Cellphone bills new frontier for fraud

By Kaley Fowler

Cellphone bills may be the new hotbed of fraud, according to a recent Citizens Utility Board report.

The report, released Dec. 7 in conjunction with the wireless research firm Validas, shows that the number of cramming charges, or fraudulent third-party fees for services that customers have not solicited, has almost doubled during the last year.

The findings indicate that scam artists are targeting cellphone users who do not closely examine their wireless bills, said CUB Executive Director David Kolata during a Dec. 7 news conference.

“The analysis suggests that wireless cramming is a growing problem in Illinois,” Kolata said. “As they’re driven from landline bills, scam artists may see our cellphones as a new frontier for fraud.”

According to John Breyault, vice president of public policy, telecommunications and fraud for the National Consumers League, three parties facilitate cramming practices: wireless service providers, billing aggregators and third-party service providers.

“Most consumers don’t realize this, but their phone bills can be used almost like a credit card to charge them for different products and services,” Breyault said.

He explained that third-party service providers tack on charges for services such as ringtone downloads and enhanced voicemail without consumers’ consent. The scammers are able to do this because they work with billing aggregators who allow them to sneak miscellaneous fees onto cellphone bills, he said.

Although many customers are charged for services they have not purchased, wireless service providers do not seek to end the practice because they also profit from it, according to Breyault.

“Unfortunately, all three of the players have a financial interest in making sure that the system continues as it is because they all get a cut of what consumers pay,” Breyault said.

The best way for wireless customers to combat cramming charges is to closely watch their cellphone bills, according to Jim Chilsen, director of communications for CUB. The organization is urging cell phone users to monitor their bills and visit its online “Stop Cramming Center” to familiarize themselves with the scam.

“Illinois cellphone bills are vulnerable to fraud right now, and anybody who makes a cellphone call should be reading their bills carefully to detect any potentially fraudulent charges,” Chilsen said, adding consumers should demand increased cramming regulations.

In May, the FCC tightened restrictions on landline cramming by giving customers the option of blocking third-party charges and requiring telephone companies to list them separately from service providers’ fees. However, Chilsen said the law does not apply to cellphones because it is difficult to discern which third-party services are solicited and which are fraudulent.

As consumer advocacy groups call on the FCC to restrict cramming, cellphone users can also help prevent the practice, Chilsen said.

“The No. 1 protection against this scam is the consumer,” Chilsen said. “If you read your bill carefully, you’re going to spot these charges before they do a lot of damage.”