Oliver McAfee

 

 

 

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Who pays for cell phone fraud charges?

By Lauren Villagran
Of The Associated Press

September 7, 2007

 

Q: If I my cell phone goes missing or is stolen, am I responsible for charges that I didn't ring up? How can I protect myself from fraud?

A: Picture this: You go out to dinner and a movie with friends, and you get home late. It's not until the morning that you realize you've misplaced your cell phone. You call your wireless provider to suspend service -- but somebody has already gotten hold of your phone and made calls. Maybe they've racked up $800 in charges to China or $500 in calls to Haiti.

You're not responsible for those charges, right? It's fraud.

Not so fast. Unlike credit cards, for which federal law mandates that a consumer's maximum liability for fraudulent charges is $50 per card, there is no such consumer protection from fraudulent calls made with a cell phone, according to Federal Trade Commission spokesman Frank Dorman.

Many of the major cell phone carriers hold consumers responsible for all calls made on their phone until the phone is reported missing or stolen. Although some say they review fraud claims individually, several carriers have policies stipulating that consumers are on the hook for all charges -- fraudulent or not -- until phone service is suspended.

T-Mobile says its customers ''have a responsibility to notify T-Mobile and take responsibility for what calls are made on their cell phones,'' but the company ''often evaluates these issues on a case-by-base basis.'' Mark Siegel, spokesman for wireless provider AT&T, formerly Cingular, says: ''You are responsible for the charges on your wireless phone.'' Official policy at both companies holds customers accountable for all charges until they report a phone missing or stolen.

''We have always tried to tell people to regard the cell phone like a valuable, like a wallet or jewelry, and to care for it that way,'' said Siegel.

The Federal Communications Commission reports that in 2006, about one-third of the roughly 20,000 complaints about wireless service had to do with disputes about billing and rates, of which complaints about fraudulent charges make up an unspecified part.

Sprint Nextel Corp.'s policy reads: ''Call us immediately if your device is lost or stolen because you may be responsible for usage charges before you notify us of the alleged loss or theft.'' Verizon Wireless protects its customers with a 48-hour window; the company's policy is to credit fraudulent charges within that time.

There are ways consumers can protect themselves from cell phone fraud. For example, it's possible to put a password guard on a cell phone, so that turning it on requires a secret code. Also, if you don't typically use your phone to make international calls -- which can quickly ring up to hundreds of dollars in charges -- you can ask your carrier to block outgoing international calls; some carriers, including T-Mobile, offer that service free of charge.

Cell phone companies stress that notifying them that a phone is missing is key to preventing or minimizing fraud.

''If it's lost or stolen, or even if you think it's lost or stolen, call us right away and with a keystroke or two we can prevent anyone else from using it,'' AT&T's Siegel said in an e-mail. It's just as easy to have your phone service reactivated if the handset is later found, he said. There is no charge to suspend or restart service.

CTIA-The Wireless Association, a Washington-based trade group, defends carriers' fraud policies as a way to protect the industry from fraud on the part of cell phone customers, who may falsely claim that costly charges aren't theirs.

''A wireless carrier has no way of knowing that your phone is lost or stolen until you tell them,'' said CTIA spokesman Joe Farren.

''You [the consumer] really have to have personal responsibility.''

USEFUL INFO: It's possible to put a password guard on a cell phone, so that turning it on requires a secret code. Also, if you don't typically use your phone to make international calls -- which can quickly ring up to hundreds of dollars in charges -- you can ask your carrier to block outgoing international calls; some carriers, including T-Mobile, offer that service free of charge.


Oliver McAfee, Ph.D.
www.olivermcafee.com

 

 


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