Cell phone companies need to get out of cramming

Allowing third-party billing makes companies look complicit in a scam

One good thing about being the victim of a widespread scam estimated to cost American consumers $2 billion a year: You don't feel like the only fool in the country.

And in the matter of "cramming" — when shady text-message companies bill cell phone customers for services they never ordered — there's even less reason to feel a fool's desolation: You weren't duped. You were a victim without knowing it, and without doing a thing.

In fact, some crammers prefer that we neither notice them nor act to stop them.

Melissa Mina is one of many Baltimore Sun readers who responded to my recent column on these third-party billing scams. She's one of 20 million people who are crammed each year in the U.S, according to MSNBC.

When Mina discovered a mysterious $10 charge for a text-message service she never ordered, she called her cell phone company to challenge it.

"AT&T said that some of these [texting] companies call and leave a message on your cell phone, making you some kind of offer," Mina said. "If you don't respond to their call, they are going to assume you want what they're offering and AT&T will start charging you."

Deleting a text message that offers a service — quotes of the day, ring tones, sports trivia, daily horoscope — won't necessarily spare you a charge, either.

"My daughter would get text messages telling her to sign up for a service," said Jeff Zaraya, also an AT&T customer. "She would delete them. She didn't notice the end of the message, telling her that, unless she answered 'no,' she would be signed up automatically. When I saw the bill, I called AT&T right away."

As I reported in last Tuesday's column, I found $300 worth of "monthly access fees" over a 12-month period but didn't realize I'd been crammed until I looked closely at my bills.

"Ghastly project" is how a Verizon customer, Ellen Adajian, described phone bill examination.

"But I did it," she said, "and there it was: A $14.95 charge from Payment One billed on behalf of Doink Media as a MyGlobal monthly service charge. Yikes!"

Adajian discovered that she'd been billed for the same unwanted service the previous month, too.

She called Verizon and spoke to a "could-not-care-less" representative who suggested that Adajian must have ordered the service and, if she wanted a refund, that she would have to call Doink directly.

That attitude might explain why consumers filed a class-action lawsuit against Verizon in California in 2009. As a result, the communications giant agreed to pay customers for allowing third-party charges, but the deal has not yet been approved. According to Reuters, the Federal Trade Commission objected to the settlement last month, calling it inadequate.

"Verizon obtains a beneficial release regardless of whether it pays a penny in claims," the FTC said in a brief. "Those who fraudulently billed consumers walk away with their ill-gotten gains and at least partial immunity from making their victims whole, and the plaintiffs' attorneys receive millions of dollars." A federal judge will resolve the matter later this month.

Ellen Adajian and other Verizon customers might want to look into joining the class action.

Or maybe not.

Adajian got some satisfaction when she placed a second call to Verizon and spoke to another representative. "A great guy," she said, "helped me avoid this kind of thing, like putting a block on all my phones. Then he erased the two Doink charges.

"I also called the Payment One people and a nice-sounding guy just said, 'OK,' when I said, 'Hey, I don't want you guys messing with my phone bill with charges I didn't authorize so take me off your scammy list.' That was that."

Other Sun readers noted the same thing — surprising cooperation when they called to demand refunds.

But Rebecca Ferrell took a suspicious view of that.

She helps some senior citizens with their bills. When she discovered that one of her clients had been charged a "monthly access" fee for a celebrity news service, Ferrell called the third-party vendor directly and got a quick response.

"The third-party customer service person readily agreed to refund the charge and cancel the [text] subscription," Ferrell said. "It seems obvious that they do not want to anger anyone into filing a complaint about these charges and therefore, if contacted, are very willing to refund these 'monthly access' charges."

That might be true. Given the lawsuit against Verizon, plus wider media coverage and scrutiny by the FTC, the FCC and Congress, crammers might have become more inclined to pay small refunds to avoid litigation or more regulation. Same with the cell phone companies that allow them to bill us.

But it would be way better if cell phone companies didn't allow third-party billing to begin with. There oughta be a law. Cell phone companies should block these text messages until their customers say otherwise. Otherwise, it looks like they're complicit in a scam.

dan.rodricks@baltsun.com

 
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