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Why Aren't Big Carriers Being Held Responsible For Cramming?
FTC Targets Another Small Fish, Ignores Those Making It Possible
by Karl Bode 03:22PM Wednesday Apr 17 2013
The FTC this week announced that the agency has filed suit against a company named Wise Media for "cramming," or charging users $10 a month for inane services many users never asked for. Wise Media has already been the target of a class action lawsuit (pdf) for such "services." Amazingly, this is the FTC's very first case against a crammer -- ever.

According to the FTC complaint (pdf), Wise Media's Brian Buckley and Winston Deloney signed consumers all over the nation up for $10 a month "premium services" that sent text messages containing horoscopes, "flirting," (whatever that entails) and love tips. The company then obfuscated what the charges were on consumer bills, ignored user requests to be removed, and dodged attempts to be contacted or identified.

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It's all fairly standard operating procedure for crammers, and we've seen it time, and time, and time again.

"The concept of 'cramming' charges on to phone bills is a not a new one,” said FTC Chairwoman Edith Ramirez. “As more and more consumers move to mobile phones, scammers have adapted to this new technology, and the Commission will continue its efforts to protect consumers from their unlawful practices.”

While the government and attorneys general enjoys crushing easy, small cramming targets, they usually don't hold larger carriers accountable for their involvement in helping to facilitate cramming. As we've seen with the lack of prosecution for banking fraud, the government doesn't want the added expense and legal difficulty of fighting more competent targets, when smaller fish net them easy political points.

Yet in some cases, a company like Verizon, AT&T, Sprint or T-Mobile can net 30% or more of the cramming proceeds, greatly reducing their incentive to stop these predatory operations. AT&T in fact was asked about Wise Media in a New York Times story from last year. Initially the company tried to claim they didn't profit from the Wise Media's cramming, but when pushed for clarification, stated they couldn't comment:
quote:
Why does AT&T allow Wise Media to show up on its bills? Is it because AT&T is taking a cut of the revenue generated by Wise Media?

Nope, said (the AT&T spokesperson).

Really, asked the Haggler?

Really, said (the AT&T spokesperson).

Could you double-check that, (we asked)?

She could, she said.

The next day she sent this e-mail, also quoted in its entirety:

"AT&T has no further comment at this time."
Carriers have also been the target of numerous class action lawsuits for their involvements in these predatory schemes over the years, none of which have really deterred them from helping crammers screw their customers. Last year AT&T and Verizon stated they'd finally ban cramming -- but only on landline networks -- now that everyone is leaving them in droves.

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Androidian

join:2012-12-14
Purcellville, VA
Reviews:
·Comcast

Why not start using a similar concept for "good"?

This whole thing gave rise to an interesting thought and question. I'm sure that there's something which would prevent this, otherwise someone would have surely done it by now... Here goes...

Would there be anything stopping someone from, say, ordering a 1-900 or 1-976 type line that charges by the minute, and placing a high ($25-$50) per-minute charge to callers on that line? If not, one could have fun with a VOIP phone line from the right provider.

Open an account with a VOIP provider that permits you to forward incoming calls based upon various patterns and strings. Hand that number out for use by telemarketers, banks, credit card companies, etc. Once they've called you, you have their number; set your VOIP line to automatically forward their subsequent calls to your 1-900 line. Since it would be their caller ID information going to the 1-900 line, I assume that the bill would also likely come back them to pay.

Would the above be possible? While not exactly the same as what's being done in the article, it is loosely related to it in concept and fiendishness.
--
A sane approach to our federal budget: NO tax increases / 15% cuts across-the-board / defunding of all ObamaCare-enacted programs.

mackey
Premium
join:2007-08-20
kudos:12

Re: Why not start using a similar concept for "good"?

Nope, won't work. The owner of the VoIP line will get billed, just as they get billed for the minutes used when call forwarding normally.

Also, Caller ID info is not used for billing; ANI is. Presumably a VoIP provider which does not send the correct ANI has some other way of matching calls with user IDs.

/M
BiggA

join:2005-11-23
EARTH

Carrier billing from calls or SMS should be illegal

Except for a very, very small whitelist for the Red Cross and charities like that which the carriers have validated.

toby
Troy Mcclure

join:2001-11-13
Seattle, WA

1 recommendation

Re: Carrier billing from calls or SMS should be illegal

said by BiggA:

Except for a very, very small whitelist for the Red Cross and charities like that which the carriers have validated.

The problem there is there are so many fake charities. They have similar names as the real ones, and as long as they give 1 cent a year to the real charity, they're allowed.

I think they should all be outlawed.
TBBroadband

join:2012-10-26
Fremont, OH
Reviews:
·AT&T U-Verse
·MegaPath
and the RedCross is nothing but a scam itself. Have you seen how much money they steal from the pubilc and how much is not accounted for???? Do you know that the money that is donated to your local chapter is NOT kept there? It goes back to the national chapter and then its passed/divided out to everyone else- AFTER the national office gets a cut. Those local chapters also generally pay fees and other BS crap to the nationals.

mackey
Premium
join:2007-08-20
kudos:12
said by BiggA:

Except for

No, no exceptions. All RECURRING billing should be banned, period. We can talk about white lists for 1 time charges per call/text.

/M
BiggA

join:2005-11-23
EARTH

Re: Carrier billing from calls or SMS should be illegal

Correct. And it would be for one-time things only.

Shadow01
Premium
join:2003-10-24
Wasteland

Congress is the one that should be held responsible

When congress wrote the language to open the phone markets to competition, they opened the flood gates to fraud.

Probitas

@teksavvy.com

easy fix

Call your mobile company, tell them you want to block that service from your phone (you have that right as the customer, and your provider certainly has the ability). Then stop payment. Your carrier cannot really obfuscate at this point, because otherwise they are aiding and abetting the problem you have with trying to cancel the service in the first place, and they have an easily identifiable conflict of interest. This would be proof of liability. And that should scare the hell out of them.
old_wiz_60

join:2005-06-03
Bedford, MA
Reviews:
·Verizon FiOS

Carriers have influence..

they pay a lot of money under the table to the likes of FTC and FCC to keep government interference to a minimum.

The carriers love cramming - they collect a percentage of the fees and it's profit to them, so why would they want to stop something that makes money for them?

The new head of the FCC isn't going to help - he's an agent of the wireless/cable industry.
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
·Optimum Online
·Verizon FiOS

Re: Carriers have influence..

said by old_wiz_60:

they pay a lot of money under the table to the likes of FTC and FCC to keep government interference to a minimum.

The carriers love cramming - they collect a percentage of the fees and it's profit to them, so why would they want to stop something that makes money for them?

The new head of the FCC isn't going to help - he's an agent of the wireless/cable industry.

The POTS era is mostly dead now, however you had a plethora of FEE based dialup numbers in various exchanges & area codes that were by law forced to announce their fees and give you a period of time to hang up unless their mere advertisement or # expressed a charge (eg, 1-900 numbers). You generally cannot reach these anymore with VOIP service and even some POTS phone lines because there is no acceptable practice to push service fees onto the caller anymore, except perhaps with texting from POST PAID cellphones.

I dunno, if your THAT lazy to have to donate $10 to the red cross by a text message, perhaps you should throw away all your money on wasteful things..