Cellphone cramming: Don’t answer that text

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There’s a new, looming cellphone danger out there — cramming.

Cellphone cramming happens when you’re billed for third-party charges you didn’t authorize. Because these fees are usually small, they can be easily missed on bills. But they’re costing consumers as much as $2 billion per year, according to the U.S. Senate Committee on Commerce, Science and Transportation.

The ruse typically starts with a text message for unwanted offers such as stock tips or horoscopes. Next, the charge may be automatically added to your next wireless bill. Charges may be buried under several headings such as “service fee” or “voice mail.”

“Usually crammers start with small charges of 99 cents or less,” says Faye Chen Barnouw, attorney with the Federal Trade Commission. “If you don’t catch these charges, the amount increases.”

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Cramming has been a persistent problem with land-line billing for more than a decade. And Verizon and AT&T already have banned land-line cramming. However, cellphone cramming has not been reined in, Barnouw says. Wireless companies are allowed to charge consumers for third-party services, receiving fees in the process.

Recently, Congress has tried to stem the rising cellphone-cramming tide. And in April, Sen. Charles Schumer called on the Federal Communications Commission to ban cramming. The crux of the problem is that “charges appear first and then consumers have to dispute them later,” Schumer wrote in his letter to the FCC. Making matters worse for consumers is that billing disputes can be time-consuming and difficult to prove.

Fortunately, cellphone cramming legislation likely will be passed in the next year or so, since cellphone use is rising, Barnouw says.

“For now, the ball is in the consumer’s court,” says Michael Bremmer, CEO of consulting firm TelecomQuotes.com. And smartphone features, such as app downloads or using your phone as a wallet, can increase cramming risks, he adds.

Here are five tips for protecting yourself from cellphone cramming.

Block all third-party charges. Every reputable company offers bill blocking, including toll-free 900 numbers where scammers sometimes troll for personal data. Blocking prevents cramming 99 percent of the time, says Denis Kelly, founder of Identity Ambassador Commission, a group dedicated to fighting identity theft.

He also advises that consumers register their cellphone number with the National Do Not Call Registry at DoNotCall.gov, which also applies to text messages.

Check your bill monthly. Only 1 in 20 people being crammed notices the ruse, according to the FCC. Taking time to check your wireless bill every month is crucial. Looking through varying cellphone charges means more work, but that’s usually how cramming is first spotted, says the FTC’s Barnouw. You also can monitor your bill online.

Teens are particularly vulnerable to cramming, Barnouw says. They may unknowingly sign up for unwanted services or contests. There’s a way to avoid that from happening. You can lock a cellphone, so your kid can’t sign up for services he doesn’t need, says Bremmer.

Avoid signing up for contests and sweepstakes. To enter these contests, you must fill out slips with your name and phone number, Barnouw says. This information can be aggregated and used for cramming or sold to crammers.

Always read the fine print on an offer so you’ll know how your information is being used, says Kelly of the Identity Ambassador Commission.

Don’t answer unknown text messages. Barnouw says some third-party providers may send unsolicited text messages, asking to start a service. To find out who’s behind the message, go to websites such as SMSWatchDog.com, a website that monitors unsolicited text messages.

Report cellphone cramming incidents, once they start. If you’re crammed, file a complaint with the FTC at FTC.gov and the FCC at FCC.gov. The FTC has been vigorously fighting cellphone cramming, and it recently brought a suit against the country’s largest third-party billing service, Bermuda-based Billing Services Group. The allegations were for placing more than $70 million in “bogus cramming charges on consumers’ phone bills,” according to a statement.

“We can track trends,” Barnouw says.