WASHINGTON-A California-based consumer group last week filed formal complaints with state regulators against Cingular Wireless L.L.C. and Sprint PCS, accusing the No. 1 and No. 3 mobile-phone operators of charging subscribers for unwanted text messages and ringtones.
The Utility Consumers’ Action Network, headquartered in San Diego, asked the California Public Utilities Commission to take action against the two wireless carriers’ alleged practice of “cellular cramming.”
“Cell-phone customers should not be charged for ads sent to their phones by the carriers themselves, let alone any other advertiser. Sprint has apparently figured out a way where they can charge customers for advertisements and thus can use these spam ads to generate direct income. It is a troubling new paradigm where companies can charge customers each time they send an advertisement to that customer. Regulators need to stop this new rip-off in its tracks and put an end to unwanted text messages by preventing wireless companies from charging for this cellular cram,” stated Michael Shames, executive director of UCAN.
Travis Sowders, a Sprint spokesman, said the company could not comment directly on the complaint because the company had not seen it when ICAN took the action last Wednesday. But, he noted, “It is not Sprint’s practice or policy to charge for informational text messages.”
Shames said Cingular Wireless violates state law by refusing to remove charges for unwanted text messages and ringtones provided by other companies, and refusing to investigate consumer complaints. UCAN said it has documented various instances in which customers were charged for unauthorized ringtones or comedy messages delivered to their phones.
“When these customers complained to Cingular about the charges, the customers were directed to the third-party companies for recourse,” said UCAN. “However, UCAN alleges that California law requires Cingular (and all other wireless carriers) to immediately remove the contested charge absent proof of customer authorization and to investigate the unwanted charges by the third parties. UCAN asserts that the Public Utilities Commission also has received complaints of this nature, but is not enforcing the law that prohibits these non-communications charges.”
Cingular Wireless also said it could not comment on the UCAN complaint because it had not seen the filing.
The top U.S. mobile-phone operator said it takes precautions to protect subscribers from receiving and being charged for unsolicited wireless content.
“We put safeguards in place so that our customers understand downloads they before they agree to buy them from third-party providers,” said a Cingular spokesman. “For example, we require third-party providers to get two positive responses from our customers before selling ringtones, graphics, games, or other content. Third-party providers must also make clear the pricing for these services and how to unsubscribe. Said another way, our goal is no surprises.”
UCAN’s action against Sprint PCS and Cingular Wireless is different from lawsuits filed earlier this year here and in Europe against Jamster, a VeriSign Inc. unit that markets ringtones, games and images to young wireless users, in that UCAN is targeting the carriers-not a third-party companies-under existing state law.
Last year, the CPUC affirmed a $12 million fine against Cingular for charging early termination fees and prohibiting refunds during a period when the mobile-phone carrier aggressively marketed service without disclosing network problems to customers. Cingular adamantly argued it was innocent of any wrongdoing.
UCAN’s complaints against Sprint PCS and Cingular are the latest in string of high-profile wireless consumer battles in California.
The CPUC, led by Commissioner Susan Kennedy, plans to hear testimony and hold hearings the next two months on a plan to overhaul a bill of rights for telecom consumers. The CPUC approved the bill of rights last year, but in January put on hold new guidelines on carrier marketing, billing and contracts pending a comprehensive review of the rule. Kennedy wants to issue a less regulatory bill of rights by the end of the year.
GOP Gov. Arnold Schwarzenegger and the mobile-phone industry have been highly critical of the bill of rights approved by the CPUC last year. Despite efforts to streamline the bill of rights, the cellular industry has not embraced the Kennedy plan.
The Democratic-led California legislature responded to Kennedy’s initiative by attempting to pass bill-of-rights legislation based on the CPUC measure. The state Senate passed the bill in May.
But earlier this month, an Assembly committee voted down bill-of-rights legislation penned by Sen. Martha Escutia (D) and backed by consumer groups, state Attorney General Bill Lockyer and others.
“We are pleased with the committee outcome and look forward to continuing to participate in the ongoing process at the CPUC. We believe that wireless consumers have been-and will continue to be-well served by a consistent, national regulatory framework,” said Joe Farren, a spokesman at CTIA, the wireless industry association.
While the California Assembly Utilities and Commerce Committee effectively killed the bill for this year, the legislation can be brought up again next year. Some lawmakers who did not vote for the bill said they would do so next year if the CPUC does not enact some level of telecom consumer protection this year, said an Escutia aide.
