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New push to end unauthorized cellphone charges

By Bill Gephardt | Posted - Jul 1st, 2013 @ 9:45am

SALT LAKE CITY — The wireless industry is bristling at a renewed federal push to end unauthorized charges on cell phone bills.

Mobile cramming, as it's called, is almost the perfect scheme for scammers. Unlike theft or robbery, victims of cramming often do not know they have been hit because scammers charge small amounts a persons cell phone bill — typically less than $10.

"A lot of times there will be a $5 or $6 or $9 charge that goes unnoticed for several months," said Utah Attorney General John Swallow. "This is a service that was never asked for or authorized or is used by the consumer."

Swallow and 39 of his counterparts are urging regulators with the Federal Trade Commission to do more to put an end to it.

"We're asking the FTC to pay more attention to that type of practice — put more restrictions on that type of practice," he said.

The practice is very lucrative, according to Consumer Reports. It estimates scammers are pocketing close to $2 billion a year through cramming.

How do thieves even find your smartphone?

"Malicious software that's downloaded on your phone after you download an app," said Malini Mithal with the Federal Trade Commission. "And that gets your phone number. Somehow you're signed up for some kind of service."

The FTC is pushing wireless carriers to offer consumers the option of blocking all third-party billing. But carriers say they already monitor who places charges on bills and they already require consumers to verify any premium messaging service with a second confirmation text message.

Money may be another reason carriers don't want federal regulators stepping in. A 2011 report by the Congressional Budget Office found carriers make millions of dollars off of cramming.

"We need a little more regulation in that area," Swallow said.

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