FTC Recommends Five Steps to Curb Cramming

On July 28, the Federal Trade Commission (“FTC”) issued a staff report on mobile cramming that includes five steps mobile carriers and other companies should take to prevent the practice and protect consumers from the illegal practice that adds unauthorized third-party charges to customers’ mobile phone bills. The report comes about a month after T-Mobile was charged by the FTC in a lawsuit alleging that T-Mobile used third-party billing to collect up to 40 percent of the total amount charged to customers. According to the FTC, the company was making “hundreds of millions of dollars” through premium SMS subscriptions that in many cases had not been authorized by customers. "Mobile cramming is an issue that has affected millions of consumers, sticking them with charges they did not authorize, and the FTC has worked hard to combat it," said Jessica Rich, the Director of the FTC's Bureau of Consumer Protection. "The best practices recommended in our report build on the FTC's active enforcement in this area and would give consumers needed protections to rein in the problems we have seen."