MONEY SMART: Is Your Cell Phone Being 'Crammed?'
A new scam called "cramming" allows thieves to bury unnecessary charges in consumers' wireless bills. (KTLA-TV)
It's called 'cramming,' and it's not illegal -- but it's costing millions of Americans more than 2 billion per year in unauthorized charges.
"It's easy to overlook a cramming charge," said Faye Chen Barnouw of the Federal Trade Commission. "If you're not looking at items, you might miss it."
Cramming charges can be buried anywhere in your wireless bill -- items identified as "service fee," "other fees," "voicemail," "calling plan," or other vague terms. They are used to trick consumers into believing they are required to pay.
"Some of the cramming charges are very low -- 99 cents for example -- but if you dont catch it the first time then the crammer knows youre not paying attention," Barnouw said. "Now after a couple of months, they might increase it, maybe the next time $4.99. So before you know it, you might have ended up paying hundreds of dollars in charges that you never authorized."
So who's doing the cramming and how are they getting your wireless number?
Cramming can happen faster than you can hit, "Send." From signing up for extras, like ringtones to filling out online forms with your digits or ignoring texts from unknown numbers.
"Spam texts, its coming from a company and theyre offering something and you ignore it," Barnouw said. "In some instances we found these text messages, theyll actually sign you up for this monthly charge even though you didnt ask for it."
Here's how it works: Wireless companies enter into agreements with third parties called "billing aggregators." The aggregators enter contracts with crammers and your phone number is available for all to abuse.
Florida resident Willoughby Farr was recently indicted for conducting a $34 million cramming scheme from behind bars. He was already in jail for billing customers for services they never used.
Farr continued to run his con from a jail pay phone with the help of a few wireless employees on the outside, according to prosecutors.
But wireless customers can cause interference between themselves and scammers. Here are five tips to combat cramming crooks:
1. Talk to your phone company and tell them, "I want all third party charges blocked." That way, you wont have these charges sneaking up on your bills.
2. Receive a random text message? Use websites like SMSWatchdog.com to learn who is behind the unwanted ad. Customers can use the site to find out whether it's best to ignore or opt-out by replying, "STOP."
3. Monitor your monthly bill even closer than normal. You may want to check your usage online, between billing cycles.
4. If you've signed up for a new online service and don't have to provide a phone number, don't.
5. If you have overpaid in the past, speak up so you can stop the unnecessary fees for good.
"If you find youve been getting unauthorized charges on your phone bill over the course of months and youre just now finding it you should report all of them to your phone company," Barnouw said. "They will generally try to make it right."
Wireless carriers Verizon and ATT&T have banned cramming practices on landline services but there is no rule in place to stop the practice on cell phones.
Last month, a U.S. Senator called for the FCC to crack down on mobile crammers and requested carriers to ban the practice voluntarily. No laws have yet been passed.