Consider the cramifications
How would you like to listen in when federal agencies talk to each other about policies that could have an impact on your company? If your business is breaking into the mobile marketplace, lend an ear.
The current topic of conversation between the FTC and the Federal Communications Commission: billing — and especially cramming, the pernicious practice of unauthorized charges on people’s phone bills. The legal issue isn’t new. Cramming has been a problem since Alexander Graham Bell got dinged for a mysterious ha’penny charge when he rang Mr. Watson to say “Come here. I need you.”
In recent years, the FTC has brought more than 25 cramming cases, winning millions back for consumers. In 2011, the agency hosted a national workshop to discuss additional fronts in the fight against cramming. What’s hot now: a pending civil contempt action against the nation’s largest third-party billing aggregator, asking for $52 million in refunds for consumers the FTC says were victims of cramming.
Based on that experience, the FTC filed a comment with the FCC last year recommending that the FCC implement rules banning or requiring default blocking of some or all third-party billing on landline phone bills. But as business has moved to the mobile marketplace, crammers have followed. You may have spotted them on your own cell phone bill in the form of charges for games or horoscope services you didn’t buy.
That’s why the FTC has filed an additional comment with our colleagues across the Mall. You’ll want to read the 13-page document — it’s short and to the point — but here’s the meat and potatoes of what the FTC said to the FCC:
At a minimum, all wireless providers should offer their customers the ability to block all third-party charges. Wireless providers should clearly and prominently inform their customers that third party charges may be placed on the consumers’ accounts and explain how to block such charges at the time accounts are established and when they are renewed. And wireless providers should provide a clear and consistent process for customers to dispute suspicious charges placed on their accounts and obtain reimbursement. The FTC believes that such measures should be mandated by law or regulation to ensure that consumers have baseline protections.
What about a flat-out ban or default blocking like what the FTC suggested last year for landlines? According to the comment, that would be premature, given the potential for legitimate uses of the technology in the mobile context. But the FTC thinks people should have the right to block those charges on their phones and believes this sector warrants “watch what happening” scrutiny to make sure consumers’ interests are protected.
Looking for more information about FTC cases challenging unauthorized charges? Visit the BCP Business Center's new Payments and Billing page.