Major Mobile Carriers Stop Premium SMS Billing

14 Jan

The Big Four U.S. mobile carriers have announced they will stop billing customers for the majority of premium text messages. AT&T, Sprint and T-Mobile have signed an agreement with the Vermont Attorney General’s office, and Verizon has promised to discontinue the practice. All four companies accept that these services have become a gateway for fraudulent activity.

The move aims to end ‘cramming’, the term for bills tied to unauthorized third-party services. Forty-four states have followed Vermont’s example, including Delaware, Florida, Maryland and Oregon. Vermont’s Attorney General Bill Sorrell said unauthorized third party services offered through premium SMS "accounts for the majority of third-party charges on cell phones and for the overwhelming majority of cramming complaints."

Sorrell went on to say:

"This is a victory for cell phone users in Vermont and across the nation. While SMS has some benefits, like charitable giving, it is also a major contributor to the current mobile cramming problem. We are pleased that AT&T, Sprint and T-Mobile have decided to stop the flow of money from the pockets of ordinary people to the bank accounts of scam artists. We're hopeful the other carriers will soon follow their lead. There is still much work to be done. My office will continue to work with other states for industry reforms and to recover money for consumers victimized by cramming."

Most carriers will still allow customers to make donations to authoritative charitable causes and political campaigns. Otherwise, paid test messaging will largely come to an end.

In a statement, Verizon said:

 “While we don’t agree with all of the attorney general’s allegations, we respect his efforts in this area. Verizon had previously decided to exit the premium messaging business because of these changes as well as recent allegations that third parties have engaged in improper conduct in providing premium messaging services to our customers. We are in the process of winding down our premium messaging business.”

However, Verizon announced its intention to allow text-to-donate programs for charity, and text-to-contribute options for political campaigns. T-Mobile said it would do the same, with CEO John Legere Tweeting his belief in “making things right for our customers.”

AT&T is limiting itself to charitable programs only. Spring has yet to issue any comment on details of their plans.

It’s good news for the mobile marketing industry, which is increasingly making a name for itself as the ethical face of modern advertising. By law, mobile marketing strategies[BC1]  must adhere to a strict ‘opt-in’ rule for any SMS marketing campaign. The Vermont agreement will effectively eliminate the white noise of unwanted, unsolicited text messages. Getting rid of text outlaws will ultimately reflect well on mobile marketing firms who play by the rules.

So, bad news for bad practitioners, great news for mobile marketing campaigns that seek to build genuine brand loyalty and consumer trust.


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