Third-Party Service Fees Sneaking Onto Wireless Bills

Third-Party Service Fees Sneaking Onto Wireless Bills

March 10,
OPTING TO HAVE your daily horoscope sent via text message may help you prepare for the upcoming day, but it won't prepare you for all of the extra charges the service might inflict on your cellphone bill. Increasingly, consumers are discovering that all of those fun cellphone extras such as ringtones, games and entertaining text messages are resulting in some nasty charges from companies other than their cellphone provider.
"Most people have no idea that their cellphone provider can even act as a billing service for another company," says Bob Sullivan, author of "Gotcha Capitalism." What's worse: No credit card is needed. The only thing these so-called "premium content" providers need is your cellphone number to start billing. It also doesn't help that third-party charges are typically listed as vague "direct bill charges," "downloadable content" or "premium messages" on your wireless bill with no company name or specifics. "It's not like your bill says '$20 for ringtones,'" gripes Sullivan.
One common practice that catches consumers unaware is when a single purchase of, say, a ringtone or game, (unknowingly) triggers a monthly subscription or other additional charges, says Kent German, a senior editor at electronics review site CNET.com¹. The Florida Attorney General's office filed a lawsuit² in November against Buongiorno, a European digital mobile entertainment company, alleging that users who followed online ads for free ringtones were later socked with a $9.99 monthly subscription. (The suit is ongoing; Buongiorno has said it plans to defend its practices.)
Wireless service providers are also being taken to task. In early March, AT&T Mobility (formerly Cingular Wireless) settled³ out of court with the Florida Attorney General's CyberFraud Task Force, agreeing to reimburse thousands of its Florida customers who were billed by third-party companies for ringtones, games and other services that were advertised as free. The restitution is expected to surpass $10 million, says an AT&T spokesman.
Here's how to avoid getting sucked into third-party charges, and what to do should an unauthorized charge show up on your bill:

Avoiding Fees

Seek confirmation
The Mobile Marketing Association requires premium content providers to offer so-called double opt-in — meaning the customer must request the service and then confirm their interest again before they can be charged anything. You might think that downloading that new Tetris game, for example, won't result in any extra charges. However, if you receive an "Are you sure?" message before the transaction is complete it's highly likely that a charge above and beyond your wireless service provider's usual text message or web-usage fee is forthcoming, says Edgar Dworsky, founder of Consumer World⁴, a consumer advocate. Responding "no" should be enough to cancel a pending charge — although you won't get to download that game you want, either.

Pay with plastic
If you simply have to have season six "American Idol" winner Jordin Sparks's single "No Air" as your new ringtone, buy it from a company that lets you pay with a credit card such as RingToneJukeBox.com. Opting to have third-party charges billed directly to your credit card gives you added protection such as the right to dispute the amount and nature of an unwanted charge⁵.
Initiate carrier protections
"None of the providers really like these third-party companies because they have to deal with the customer service headache," says Joe Farren, a spokesman for trade group CTIA-The Wireless Association. Ask your provider what options it offers to keep such charges off your bill. In January, Verizon began allowing consumers to block premium SMS content providers from sending or subscribing them to content. AT&T offers controls that allow parents to keep their child from using a wireless phone to purchase any premium content, including ringtones, games and graphics.

Handling Fees

Monitor your bill
"You have to scrutinize your bill every single month," says Dworsky. You'll have an easier time removing unauthorized charges and getting reimbursed if you catch them right away, rather than a few months down the line. If you're worried about getting hit with unexpected charges, you might also opt to set up automatic bill pay⁶ through your bank rather than allow your cellphone provider to dip into your checking account each month. That way, you can dictate that only a set amount is taken out of your account so a bill padded with unwanted third-party charges won't go through.

Alert your provider
Your cellphone provider has no way of knowing you didn't agree to be billed until you call a charge into question or complain, says Sullivan. Most wireless service providers allow you to cancel a disputed charge and block future ones. Some will even reimburse you for unauthorized charges that you've already paid, although it may take several calls to customer service to find a representative willing to help.
Hunt down the third party
Having your cellphone provider remove the charge and block new ones is a great start, but you're not done yet, says Dworsky. "So far as the third-party provider knows, you're still subscribed," he says. Contact the company directly through its web site to unsubscribe.
Complain
If you believe any charges on your wireless bill stemmed from misleading business practices, reach out to the Better Business Bureau, your state attorney general and other consumer advocates⁷. Airing your grievance publicly helps them identify the worst offenders to go after and will help prevent others from being charged, too.