On July 28, 2014, the Federal Trade Commission (FTC) issued a staff report on “mobile cramming”—the unlawful practice of placing unauthorized third-party charges on mobile phone accounts. The report recommended five best practices primarily directed to mobile carriers but at times also directed to merchants and billing intermediaries. This report follows a number of FTC enforcement actions to combat mobile cramming, as well as a May 2013 mobile cramming roundtable convened by the FTC and attended by industry participants, consumer advocates, and regulators. Following the roundtable, the four largest mobile carriers said that they would discontinue most “Premium SMS” billing, in which a consumer purportedly authorizes a third-party charge by texting a five or six-digit number. Nonetheless, the report emphasized that the consumer protection principles embodied in its recommendations apply to any form of carrier billing (i.e., charging a good or service directly to a mobile phone account), including direct carrier billing.
Continue Reading FTC Issues Carrier Billing Recommendations to Protect Consumers Against Mobile Cramming