Text Messaging Featured Article

Ever search for a cool wallpaper or ringtone on your smartphone, and come across a service offering free goodies for the easy exchange of your mobile phone number? These deals can sometimes seem too good to be true and, as it turns out, they often are. Such was the case for a great many wireless users with Sprint (News - Alert) plans, who have been wittingly or unwittingly victims of what the Consumer Financial Protection Bureau (CFPB) calls “illegal cramming.”

This term refers to the act of a carrier—in this case, Sprint—slipping in unauthorized third-party charges to subscribers’ phone bills. According to the CFPB, Sprint acted as a “payment processor” so that anytime a consumer received content on their phones sent from third-party vendors, such as ringtones and wallpaper via text message, the user was charged without consent. These premium text message services targeted consumers online, requesting their cell phone numbers, before proceeding to charge them for “free” content, or in several instances, content that was never actually provided.  Shady practices at best, and hugely illegal at their worst.

The most alarming part of this scheme is, of course, Sprint’s seemingly complicit role in it. While the U.S. mobile carrier may claim otherwise, it was turning quite a profit of its own—between 30 and 40 percent of the gross revenues of the third-party charges in question. The CFPB is leveraging a lawsuit against Sprint as a result of these practices, reinforcing the fact that it takes third-party vendor management very seriously and is willing to crack down on any organization responsible for improper or negligent oversight regarding third-party vendors. 

The CFPB holds that all organizations must properly vet their third-party vendors to prevent fraud and behavior that might put the organization and its customers at risk. Sprint failed to track the non-consensual third-party fees, or the user complaints reporting them. In addition, the CFPB asserts that Sprint was not using any sort of fraud-alert mechanism. Despite the writing being on the wall, considering that several of these third-party vendors were previously sued for the exact same cramming practice, Sprint appears to be guilty of a pretty significant oversight.

For mobile phone users, it’s important to remain wary of deals that trade phone numbers for services, as text messaging premiums are still a popular way to scam unsuspecting victims out of their money.