How MSPs are dealt with in other countries

In the United States, the robust Federal Communications Commission (FCC) has rolled out the penalties for cramming. A list published online shows that, starting in 2004, a series of consent decrees and forfeitures have either been proposed or imposed on phone companies. Last year, Verizon and Sprint had to pay a combined $158 million to settle charges that it charged customers millions of dollars for unauthorised third-party premium text messaging services.

The FCC says cramming most often occurs when telephone companies allow other providers of goods or services to place charges on their customers' telephone bills, enabling a telephone number to be used like a credit or debit card account number for vendors. Charges for specific services or products that a customer may not have authorised include ringtones, cell phone wallpaper or premium text messages about sports scores, celebrity gossip, flirting tips or daily horoscopes.

In 2014 and 2015, the FCC, together with the Consumer Financial Protection Bureau, the Federal Trade Commission, and States’ Attorneys-General, agreed to major fines and settlements with the four largest wireless companies for billing customers millions of dollars in unauthorised third-party premium text messaging services.

Through these ‘cramming’ cases, the FCC and its partners brought a total of US$353 million in penalties and restitution against the US’s four largest wireless carriers, structuring these settlements so that US$267.5 million of the total will be returned to affected customers, the Commission’s website says.

In Singapore, operators are obliged to protect and restrict the use of any information they get about or from a customer while providing services or equipment. “Unless the customer gives prior authorization, the operator cannot use EUSI to market additional goods or services, or sell that information to third parties or affiliates,” a case- study published online states.

In Canada, the Competition Bureau investigated into unwanted premium text messaging charges on customers’ wireless phone bills by the MSP Bell. In May 2016, it ordered the company to issue rebates to current and former customers totalling up to 11.82 million Canadian dollars and donate approximately 800,000CAD to public interest advocacy groups. The Bureau reached similar agreements with both Rogers and Telus last year, bringing the total consumer refunds to over 24 million CADs and over 1 million CAD in donations to consumer groups sup- porting public interest litigation.

The Competition Bureau states the investigation was into whether the MSPs were, “making or permitting false or misleading representations to be made to customers in third party advertisements relating to premium text messaging services and placing charges for these services on wireless phone bills without prior authorisation from their customers.” These services included trivia questions and ringtones. The representations appeared in popup ads, web pages and social media promoting premium text messaging services.

MSPs in Australia are also being investigated by the consumer watchdog, with concerns over the level of disclosure. A news report said Telstra, Optus and Vodafone had commercial agreements with subscription service providers and gave them customer’s mobile numbers. They were then charged monthly for services which are embedded into their mobile bill.

“It is understood the telcos get about 30 per cent of the revenue, with insiders suggesting third-party billing generates tens of millions of dollars a year,” the report said. It is not known what Sri Lankan MSPs have earned from this scam.

Shocking? It should be.