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How Mobile Service Providers are Fleecing Mobile User Customers Through Third Party Billing for “Unwanted” Services

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By Namini Wijedasa

Sri Lanka’s Mobile Service Providers (MSP) have fleeced millions of customers through third-party billing, a practice by which they are charged for value-added services they did not knowingly enlist for.

Third-party billing arises from “mobile customers mistakenly joining subscription services by simply clicking on an advertisement or web page”. Registration takes place without the knowledge of the subscriber. Charges are automatically slapped on the bill, whether post or prepaid. And if customers do not inquire about the added fees, the companies continue levying them by default.

Also called “cramming,” the practice is so serious that T-Mobile US was, in 2014, forced to pay out US$ 90 million to settle a Federal Communications Commission suit that alleged the company had turned a blind eye to third parties charging their customers for services they did not want. Phone companies in Sri Lanka have also looked the other way, without suffering the consequences.

The largest settlement in a cramming case was the US$ 105 million coughed up in 2014 by AT&T, which agreed to the fine “to resolve allegations that it billed for monthly subscriptions that consumers never authorised and didn’t want”. Around US$ 80 million of the fine was to refund customers.

It is not clear just how much Sri Lanka’s MSPs and their partners have earned from this unscrupulous business tool. There have been no questions asked by the Regulator so far. Considering the subscriber bases of respective companies–the largest company has more than 11 million customers, with 9.5 million of these being the prepaid category–and how widespread the problem is, the amount is likely to be high.

Whilst cramming has gone on in Sri Lanka for more than two years (one company admitted they had been taking complaints over a two-year period), the Telecommunications Regulatory Commission (TRC) of Sri Lanka is only now starting to take note. On Friday, its Director General (DG) will formally raise the matter with operators.

“I have called a meeting and one of the main issues to be discussed is this,” said TRC DG Sunil S Sirisena. “We have received so many complaints from customers. They (MSPs) have been keeping quiet about it. One customer told me that he was registered for music downloads. When he didn’t want it, the company had told him he would have to pay to disconnect.”

The Sunday Times started investigating the practice after this writer found herself paying for a download service she had not registered for. The customer care representative who took the complaint explained that that company was partnered with various websites.

“If you go to one of those websites and click on an advertisement, it will register you,” he said, adding that they were receiving an increasing number of calls from similarly-affected subscribers. Industry sources said that, on some websites, it sufficed to move one’s cursor over a particular banner to activate registration.

It transpired that this writer was enlisted to receive downloads from a website questionably named “Southern Beauties”. And, despite the fact she never asked for or received a single download via the service, she was charged for the period of subscription. Worse, the fee for the service was not itemised separately in the monthly bill. Was it in the ‘Miscellaneous Charges’ category? Or the ‘Other Services’ one?

This writer received a month’s refund. Upon insistence (in a second call to the company), the customer care representative checked her back records and allowed another month’s refund. But the subscription had been for much longer.

How many others have been hit in this manner? The Sunday Times solicited feedback via social media and other means. There was a surge of angry responses. One customer said he was charged a massive Rs. 30 and Value-Added Tax per day for a service called ‘Mozook Fun Club’ which he had not signed up for. It was a game and music subscription.

Another said he was registered for a daily IQ quiz. He refused to pay the bill and his data line was disconnected. He challenged the company in writing to prove how he had subscribed for it. That was two years ago. He is still waiting for a reply.

Udara Madushanka was a prepaid customer. He had unknowingly subscribed to something called ‘Eros Wap Portal Service’ which he says he was charged Rs 5 a day. He only detected the additional fee because he was not a heavy user.

“Because of that, I realised it quickly, that the money I put to my phone was missing even when I was not using the phone,” he explained. “I have no clue how it happened. I checked for three days and then contacted the service provider.”

Abu Yusuf said he was charged saying he had subscribed for something he didn’t know about. He is a post-paid corporate customer. “Incidentally, I was trying to close a popup,” he explained. The company refunded the fee. But the same had happened to some of his friends who did not get their money back.

A customer said he was charged by one MSP for ‘Game Club Service’ and by a second for ‘Wap Subscription 2’. Another didn’t get a refund but the problematic subscription cancelled. Yet another was fleeced for a ringtone service she didn’t ask for. That was in 2014.

Ijaz Ahmed was charged Rs 30 per day and had nearly Rs 1000 added to his bill for ‘Saregama’. Loshan’s wife was charged for ‘Gameloft’. Akila Sudharaka unwittingly paid for ‘Eros’ despite using an ad-blocker. “I’m sure I hadn’t clicked on anything,” he says. “I don’t see any ads on any browser. On 5th July at 2am I got a message saying ‘welcome to EROS, you have activated, blah, blah. I was sleeping at that time.”

While the market leader had the most complaints against it, no MSP was spared. Some allegations are serious and merit immediate investigation. “There could be possible fraud if subscriptions are activated without user consent,” said an IT professional, on condition of anonymity.

Other ethical business practices are already proven: misleading information and banners, semi-nude click-baits, language barriers, accidental clicks, subscription auto-renewal by default, etc. “There could be so many poor customers for whom spending Rs. 30 on nothing is a big deal,” he continued. “Most of them just end up with no refund, even after complaining. Some just ignore it.”

All this raises crucial issues for a Regulator that has so far failed to act conclusively. Any investigation into cramming will require an examination of where the money went and the entitlement of customers to retrospective refunds. If MSPs had known for more than two years about cramming, why did they take the money and keep mum?

Company says third-party billing under investigation

The Sunday Times sent questions to the largest MSP — the one against whom most complaints were received — regarding cramming or third-party billing. The Company was forthright in its replies.

It is correct the MSP has received complaints from customers with respect to involuntary registration to value-added services, a written statement said. “The matter was subject to immediate investigation,” he continued. It was revealed that some of its value-added service and content partners “had not adhered to the service activation policy” laid down by the Company.

“This service activation policy stipulates that explicit customer consent should be obtained prior to registration to a service,” the statement said. “We have taken immediate measures to control such non-compliant activations, and are in the process of ensuring control measures are adopted across our expansive portfolio of content providers.”

In addition to services managed and extended directly by this Company, it also provided open development platforms which enabled third party developers to create and market applications using the network’s infrastructure. They are mandatorily governed by the service activation policies of the Company which stipulate, among other things, that the application provider should offer information on charges to be levied and, furthermore, that explicit consent should be obtained from the customer prior to registration.

It is unfortunate that a few of the Company’s service providers had not complied, the statement said. “Investigations have revealed that several non-compliant services have been advertised via web and mobile banners, which when visited–or clicked–automatically registers the customer for a chargeable service,” it admitted.

The Company has now reviewed the activation history of the service concerned and proceeded to extend waivers and refunds on applicable charges, it added. It said that, “at no time has there been intent to over-charge customers and that the Company is committed to reimbursing any unwarranted loss incurred by customers in this regard.”

The Company has now introduced a customer consent page linked to service advertisements. “When a customer clicks on a web banner advertising such a service, he or she is directed to a separate page where the name of the service and relevant pricing details are clearly stated,” the statement said. The customer needs to click ‘subscribe’ if they wish to continue to the relevant service.

“The control process implemented is centred on ensuring that a customer will not be deemed to have registered for a service unless the customer explicitly responds in the affirmative by clicking on the subscription button on the customer consent page,” the statement explained. This control process has been incorporated to a majority of services offered by third party providers and will be extended by the end of this month.

Courtesy:Sunday Times

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