FTC Says FCC Should Expand Cramming Rules to Include Wireless
The FTC urged the FCC to impose anti-cramming rules on wireless carriers, saying in reply comments to the FCC that voluntary industry efforts aren’t enough. Many industry filers reiterated earlier arguments (CD June 28 p9) that anti-cramming rules should not be expanded to cover wireless and VoIP. Consumer groups agreed with the FTC that the FCC should do more (CD July 23 p17). In April, the FCC adopted a further rulemaking notice asking whether its cramming rules should be expanded.
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"It is ultimately in the interest of all stakeholders here -- including regulators, consumer groups, and industry participants -- to ensure that consumers are strongly protected against cramming of unauthorized charges on their wireless bills,” the FTC said (http://xrl.us/bnhwf7). Part of a 2011 cramming workshop at the FTC was dedicated to cramming on mobile bills, the agency said: “The FTC is focused on this issue, particularly as third-party billing on wireless bills has become more widespread.” The FTC said it’s brought more than 25 enforcement actions under Section 5 of the FTC Act to stop cramming practices and provide redress to victims.
"The FTC has extensive experience combating the widespread practice of cramming charges on landline telephone bills,” the agency said. “Complaint data from the FTC and other sources indicate that cramming on wireless bills is also a significant problem. Mobile cramming is likely to continue to grow as cramming schemes expand beyond the landline platform and mobile phones are more commonly used for payments. The FTC encourages voluntary industry-led efforts to address mobile cramming, but believes also that wireless providers should be required to include specific protections for consumers using wireless devices -- most notably, the ability to block all third-party charges."
Verizon and Verizon Wireless said the initial comments had a common theme: “Voluntary industry measures are the best means to address concerns about protecting customers from unauthorized third-party charges.” The FCC shouldn’t restrict the ability of wireless carriers to offer third-party billing services, the two companies said (http://xrl.us/bnhwht). “Such drastic action would harm the substantial number of customers who prefer the ease and convenience of reviewing and paying a single bill each month and who have not experienced any unauthorized charges. Moreover, it could deny third-party providers a cost-effective way to get to market."
AT&T said it would be “premature” for the FCC to impose new cramming rules. “The evidence in the record of this proceeding shows that cramming complaints are few, especially when compared to the number of telephone bills rendered annually,” the carrier said (http://xrl.us/bnhwzb). “The new rules have just taken effect and the Commission lacks any empirical basis for concluding that they do not go far enough.” Besides April’s rules, “several carriers, billing aggregators, and industry associations have taken voluntary measures to address cramming,” the company said. “The cost of complying with these additional regulations ... is exceedingly high.” AT&T noted that CTIA said the ratio of wireless cramming complaints to the FCC is about one complaint per 646,974 wireless subscriber units per year from 2008-2010.
"The record developed in this proceeding continues to support the conclusion that cramming regulations are not necessary for the CMRS industry,” T-Mobile said (http://xrl.us/bnhw2r). “Commenters urging the Commission to extend cramming regulations to the CMRS industry do not provide sufficient data to justify the need for regulations. And to the extent data is supplied, it generally is data the Commission already considered and found insufficient to justify regulation.”