Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Attorneys general express concern about mobile “cramming” to FTC, (Jul 1, 2013)

By Paul Kirby, TR Daily

Forty state and territorial attorneys general have written the Federal Trade Commission to express concerns about the growth of mobile “cramming.” The letter from the National Association of Attorneys General follows up on a May 8 workshop held by the FTC on the topic.

“The Attorneys General applaud the FTC’s undertaking its examination of mobile cramming practices; as is detailed below, mobile cramming continues to harm large numbers of consumers residing in our states,” the letter said. “Like the FTC, the State Attorneys General have a broad mandate to protect consumers in the mobile marketplace. The undersigned Attorneys General, like the FTC, continue to receive complaints from consumers that charges, usually ranging from $9.95 to $24.95 per month, appeared out of the blue on their phone bills without their authorization and for goods and services that the consumers neither requested nor used.”

“The Attorneys General would like to highlight the following areas of particular concern for mobile consumers: (1) unauthorized charges being placed on consumers’ bills for unwanted and unused services; (2) inadequate disclosure of third-party charges on mobile phone bills; (3) inadequate mechanisms for consumers to effectively block third-party charges on their bills and obtain refunds for unauthorized charges; and (4) the lack of state and federal statutory protections governing consumer disputes about fraudulent or unauthorized charges placed on mobile phone bills,” the letter said. “The Attorneys General agree that addressing these issues should be a priority among consumer regulators and the mobile telephone industry.”

Several attorneys general “recently analyzed the mobile cramming complaints received by twenty-eight states.” Those states reported having received more than 750 mobile cramming complaints. The overwhelming majority of the complaints were received in the last few years, but some go as far back as 2006.

While a significant number, it is generally believed that these complaints represent only a very small fraction of the consumers who have been improperly charged for third-party goods and services on their mobile phone bills.

“The complaints implicate the entire third-party charge ecosystem; they name 14 mobile carriers and over 250 third parties (including content providers and billing aggregators),” the letter said.

“The number of complaints the twenty-eight states have been receiving has increased over time; while less than 25 were received each year in 2006 and 2007, close to 50 were received in 2008, nearly 100 were received in both 2009 and 2010, more than 150 were received in 2011 and nearly 300 were received in 2012.”

News: ConsumerProtection FederalTradeCommissionNews