Cramming: Are you a victim of unauthorized charges to your phone bill? Take a hard look.

When Barbara Grathwohl of Riverhead took a careful look at her mobile phone bill, she got quite a surprise: almost $30 a month in three charges to companies she’d never heard of. It took her a while to get to the bottom of what she was paying for and why.

What she found out outraged her: Three different companies were each charging just under $10 a month on husband’s mobile line because her husband didn’t return their unsolicited text messages.

If you don’t text back “no” or “stop” when you get one of these text messages, you start getting charged for something you didn’t request, Grathwohl said.

It’s called “cramming” and it’s an increasingly widespread practice, according to the Federal Communications Commission, which regulates telephone service providers. A Senate commerce committee study last year found the practice may cost consumers up to $2 billion a year.

It’s unjust and unreasonable, according to the FCC, which is considering new rules that would place restrictions on the practice and also require carrier billing to more clearly identify what the “mystery” charges are for.

The Federal Trade Commission last week told the FCC “some basic consumer protections are needed.”

The agency has had thousands of complaints about unauthorized third-party charges on wireless bills, but said “the number of reported complaints undoubtedly understates the full extent of wireless cramming by a substantial amount.”

Nevertheless, the FTC stopped short of recommending a default ban on such charges, as it did last year for similar practices on land lines, because there are “legitimate” mobile phone payments made by users. In contrast, landline third-party billing, the FTC said, was “used almost exclusively by scam artists.”

Right now, it’s up to consumers to protect themselves, something North Fork legislator Dan Losquadro is campaigning hard to let constituents know.

Losquadro fell victim to a cramming scheme himself, he said.

“I was taken completely by surprise that a third-party provider was able to put a charge on my bill,” Losquadro said in a phone interview.

The assemblyman wants people to know they can block these charges up front.

“This should be the mandatory default setting,” Losquadro said, “but in the absence of that, I can’t stress enough that every mobile phone user should call their provider and request a purchase block. I want wireless companies to be absolutely flooded with people calling to request a purchase block,” Losquadro said. “It’s not complicated. Dial 611 from your cell phone to get your service provider and speak to a customer service rep. Tell them you want a purchase block on your line.”

The assemblyman said he was able to get the third-party charges billed to his mobile account refunded by his carrier, AT&T.

Grathwohl said she wasn’t completely successful in her quest for a refund. Her carrier, T-Mobile, would only refund two of the nine months’ worth of charges she had unwittingly incurred — and paid. “They said that was their protocol,” Grathwohl said.

Losquadro said mobile phone service providers allow these third-party charges because they get a cut of the action. “It seems pretty clear why this is going on,” he said. “The service provider charges the third party a service fee for billing on their bill. It can be as high as 30 percent,” he said. “They’re making an awful lot of money for really doing nothing.” 

He called for stepped-up regulation of the practice, which he said was a “federal issue.”

“Cramming is a menace that has plagued land line consumers for years and is now harming millions of cell phone users around the country,” said Oliver Longwell, a spokesman for Rep. Tim Bishop.

“The best way to fight back against this illegal scam is to closely scrutinize your bill each month and immediately report suspected cramming charges to your service provider and the Federal Trade Commission. Also, beware of replying to text messages advertizing free items or a chance to win a prize: remember the old adage that if it sounds too good to be true it’s most likely a scam.”  Bishop supports the ongoing efforts to strengthen federal anti-cramming legislation and step up enforcement at the Federal Trade Commission and Federal Communications Commission, Longwell said.

How does cramming work?

According to the FCC, in a typical cramming case, the cramming company and billing aggregator need only an active telephone number for the targeted consumer, which can be obtained from a telephone directory, to place unauthorized charges on the consumer’s telephone bill. Pursuant to a contract between them, the billing aggregator supplies the carrier with the consumer’s telephone number and the amount to be charged, and requests that the charge be placed on the consumer’s telephone bill. The billing aggregator generally does not need the consumer’s name or address for the cram to take place. Proof of consumer authorization is not generally provided to or required by the carrier. The carrier may not require the aggregator to clearly identify the good, product, or service for which the consumer is being charged. The process works similarly if the vendor contracts directly with the carrier rather than using an intermediary billing aggregator.

If the consumer pays the crammed charge, the carrier remits the payment to the aggregator or to the vendor, depending upon whether an aggregator is involved. In addition, the vendor compensates the billing aggregator and the carrier for their services. The carrier is compensated by the vendor or the billing aggregator for the billing-and-collection service it has provided. The billing aggregator is compensated by the vendor to manage transactions with the carrier. The carrier also may receive additional compensation from the billing aggregator or vendor for each consumer complaint or inquiry it handles regarding the crammed charge. Similarly, the billing aggregator may be compensated by the vendor for handling interactions with the consumer regarding the crammed charge.

What can you do?

If you’ve been crammed, with charges related to telephone service between states or internationally, you can file your complaint with the FCC. There is no charge for filing a complaint. You can file a complaint using an FCC online complaint form found at www.fcc.gov/complaints. You can also file your complaint with the FCC’s Consumer Center by calling 1-888-CALL-FCC (1-888-225-5322) voice or 1-888-TELL-FCC (1-888-835-5322) TTY; faxing 1-866-418-0232;

For charges on your telephone bill for non-telephone services, file your complaint with the Federal Trade Commission (FTC). You can file a complaint with the FTC online at . You can also submit a complaint by calling the FTC toll-free at 1-877-382-4357 (voice) or 1-866-653-4261 (TTY), or writing to: Federal Trade Commission CRC-240 600 Pennsylvania Ave., NW Washington, DC 20580.

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