In yet another stroke of bad news for the U.S. mobile user, the U.S. Senate Commerce Committee has issued a report describing the ways in which mobile users have been duped into paying hundreds of millions of dollars in unauthorized charges through their cell phone bills.
The top wireless providers in the U.S. — AT&T, Verizon, Sprint, and T-Mobile — are under fire for collecting revenue from unauthorized charges to users’ mobile bills, most of which originate from smaller companies that charge for app add-ons or extra services such as ring tones. Reuters quotes the Committee’s report:
Some carrier policies allowed vendors to continue billing consumers even when the vendors had several months of consecutively high consumer refund rates – and documents obtained by the committee indicate this practice occurred despite vendor refund rates that at times topped 50 percent of monthly revenues.
VISUAL CONTEXT: MOBILE PAYMENTS
The report notes that the carriers — mostly the aforementioned four companies — keep between 30 and 40% of the revenue from these unauthorized charges. These findings arrive at the same time as the Federal Trade Commission issues recommended steps for companies to eliminate this practice of “cramming”, and to prevent them from having to fork over reimbursements for overbilling. The FTC has specifically cited and filed a complaint against T-Mobile for overbilling; the Commission claims that the wireless provider charged customers for services for which they did not sign up including subscriptions. T-Mobile’s CEO John Legere responded by affirming the company’s devotion to its customers, and said that it would comply with reimbursing users.
All of this news comes on the heels of a report by the U.S. Government Accountability Office, which revealed findings about the use of data caps by U.S. broadband providers. Consumers are starkly unaware of data caps and charges for the use of extra data from both wired and wireless providers, according to the GAO. As more users come online, specifically through mobile devices, these tactics used to ensnare users into unknowingly paying more than they should for data plans and mobile-related services will become increasingly detrimental to the U.S. mobile scene. It appears as though multiple government agencies are beginning the process of keeping close scrutiny on the companies responsible, though.