Senate Commerce Committee Staff Report Finds Cramming on Wireless Phone Bills Was Widespread

Senate Commerce Committee Chairman Jay Rockefeller (D-WV) released a majority staff report on the findings of the Committee’s investigation into wireless cramming – where consumers get charged on their phone bills for goods and services they never agreed to purchase.

The report describes a billion dollar industry that has cost consumers hundreds of millions of dollars in unauthorized charges on their wireless bill while at the same time yielding tremendous revenues for the major wireless carriers. Cramming became a problem several decades ago when phone companies opened their billing platforms to allow third-party vendors to charge consumers for goods and services unrelated to their phone service such as photo storage, voicemail, and faxes.

Key findings:

• Third-party billing on wireless phone bills has been a billion dollar industry that has yielded tremendous revenues for carriers. AT&T, Sprint, T-Mobile, and Verizon generally retained 30-40 percent of each vendor charge placed.
• Despite industry assertions that fraudulent third-party wireless billing was a “de minimis” problem, wireless cramming has been widespread and has likely cost consumers hundreds of millions of dollars.
• The wireless industry was on notice at least as early as 2008 about significant wireless cramming concerns and problems with third-party vendor marketing tactics, yet carriers’ anti-cramming policies and sometimes lax oversight left wide gaps in consumer protection.