National Consumers League statement on decision by major wireless carriers to cease commercial PSMS billing
November 22, 2013
Washington, DC—The National Consumers League, the nation’s pioneering non-profit consumer and worker advocacy organization, today applauded the agreement between 45 state Attorneys General and three major wireless carriers – AT&T, Sprint and T-Mobile – to end billing for commercial Premium Short Messaging Services (“PSMS”). The decision addresses a major source of cramming – the unauthorized placement of third-party charges on consumers’ cell phones. The carriers will reportedly continue to provide billing services for charitable donations.
The NCL has led a campaign to reform third-party billing and address the threat of cramming. Last year, in response to pressure from consumer groups, the class-action bar, Congress and federal and state regulators, the nation’s major landline telephone carriers agreed to cease billing for so-called “enhanced” services, which had been a major source of cramming. Yesterday’s announcement is a major step towards addressing the migration of cramming fraud to wireless phone bills. A NCL analysis earlier this year estimated that cramming on wireless phone bills costs American consumers $887 million annually.
“This announcement is a major victory for consumers,” said Sally Greenberg, NCL Executive Director. “As we have long argued, third-party billing on phone bills is an inherently insecure payment method. We are glad to see that the wireless industry is committed to protecting its subscribers from fraud while preserving legitimate uses of this technology, such as text-to-donate.”
While this is welcome news for millions of consumers, the agreement is reportedly only a voluntary commitment by the three carriers. Second, the nation’s largest wireless carrier, Verizon Wireless, is not part of the agreement. However, according to a statement from the company, the carrier is also planning to end premium messaging. We believe that regulation is still necessary to give these voluntary agreements the force of law and to ensure that cramming fraud doesn’t migrate to smaller rural and regional wireless carriers.
“Voluntary commitments are a good first step towards ending wireless cramming once and for all,” said John Breyault, NCL Vice President of Public Policy, Telecommunications and Fraud. “However, regulations are still necessary to protect all wireless, landline and VoIP users. Consumers shouldn’t be less protected from cramming just because they don’t get service from one of the biggest carriers.”
About the National Consumers League
The National Consumers League, founded in 1899, is America's pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.