Schumer calls for ban on 'cramming' cellphone charges

By Brendan Sasso - 04/02/12 04:47 PM ET

Sen. Charles Schumer (D-N.Y.) urged the Federal Communications Commission (FCC) on Monday to adopt new regulations to ban unwanted third-party charges on consumers' cellphone bills, a practice known as "cramming."

Under pressure from Sen. Jay Rockefeller (D-W.Va.), AT&T and Verizon promised last month to ban the unwanted charges from landline phone bills. Rockefeller is working on legislation to make cramming landline bills illegal.

But Schumer is worried that scammers are also placing unwanted charges on consumers' cellphone bills.

He said some consumers are charged up to $10 per month for text messages containing unsolicited fees and services. He said the charges are often buried on monthly bills under misleading names, such as "service fee," "other fees," or "voicemail."

Schumer acknowledged that the practice is most likely already illegal, but he said consumers should not have "to go through an onerous process to remove the charge."

"I believe that cell phone wireless companies, which allow these crammers to operate, must take more responsibility to prevent this practice from occurring," Schumer wrote in a letter to FCC Chairman Julius Genachowski.

He said regulations should require carriers to confirm with consumers that they agreed to a third-party charge before billing them for it. In a separate letter to CTIA, the association that represents the wireless carriers, Schumer urged the industry to voluntarily verify the third-party charges.

But CTIA said they are victims of the scammers just like the consumers.

"The scams and scammers responsible for this fraud are third party vendors, not the wireless carriers," John Walls, CTIA's vice president of public affairs said in a statement.

He noted that unlike on landline phones where most third-party charges are unwanted, many cellphone consumers buy ringtones, apps, and games from third parties.

"All major wireless carriers and many others have adopted practices to clearly display charges for these types of purchases, as well as a convenient means to challenge any suspect charges," Walls said.

He said the focus should be on putting the scammers out of business, not new regulations for the wireless industry.