MINNEAPOLIS - Senator Amy Klobuchar says Americans are losing billions; Minnesota Attorney General Lori Swanson says scammers are using your cell phone bills like credit cards. It's called cramming and it's hitting mobile devices with more frequency.
"It's a good scam," Sarah Janecek of Minneapolis said, explaining she noticed a $9.99 charge on her bill that she didn't authorize. "[It was] a subscription name that is letters and numbers that mean nothing. Now I pay bills online. I can easily see what I paid last month so if there's a big discrepancy, 10 or 12 bucks, I have to look at the bill and see why, which is actually how I spotted this," she told KARE 11.
We called the state Attorney General's office, and she wasn't surprised. "Cramming is an unauthorized charge on somebody's phone bill. Phone numbers are pretty widely available so a phone bill essentially becomes a credit card," Attorney General Lori Swanson said.
Swanson has fought cramming on landline phone bills and recently sent a letter to the FCC urging the ban on 3rd party billing among cell phone companies. She says crammers can get your number from surveys and lists but sometimes they simply guess. The text comes onto your phone as a monthly offer for services like weight loss service, premium texting, entertainment, sports scores or horoscopes, the AG said.
"They (the cell phone providers) enter into contracts with what are called billing aggregators and then the billing aggregators enter into contracts with the crammers. Along the way, everybody makes money; the phone company makes money, the billing company makes money, the crammers make money and the consumers lose a lot of money," Swanson explained.
U.S. Senator Amy Klobuchar from Minnesota says she successfully got some phone companies to end 3rd party billing on land lines, and now she is zeroing in on mobile phone providers. "Cramming is a very, very costly thing for the American people. They're literally losing billions of dollars. People think it must be some charge. It's not just a charge, it's an illegal charge," she said.
The Better Business Bureau of Minnesota/North Dakota recently looked into a scam that was hitting the state in early 2012, where a so-called bogus entertainment service was billing without consumer's knowledge. "They seemed to give an opt-out but they discovered was just by receiving the text they were billed automatically. It was 10 dollars each time they received it and some people received it more than once," Dan Hendrickson with BBB said.
So what should you do if you receive one of these unwanted text messages? Perhaps your first move should be to type a couple key words into an internet search engine; chances are you're not alone. And while you may have the option to "opt-out", replying to an unfamiliar text could prove to be unwise. "The evidence we've seen, if you do that, now they know they have a live phone number and it's more likely they'll actually facilitate cramming," Swanson explained.
Swanson and the BBB suggest you call your cell phone provider and get the charge taken off your bill. "As a consumer, you can ask a phone company to block 3rd party charges so a lot of people will put blocking on their phone bill," the Attorney General said.
KARE 11 business managers put a broken iPhone in a drawer for a couple of months, and while it wasn't in use, it was still billed a couple times for monthly text services that obviously were not authorized. The number one thing you can do is scrutinize your bill, like Sarah Janecek did. "I assume that it's common and that it will continue until there is enough backlash," she concluded.
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