Don't Lose Your Money to Crammers

Recently, the FTC announced it is investigating T-Mobile for turning a blind eye to crooks making up to $2 billion a year through a technique called "cramming".  If you have a post-paid cellular plan (meaning you pay for services at the end of the month), then you need to be aware of this scam and how to avoid it.

The crammers will usually offer you a free trial of some service, and then, if you do not cancel by the end of the trial period, they begin charging you for the service.  The charge is usually small, which is why it escapes your notice.  When the first bill comes and you are now paying two or three dollars more, most people never even investigate the price increase.

However, over time, that extra two dollars per month adds up to plenty of money in the pockets of the scammer and the phone company (who gets a cut of the money you're paying.)  Even looking at some bills (including the T-Mobile bill example that the FTC posted online), you may not know what you are paying.  The FTC's example shows a charge listed as a "Usage Charge" on the first page, and then described only by the name of the company making the charge later.  Unless you question the charge, you may never realize why you are being charged.

Scams like these make it imperative that you check your bills every month for extra charges.  I use a pre-paid service for my cell phone now, but when I had a contract service with a major company, I had several months in a row where I had to contact them to question data charges on a phone that did not have data connectivity.  I was being charged for 1 MB of data at a price of $1.99.  After several months of complaining, the charges stopped, but I later read that company was facing a class-action lawsuit for exactly what I had faced.  That $1.99 charge might not seem like much to you, but 50,000 people paying that charge each month would bring in almost $1.2 million per year extra.

Finally, if you are concerned about these charges and want to make sure you never fall victim to these types of scams, you can block all third-party charges to your phone bill by contacting your carrier.  However, this will stop charges you might actually want, like an app purchase or a text donation to a charity.