Senate report shows how carriers collected millions from cramming

As this site has reported on a number of occasions, T-Mobile, Verizon, AT&T and Sprint have all been involved with cramming tactics for years now and have reaped the benefits of such tactics to the tune of millions of dollars per year.

Basically, the wireless carriers would sign up consumers all over the country for a $10 a month service that sent text messages containing a variety of news/tips/horoscopes. The carriers would then try to confuse the charges on a customers bill, ignore requests to be removed and dodge any attempts to be contacted.

Just last year, Vermont Attorney General William Sorrell announced that AT&T, Sprint and T-Mobile had struck an agreement with forty-five states to stop billing from these same Premium SMS services (or as he put it “scam artists“).

Now, a report from the U.S. Senate claims that mobile carriers have made hundreds of millions in profits through such cramming tactics. The report claims that carriers have been investigated by multiple state attorneys during the past six years after customers from those states complained in loud numbers about fraud charges.

In fact, the report notes that the problem has been “widespread and has likely cost consumers hundreds of millions of dollars.”

“There is now overwhelming evidence that these statements were just not true—cramming on wireless phones has been widespread and has caused consumers substantial harm,” Senator John “Jay” Rockefeller, a West Virginia Democrat said in a statement. – NetworkWorld

Although the report notes that the wireless industry has recognized that customers were being victimized, the carriers also continue to blame the third-party services that handed over billions of dollars to them.

“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.” – Senate Report, NetworkWorld

This report comes just weeks after the Federal Trade Commission filed a complaint against T-Mobile accusing the carrier of making millions of dollars on third-party billing while ignoring many customer complaints.