Science, Technology, Communications: Curbing The $2 Billion Lost Each Year To Phone Fraud

Erin Carson, Lead Analyst Friday October 17th 2014

Owning a wireless device is an increasingly expensive endeavor. Not only are the costs of smartphones and data plans continuing to rise, but according to research published in the Wall Street Journal, monthly service fees have also increased on average over the last year. Congress is responding with a series of bills that both expand options for consumers and protect them from fraudulent billing activity.

Over the last year, Congress has redoubled its efforts in taking action against several types of fraudulent billing activity. H.R. 3670 – Anti-Spoofing Act of 2013 addresses caller ID “spoofing,” the scrambling of caller identification numbers, which can be used to defraud phone call and text message recipients. The bill had widespread support in the House and passed under suspension of the rules in September. It could likely make it through the Senate during the lame duck session following the midterms, and if not, the bill will be re-introduced in the next Congress.  A number of bills also address “cramming,” in which a third party places deceptive charges on a person’s telephone bill, including wireless telephones. According to the Federal Communications Commission, these charges often appear on a phone bill in general terms, such as “service fees,” service charges,” “other fees,” or “calling plan,” among others. 

The following bills introduced during the 113th Congress will likely either pass during the short lame-duck session, or be re-introduced and fast-tracked in the next Congress:

  1. H.R. 3670 – Anti-Spoofing Act of 2013, sponsored by Rep. Grace Meng (D-NY): would prohibit misleading or inaccurate caller ID information from being sent to text messaging and Internet calls (known as VOIP). (Passed the House on 9/9/2014).

  2. H.R. 2309 - Wireless Tax Fairness Act of 2013, sponsored by Rep. Zoe Lofgren (D-CA): would prohibit states or local governments from imposing any new discriminatory tax on mobile services, mobile service providers, or mobile service property (i.e., cell phones) for five years. (Referred to the House Judiciary Subcommittee on Regulatory Reform, Commercial And Antitrust Law 7/15/2013).

  3.  S. 1235 – Wireless Tax Fairness Act of 2013, sponsored by Sen. Ron Wyden (D-OR): would prohibit states or local governments from imposing any new discriminatory tax on mobile services, mobile service providers, or mobile service property (i.e., cell phones) for five years. (Referred to the Senate Committee on Finance 6/26/2013).

  4. HR.1315 - Robo Calls Off Phones Act, sponsored by Rep. Virginia Foxx (R-NC): would require the Federal Trade Commission (FTC) to revise do-not-call registry provisions to prohibit politically-oriented recorded message telephone calls to telephone numbers listed on that registry. (Referred to the House Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade 3/22/2013)
  5. S. 1144 – Fair Telephone Billing Act, sponsored by Sen. John D. Rockefeller, IV (D-WV): would address the fraudulent practice of “cramming’ by prohibiting exchange carriers or providers from placing a third-party charge that is not directly related to the provision of telephone services on a customer’s bill. (Referred to the Senate Committee on Commerce, Science, and Transportation 6/12/2013)

  6. S.481 - Wireless Consumer Choice Act, sponsored by Sen. Ron Wyden (D-OR): would require the Federal Communications Commission to allow consumers to unlock any type of wireless device. (Referred to Senate Finance Committee 8/1/2013).

Want more?

Federal Communications Commission: http://www.fcc.gov/guides/cramming-unauthorized-misleading-or-deceptive-charges-placed-your-telephone-bill

Wall Street Journal: http://online.wsj.com/news/articles/SB10001424052702304704504579429592281584078

Consumer Affairs: http://www.consumeraffairs.com/news/wireless-crammer-will-surrender-his-assets-080514.html

Senate Commerce, Science, and Transportation Committee: http://www.commerce.senate.gov/public/index.cfm?p=PressReleases&ContentRecord_id=a4dd76e2-5822-4741-b483-8a5905c7b022

Federal Trade Commission: http://www.ftc.gov/system/files/documents/reports/mobile-cramming-federal-trade-commission-staff-report-july-2014/140728mobilecramming.pdf

NBC news: http://www.nbcnews.com/id/43728825/ns/business-consumer_news/t/fcc-proposes-crackdown-phone-bill-cramming/#.U_Y-XJV0zug 

National Association of Attorneys General: http://www.naag.org/assets/files/pdf/signons/Final%20FTC%20Comment%20Mobile%20Cramming.pdf 

Reference Notes

 http://www.business.ftc.gov/blog/2014/06/who-profits-cramming-ftc-challenges-t-mobiles-role-bogus-billing

http://www.nbcnews.com/id/43728825/ns/business-consumer_news/t/fcc-proposes-crackdown-phone-bill-cramming/#.U_Y-XJV0zug