A new Senate committee report finds those pesky unknown charges on your cell phone bill are more common than you may think.
Wireless "cramming" -- the practice of loading up consumers' mobile bills with charges for services they don't want, without their consent -- has cost Americans "hundreds of millions" of dollars and is widespread across the industry, according to a new report by the Senate Committee on Commerce, Science and Transportation.
Charges are crammed on to customer bills by 3rd party providers, many of whom provide "premium short message services," a fancy way of saying "idiotic horoscope texts and other garbage." Many victims of these schemes contact their wireless providers and request that the charges get removed, but others never notice, obediently paying the fraudulent charges every month.
A 2013 survey conducted by the Office of the Attorney General of Vermont and cited in the report found "60 percent of respondents reported that the third-party charges found on their wireless telephone bills were unauthorized."
Recently, the FTC filed suit against wireless provider T-Mobile over the practice, and there have been numerous suits filed against phone companies at the state and federal levels in the past.
How they get you
So how do consumers get ensnared in these services in the first place?
According to the report, here's how it typically happens: A consumers responds to some kind of ad offering to let them download a song or get some other freebie if they text to a certain number or provide their mobile phone number in an online form. After consenting again via text message (or not, in some cases), consumers are then enrolled in a subscription service that hits them for a fee every month.
Here's an example cited in the report:
There are variations on the scheme, but the end result is millions of dollars being siphoned out of consumer pockets and into unscrupulous crammers' pockets, and into the pockets of major mobile carriers, who get a 30 percent to 40 percent cut of the proceeds.
"Industry has gained substantial profits from third-party wireless billing while providing consumers inadequate protections against deceptive and fraudulent charges on their wireless bills," according to the report.
A future of fraudulent fees?
And the problem could get even worse. The rise of "direct carrier billing," where consumers pay for purchases in app stores and other retailers with their phone and have it put directly on their phone bill, could provide even more opportunities for consumer fraud, according to the report.
So what's the upshot? Be careful who you give your mobile number to, and don't confirm anything with a vendor over text until you're 100 percent sure you know exactly what you're getting into. And always, always keep a close eye on your mobile phone bill for unauthorized charges.
Follow me on Twitter: @ClaesBell.