Federal Trade Commission Report Recommends Ways to Prevent Mobile Cramming

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The Federal Trade Commission (FTC) has issued a report that recommends best practices for mobile wireless industry participants to protect consumers against unauthorized third-party charges on mobile phone accounts, “an unlawful practice known as mobile cramming.” Cramming has been a priority for the FTC recently.  “In six recent enforcement actions, the [FTC] has alleged that such practices have cost consumers many millions of dollars, and in just three of these actions, defendants have agreed to orders imposing judgments totaling more than $160 million.”  The report recommends the following five best practices to prevent mobile cramming:

  • Give consumers the right to block third-party charges.
  • Ensure that advertising, marketing, and opt-in processes for charges are not deceptive.
  • Get express, informed consent before charging consumers.
  • Clearly display third-party charges on bills.
  • Create an effective process for resolving disputes.

The FTC staff report “focuses on the multi-billion dollar business known as carrier billing, which refers to the placement of charges for goods and services of third-party merchants on a mobile phone bill.”  It recommends that consumer protections apply to direct carrier billing or any other mechanism for placing third-party charges on consumers’ mobile phone bills.

For additional information, please contact Tony Veach.

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