Cell phone ‘crammers’ pile on fraudulent charges
BY KARA SPAK email@example.com December 4, 2012 9:36PM
Updated: January 6, 2013 10:01AM
Christie Hicks knew something wasn’t right about the $9.99 “Lovegenie Tips” charged by Wise Media LLC on her 62-year-old mother’s cell phone bill.
Hicks, an attorney at the consumer protection group Citizens Utility Board, and her mother were victims of “cramming,” the practice of placing unauthorized third-party charges on cell phone bills that’s increasing in Illinois.
“Scammers may see cell phones as the new frontier for fraud,” said David Kolata, CUB executive director, on Tuesday.
With cramming, the charges are small — typically between $1.99 and $9.99 — but they add up to an estimated $1.4 million being scammed from Illinois consumers, according to an investigation by CUB and Validas, a wireless industry research firm. Nationally, the total cost to cell phone users may exceed $59 million, the investigation found.
The scammers rely on consumers not checking their long and complicated cell phone bills, and not noticing a slight increase in cost. Only about 1 in 20 customers who have been crammed catch the cost, Kolata said. Hicks found the charges listed in a 50-page phone bill after three months of believing her family bill was too high, she said. Only one month’s cramming charge was refunded.
Cell phone users can block third-party use of their phones, but this often comes as an additional charge from the cell phone service provider. That charge may be more than the cost of the cram.
The analysis by CUB and Validas showed that cell phone cramming is on the rise in Illinois, with the number of potentially fraudulent third-party charges nearly doubling from 26 percent to 51 percent over the last year. Kolata believes this may be because of a new law that essentially blocked landline cramming.
“It looks like they may be shifting over to wireless,” he said.
Some third-party bills are legitimate — like a text donation to a non-profit for hurricane relief or the cost of downloading a ringtone. Cram charges are typically billed as something vague like “premium texting” or “extra special voice mail.”
“The only thing extra special about extra special voice mail was the extra $4.99 a month,” Kolata said.
Scammers access consumer information through fraudulent websites promising prizes if you register with your cell phone or by sending random texts that customers reply to, unknowingly confirming the charge.
CUB has set up a “Stop Cramming Center” at www.CitizensUtilityBoard.org with tips on what to do if they have been crammed.