Unauthorized third-party charges onto mobile phone bills have been a growing problem over the last several years. This practice, where customers get charged on their phone bills by a dishonest company for services that were not wanted or authorized, is called mobile cramming. This type of scam is very successful because these third-party companies put unauthorized charges on customers’ bills, usually ranging from $1.99 to $19.99, which can easily get over-looked or hidden amongst other legitimate fees.
Whether it be through NFC (Near Field Communication), mobile apps, or mobile wallets; payments via mobile phones in America are on the rise. In the latest report by the FTC (Federal Trade Commission), it found that mobile payments (aka mobile money, mobile money transfer and mobile wallet) represent $640 million in transaction s in the US, an increase from $170 million in 2011. With such rapid growth in people using their phones to pay for goods and services, an increase in mobile scams like cramming is on the rise as well. According to this article by Fox 23 reporter Amara Walker, consumer groups have reported the scam to cost cell phone users about $59 million a year.
The best way for consumers to protect themselves is to ensure that they are carefully looking over their mobile phone bills every month. Read every bill item and look for charges with vague descriptions like “membership fee”, “data” and “premium messages”. A red flag to watch out for in order to help prevent cramming in the first place is being asked for a cell phone number online. This is usually how scammers receive information in the first place. Once a fraudulent charge on a bill is caught, call your mobile phone carrier right away. As well, many carriers offer the option to block third-party charges all together, which will help prevent any future unauthorized charges.
Mobile phone companies can play a huge role in helping to combat mobile cramming as well. One way to assist your customers is to help educate them on what mobile cramming is. Many customers aren’t even aware this type of scam exists and assume that all charges on their bill are from their provider and not from a third-party. The most important thing mobile phone companies can do is to encourage customers to carefully check over their bills each month. Many people pay their bills and do not even look at the details of each charge. One reason is that bills can be confusing to read. Another big reason is that people are busy and do not have time to carefully check over their bills.
Mobile carrier companies as well as banks and other billers have found that mobile bill payment apps are useful for customers to pay their bills accurately and on time. With a bill payment app, customers are also able to pull up payment history and account or bill details on the go. Majority of Americans now have mobile phones and generally carry it with them at all times. With mobile bill apps, people can now easily go over the details of their bills anytime and from anywhere that is convenient for them and are not limited to looking at their bills at the end of the month when it comes in the mail with dozens of other bills to be paid.
To learn more about mobile bill payment apps, check out our White Paper on Mobile Apps.