Sen. Commerce Cramming Report Slams Billing Practices

Says unauthorized third-party charges cost consumers hundreds of millions
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Senator Jay Rockefeller (D-W.Va.) released a majority staff report Wednesday (July 30) on wireless phone billing practices that concluded consumers have been hit with hundreds of millions of unauthorized charges.

That came in advance of a hearing Wednesday on wireless phone bill "cramming" entitled "Cramming on Wireless Phone Bills: A Review of Consumer Protection Practices and Gaps.” The study finding means the "gaps" would likely be a major focus of the hearing.

Rockefeller launched the wireless cramming inquiry after a 2010-2011 investigation into landline bills found cramming to be widespread.

“For as long as they have been giving outside parties access to their customers’ bills, the major phone companies have assured Congress and the public that they are protecting their customers from billing fraud. Industry representatives told us that their voluntary policies and practices provide consumers – and I quote – a ‘robust process designed to protect customers from unscrupulous actors,’ and that cramming on wireless phones has been ‘de minimis.’ But this report makes it clear that is not the case. Cramming on wireless phones has been widespread and has caused consumers substantial harm," Rockefeller said in releasing the report.

Key findings include that 1) third-party billing is a billion-dollar industry that has made lots of money for the major wireless carriers, who keep 30%-40% of the charges they allow third parties to put on bills, 2) cramming is widespread despite protestations to the contrary by wireless carriers, that there are still "wide open gaps" in consumer protection, and that carrier reliance on monitoring of vendors by billing aggregators was questionable.

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