Ever heard of cramming? It’s the act of adding various unauthorized fees onto a mobile phone bill for third-party services of dubious quality and/or necessity–and even if you haven’t heard of it, you might be paying for it.
The Senate Commerce Committee recently undertook a year-long investigation of the practice, and the results would be laughable if they weren’t so obviously nefarious. In one example published in the official investigative report, an investigator signed up for a dubious “casual online gaming” service for $14.95 per month–a service which had made more than a million dollars from enrolled customers, but seemed be barely used, if at all. The first hint: A message of “No scores logged yet!” on the high-score screen despite 20,000 registered users. When the investigator poked around in the game for a short time, his paltry use of the service launched him as the top scorer for the game–a game, it should be mentioned, that he quickly realized could be played for free at different site.
The practice is clear fraud in many cases. According to Ars Technica:
The scams are legion, even when billing aggregators require “voice verification” to root out fraud. [Some] crammers told customers that they were calling about “updating” a Yellow Pages listing; many of those who responded seemed to believe they were correcting typos, updating business hours, etc., not buying any new service. But, when the third-party verifier joined the call and the person said “yes” in answer to some question about the listing, they were verified as a sale and billing began.
The same scenario–users being charged for, but never using, unauthorized third-party services–plays out across a number of categories, from gaming to fax and voicemail services to data back-up functionality. The scam is so blatant in some cases that investigators found a number of company “presidents” to be mere fronts, with no actual knowledge of the businesses they were supposedly running. And these were not isolated incidents, but scenarios discovered repeatedly during the investigation.
The fact that scammers don’t mind profiting from unnoticed third-party charges should come as no surprise; the report goes on to say, though, that while legit providers like Verizon and AT&T can drop third-party vendors at any time, and many of these “services” result in heaps of complaints to said legitimate operators, the mobile phone companies continue with business as usual because they, too benefit from the scams, charging third-party services a dollar or more for each customer to the tune of $10 billion over the last decade. The investigation even turned up emails from employees of major mobile providers who felt pressure not to cut off dubious third-party service providers, as they were an important source of revenue.
The result of the investigation? Senate hearings, an FCC crackdown on cramming campaign, and more onus on the phone companies to regulate the billers they allow on their systems. Bottom line, though: These scams rely on businesses and individuals who don’t scrutinize their own bills for unauthorized charges, so keep a close eye on your monthlies.
Read more at Ars Technica.
