Mobile carriers stop third-party charges in fight against "cramming"

Published On: Dec 24 2013 12:22:08 PM HST   Updated On: Nov 22 2013 11:25:50 AM HST
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The Department of Commerce and Consumer Affairs' Office of Consumer Protection announced Friday a major breakthrough in the fight against mobile cramming -- unauthorized third-party charges that appear on mobile telephone bills.

Bruce B. Kim, the executive director of the Office of Consumer Protection, said that three mobile phone carriers -- AT&T Mobility, Sprint and T-Mobile -- will no longer charge their customers for commercial Premium Short Messaging Services, also known as "PSMS," or "premium text messages." PSMS accounts for the majority of third-party charges on cell phones and for the overwhelming majority of cramming complaints.

"This is a victory for mobile phone users in Hawaii and across the nation," said Kim. "While PSMS has some benefits, like charitable giving, it is also a major contributor to the current mobile cramming problem. The Office of Consumer Protection is very 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. We're hopeful the other carriers will soon follow their lead. There is still much work to be done."

Consumers can guard against mobile cramming with the following helpful tips:
1. Check your monthly wireless phone charges thoroughly and note service you have not ordered or calls you have not made.
2. If you pay a flat rate and it goes up even by a few dollars, take a closer look.
3. There is no one type of cramming charge. Keep an eye out for generic-sounding services and fees like "Minimum Use Fee," "Voice Mail" or "Member Fee."

Hawaii will continue to work with other states for industry reforms and to recover money for local consumers victimized by cramming. Cramming on mobile phones and land lines is estimated to cost American subscribers $2 billion per year.

In May, Vermont Attorney General William Sorrell released a survey showing that 60 percent of third-party charges placed on the mobile phone bills of residents in the area were unauthorized, or "crammed."

Hawaii, along with 44 other states have been engaged in discussions to stop mobile cramming. The discussions have been led by Vermont, Delaware, Florida, Maryland, Oregon, Texas and Washington.

Verizon Wireless says it is also discontinuing charging for PSMS, although it was not part of Friday's announcement.

AT&T, Sprint, and T-Mobile are the second, third and fourth largest providers of mobile telephone services nationwide. Two carriers have confirmed they will continue to allow charitable donations to be billed via PSMS.


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