| WASHINGTON, July 30
WASHINGTON, July 30 U.S. mobile phone users have
likely paid hundreds of millions of dollars in unauthorized
charges "crammed" onto their bills, according to a report
released by the U.S. Senate Commerce Committee on Wednesday
ahead of a hearing on the subject.
The cramming often originates with small companies that
provide celebrity gossip, ring tones or similar services.
But the money is collected by cellphone providers, including
Verizon, AT&T, T-Mobile US Inc or Sprint,
owned by SoftBank Corp, which typically keep 30 to 40
percent of the revenue, the staff report found.
"Some carrier policies allowed vendors to continue billing
consumers even when the vendors had several months of
consecutively high consumer refund rates - and documents
obtained by the committee indicate this practice occurred
despite vendor refund rates that at times topped 50 percent of
monthly revenues," the report found.
In early July, a federal court in California shut down six
companies accused of cramming more than $100 million in
unauthorized charges on consumers' cellphone bills, according to
the Federal Trade Commission.
The FTC also filed a complaint against T-Mobile, the
fourth-largest U.S. wireless carrier, on July 1 accusing the
company of charging customers for subscriptions to services,
like flirting tips, for which they did not sign up. It is asking
the company to refund the unauthorized charges.
T-Mobile CEO John Legere said that the FTC had
"sensationalized" the problem. The company has stopped billing
for text services and said in June it would help consumers
recover unauthorized payments.
But Senator Jay Rockefeller, Democrat from West Virginia,
said companies must do more to combat fraud in phone bills.
"Industry representatives told us that their voluntary
policies and practices provide consumers - and I quote - a
'robust process designed to protect customers from unscrupulous
actors,'" Rockefeller said in a statement. "But this report
makes it clear that is not the case. Cramming on wireless phones
has been widespread and has caused consumers substantial harm."
Witnesses at the Wednesday's hearing will include FTC
Commissioner Terrell McSweeny, Vermont Attorney General William
Sorrell, Travis LeBlanc of the Federal Communications Commission
and Michael Altschul, general counsel of CTIA - The Wireless
For the full report see: tinyurl.com/lmwffv2
(Reporting by Diane Bartz; Editing by Ros Krasny and Dan