FTC Releases Staff Report on Mobile Phone Bill Cramming

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On July 28, 2014, the Federal Trade Commission (“FTC”) released a report, entitled “Mobile Cramming: An FTC Staff Report” (“Report”). The Report focuses on, and makes recommendations regarding, the mobile payment option typically referred to as “carrier billing.” The Report describes this payment option as the means by which consumers “charge payments for third-party goods and services to their mobile phone accounts.” The Report is a follow up to the FTC roundtable held in May 2013 that also focused on carrier billing. This latest action demonstrates the FTC’s ongoing interest in addressing fraudulent practices that result in unauthorized third-party charges to consumer mobile phone accounts.

FTC CONCERNS -

The focus of the Report is on “cramming,” which is described by FTC staff as the placement of unauthorized third-party charges on a phone account. In the Report, FTC staff explains that cramming has become more of a problem in recent years because consumers “frequently overlook” unauthorized charges on their mobile phone bills and often pay their bills in full, notwithstanding such charges. For example, FTC staff notes that consumers may not notice unauthorized charges on their mobile phone accounts when they use...

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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