Lindsay Gary
In 2016 AT&T broke the mobile cramming law resulting in 2.7 million customers getting refunds. The company had intentionally charged small fees through a third party for things like ringtones and horoscopes that were not purchased by or honestly expressed to the customer. The DEA uncovered this scam within the computers at AT&T. The Federal Trade Commission made an example out of them by charging the company 105 million dollars, 80 million that went directly to the wronged customers. “I am very pleased that this settlement will put tens of millions of dollars back in the pockets of consumers harmed by AT&T’s cramming of its mobile customers,” said FTC Chairwoman Edith Ramirez. “This case underscores the important fact that basic consumer protections – including that consumers should not be billed for charges they did not authorize – are fully applicable in the mobile environment.”
So how do we as marketers learn from this and make sure we never owe the FTC 105 million dollars? Step one, learn the laws. The Mobile Cramming Law makes adding unauthorized offerings to your mobile/wireless bill illegal. So if you are selling HBO services you cannot add an ESPN package to a customer’s bill without their consent. Seems rather strait forward but when company’s make thousands off of these scams it is easy to understand why they ignore them and silently take their cut. We cannot ethically allow these sort of business practices as do more harm than good in the long run. Upfront increase in profits are not worth loosing customers and reputation through scamming. Within any mobile marketing campaign you need to ensure that it is legal so that it has the potential to reach your marketing goals instead of costing millions in fines.
LindsayPonomarev 