“Remember the good old days when your phone bill was just one page long?” asks Phil Cannella. Scams can come in many forms, but the great number of charges found on the average cell phone bill have made things easier for scammers. As telecom consumers have made the move from landlines to smart phones, the accompanying bills have become longer and more complex, loaded up with service fees, regulatory fees and other esoteric charges. But consumer advocacy watchdogs are warning you to keep an eye on your bill, so you don’t fall victim to the cell phone cramming scam.
The cram scam works by sending consumers unsolicited text messages which charge a small fee. These messages are generally “jokes of the day,” horoscopes, or other entertainment fare for which companies charge an enrollment fee as high as $9.99 in some cases. The problem is that consumers can be charged for these services without ever signing up; if a consumer doesn’t immediately respond to the text message to stop service, they are automatically enrolled. Due to a law which allows phone companies to profit from collecting bills for third parties, these charges will appear on a consumer’s phone bill. The practice of cramming has actually been around for more than a decade, and previously was more common on landline phones.
Although cramming is illegal, it has seen a resurgence in the age of smart phones. While consumers can dispute any questionable charges with their phone company, many times the fees go unnoticed, especially for those who often pay for downloads like ring tones, mp3s, and wallpapers.
The fees are often disguised on phone bills as “service fees” or taxes. “This scam could affect retirees disproportionately,” says Phil Cannella. “The cram scam can be difficult for older people to detect because they did not grow up in the age of smart phones and five-page phone bills.”
For a retiree who grew up with landline phones, these charges may be hard to detect on phone bills. Some retirees have poor vision and may also be suffering from a diminished mental capacity.
“These are the people scammers hope to target with cell phone cramming,” says Phil Cannella.
Sen. Charles Schumer has recently called for the FCC to crack down on the cram scam. In a press release, the Senator urged the FCC to “mandate that consumers cannot be charged third party fees by so-called ‘crammers’ unless they give their explicit consent directly to their cell phone carriers.”
While the FCC may have to regulate this practice in the future, Senator Schumer hopes cell phone carriers will comply with his recommendation voluntarily. An FCC study estimates that about 20 million people are affected by cramming each year and that only 1 in 20 even realizes they’ve been scammed.
Phil Cannella, CEO of Retirement Media, Inc. urges consumers to be watchful when looking at cell phone bills and report unusual charges to their phone company and to the FCC. “The only way to avoid this scam is by staying one step ahead of the scammers, and by paying attention to your phone bill,” says Phil Cannella. Scams can take you by surprise, but not if you know what to look for.”
FOR MORE INFORMATION FROM PHIL CANNELLA, TUNE IN TO THE CPR SHOW, EVERY SATURDAY 11AM-1PM. LISTEN LIVE