorized fees on monthly bills. While Verizon and AT&T just recently announced their plans to block third party charges on telephone landlines without customer pre-approval, carriers have not extended this change to wireless customers. Schumer is urging carriers to voluntarily agree to block third party cramming charges in the interim while he works to see the FCC puts in place mandatory restrictions.

 

“Cell phone cramming is merely scamming by another name – it steals money from cell phone users and the FCC and carriers must take prompt action to snuff it out,” said Schumer. “Cell phone bills nowadays can be dozens of pages long and if you don’t pay close attention, buried in your bill somewhere could be a $10 charge you never authorized or mistakenly agreed to by replying to an unsolicited text message. The simple truth is that no one should be able to put a charge on your cell phone bill unless you have given explicit, affirmative consent, and unfortunately it’s becoming more and more common that the charges appear fist and then consumers have to dispute them later. Both Verizon and AT&T have taken positive steps to end the practice on landlines, but we must ensure the same protocol for wireless customers.”

According to recent reports, over the past several years, New Yorkers and Americans across the country have been unknowingly charged up to ten dollars a month for text messages that contain unwanted offers or services. Companies send these text messages to wireless customers without approval, automatically charging their bills. Most of the time, the consumer has no idea that this otherwise innocuous text message will later show up on the bill. When the charges do show up, they are often labeled as "service fee," "other fees," "voicemail," "calling plan" or some other vague term for which the consumer is tricked into believing that they are required to pay.

 

One New York constituent recently received text messages with random information, like “Flamingos are pink because they eat shrimp,” and then a text message that stated to end these messages reply “STOP”.  The Constituent didn’t reply out of fear that it would encourage more spam – but against his wishes, he got an itemization on his bill for $9.99 for “Ringtone” – a service he didn’t ask for and didn’t want. Even if a consumer catches the hidden, unwanted charge, they must go through an onerous process to remove it.

 

Senator Jay Rockefeller of West Virginia has been at the forefront of efforts to tackle this growing problem and has held multiple hearings on Capitol Hill to crack down on the practice. Most recently, Rockefeller successfully pressured Verizon and AT&T change their third party billing policies to block cramming fees from appearing on landlines and plans to introduce legislation to make the practice illegal.

 

While Verizon and AT&T have announced a well-received voluntary plan to restrict third party billing on landlines, no such plan has been announced for wireless services. In a letter to CTIA, the International Association for the Wireless Telecommunications Industry, Schumer is urging carriers to institute voluntary bans and to work with the FCC to put in place mandatory restrictions on third-party billing to protect consumers from unsolicited and unwanted fees on their cell phone bills.

 

Schumer specifically wants the FCC to require wireless carriers to get affirmative consent from consumers for any third-party charge before it winds up on a bill and called on the other major carriers to adopt a ban in the meantime to prevent customers from receiving these unwanted charges.  Schumer argued that the cell phone wireless companies, which allow these crammers to operate, must take responsibility to prevent this practice from occurring because cramming is simply unfair to consumers who neither requested nor approved such a charge.

 

Schumer’s effort to restrict third-party billing from personal cell phones is part of his broader efforts to ensure transparency and consumer consent in the rapidly expanding telecommunications and technology industries. Over the last year, Schumer has worked to protect consumers from having personal cell phones tracked by retailers, has been working to see personal password information for social media sites protected from employers, and has been leading an effort to protect cell customers from having personal data like address books or photos stolen by third party applications on smart phones. 

 

A copy of Schumer's letters can be found below:

 

Dear Chairman Genachowski,

 

I write today to commend your efforts along with the rest of the Federal Communications Commission to prevent companies from cramming telephone consumers; however, I believe that more work must be done to ensure Americans are not forced to pay these outrageous charges on their wireless bills.

 

Over the past several years, New Yorkers have been unknowingly charged up to ten dollars a month for text messages that contain unwanted offers or services. Companies send these text messages to consumers without approval. Much of the time, the consumer has no idea that this otherwise innocuous text message will later show up on the bill. These charges may be labeled a "service fee," "other fees," "voicemail," "calling plan" or some other vague term for which the consumer is tricked into believing that they are required to pay.

 

While this practice is most likely already illegal, consumers are forced to go through an onerous process to remove the charge. I believe that cell phone wireless companies, which allow these crammers to operate, must take more responsibility to prevent this practice from occurring.  Cramming is simply unfair to consumers who did not request nor approve such a charge.

 

The FCC has taken the lead by proposing rules that would help to prevent the problem of cramming. However, I would ask that you expand your rulemaking to encompass a mandatory ban on these charges unless a consumer specifically opts in. Verizon and AT&T have already announced their intentions to create such a rule for their landline customers, and I strongly believe that all other companies should follow Verizon and AT&T’s lead and these changes should be extended to wireless customers. If companies do not make these changes voluntarily, the FCC should look towards imposing this as a rule on wireless companies. I ask that you work with my staff to ensure the FCC has the authority in place, possibly through new legislation, to ensure consumers are not deceptively charged.

 

I thank you for your attention to this important matter, and look forward to working with you to assist you in protecting American consumers from unfair and deceptive practices.

 

Sincerely,

 

Charles E. Schumer

United States Senator 

 

Dear CTIA,

 

I write today to request that your members work with the Federal Communications Commission to require that both landline and wireless telephone services require opt-in protocols for any third-party charges on consumers’ monthly bills. While Verizon and AT&T have taken productive steps towards preventing these charges on their landline customer’s bills, many of your members have yet to extend this protection to their wireless customers. Some customers may want to receive these third-party services, but carriers should require their specific consent before placing concealed charges on their monthly bills.

 

Over the past several years, New Yorkers have been unknowingly charged up to ten dollars a month for text messages that contain unwanted offers or services. Companies send these text messages to consumer without approval. Much of the time, the consumer has no idea that this otherwise innocuous text message will later show up on the bill. These charges may be labeled a "service fee," "other fees," "voicemail," "calling plan" or some other vague term for which the consumer is tricked into believing that they are required to pay.

 

While this practice is often already illegal, consumers are forced to go through an onerous process to remove the charge. I believe that your members, which allow these crammers to operate, must take more responsibility to prevent this practice from occurring.  Cramming is simply unfair to consumers who did not request nor approve such a charge.

 

The FCC has taken the lead by proposing rules that would help to prevent the problem of cramming. However, I would ask that you work to ensure your members voluntarily adopt a ban on these charges unless a consumer specifically opts in. Verizon and AT&T have already announced their intentions to create such a rule for their landline customers, and I strongly believe that all other companies should follow Verizon and AT&T’s lead and that these changes should be extended to wireless customers. If companies do not make these changes voluntarily, I have requested the FCC to study imposing such a rule on wireless companies. I ask that you work with my staff and the FCC to ensure that there is transparency on your customers’ bills. 

 

I thank you for your attention to this important matter, and look forward to working with you to assist you in protecting American consumers from unfair and deceptive practices.

 

Sincerely,

 

Charles E. Schumer

United States Senator 

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