Three major cellphone carriers have agreed to stop billing their customers for Premium Short Messaging Services, Vermont Attorney General Bill Sorrell announced Thursday. Also known as PSMS or “premium text messages,” the charges account for the majority of fraudulent cellphone charge complaints, he said.
“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,” Sorrell said in a news release. “We’re hopeful the other carriers will soon follow their lead. There is still much work to be done.”
Sorrell said the agreement is a major breakthrough in industry discussions led by him and involving 44 other state attorneys general, including Delaware, Florida, Maryland, Oregon, Texas and Washington.
Notably absent from the agreement is Verizon Wireless, which commands roughly half of Vermont’s market for residential and nonresidential cellphone service. Verizon Wireless general counsel William B. Petersen said the company respects Sorrell’s efforts, and has taken its own measures to protect customers.
“We are in the process of winding down our premium messaging business,” Petersen said. “Verizon will, however, continue to support text-to-donate for charitable programs and text-to-contribute for political campaigns that use this technology.”
Sorrell said that functions such as charitable giving are benefits of PSMS, but also contribute greatly to the current mobile cramming problem.
“Cramming” is the term used to describe unauthorized third-party charges that appear on phone bills. Sorrell says the practice on cellphones and landlines combined costs Americans $2 billion per year. In May, Sorrell released a survey showing that 60 percent of third-party charges placed on the mobile phone bills of Vermonters were unauthorized.
Most third-party charges were banned from cellphone bills in Vermont in 2010. Sorrell said his office is now turning its attention to landlines.
On Nov. 12, Sorrell announced a $1.6 million settlement to be paid by 38 “crammers” caught scamming cellphone customers in Vermont.
Cellphone customers are sometimes signed up for these Premium SMS offers without their knowledge.
