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Scammers are cramming your phone bill with fake charges

I've told you about cramming before. It's a huge scam that has cost Americans up to $2 billion last year.

In cramming, a company claims to offer you a trial of its service. The most-popular scams offer horoscopes, trivia, fortunes, celebrity gossip or "adult" entertainment. If you use the free trial but don't cancel right away, the company starts charging.

The charge is usually $2 to $10 a month. Not enough to draw your attention, but after a year or two it adds up.

To make things worse, on your phone bill the charge shows up as "Usage Charge," "Monthly Service Charge," "Premium Service" or something similar. You might assume the charges are from the phone company itself , not a third party.

Earlier in the year, T-Mobile was in hot water with the FTC over the issue. Click here to learn more about that case. 

The issue has gotten so big that there was a Senate hearing on it this week, hoping to put an end to cramming.

"Scammers figured out a way to beat the system," Senator Richard Blumenthal, a Connecticut Democrat, said at the hearing. "They have been absolutely relentless in doing so."

Meanwhile, Michael Altschul of CTIA - the Wireless Association said:

... companies agreed that putting unauthorized charges on wireless bills was "wrong and simply not acceptable." He said carriers had also been "victimized by fraudsters who crafted elaborate schemes to defeat the industry's self-regulation and third-partying monitoring."

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