Comments Off

FTC Cramming Down Hard on Cramming

Posted July 24th, 2012 in cramming and tagged , , , , , by Alton Drew

The Federal Trade Commission yesterday issued comments to the Federal Communications Commission on the issue of cramming on wireless services. Cramming refers to charges on a wireless service customer accounts that come from a party other than the carrier itself.

According to the FTC, in 2011, the agency received approximately 1800 complaints about cramming. The FTC would like to see legally mandated measures that would allow consumers to block charges from up on their accounts and inform consumers on how to block these charges.

Cramming has historically been a problem with wireline services and it appears it is becoming an increasing problem with wireline.

A legal mandate would of course add to a carrier’s cost of providing service. A mandate, as opposed to industry-preferred voluntary monitoring, may have a negative impact on relationships between wireless carriers and third-party vendors. Otherwise, I don’t see a negative impact on the quality of service carriers would provide if they also had to abide by additional consumer protection requirements.

After reviewing AT&T, Verizon, and Sprint’s 8-Ks, 10-Qs, and 10-Ks, I couldn’t conclude that the carriers were concerned about any specific cost increases that would result from this proposal being implemented.

Far be it from me to like regulation, but the only positive I see is that consumers may feel a little more comfortable adopting mobile broadband if wireless carriers allowed consumers to block third-party charges.