Wednesday, November 7, 2007

Price For 'PREMIUM' Text Messages? $10,000

Sean Clark pays extra each month for his cell phone service so his daughter Amanda can enjoy unlimited, no-charge text messaging. So the Bothell, Wash. man was stunned when his Sprint bill for September showed with nearly $10,000 in text message charges.

"When I opened the bill, it was just pure shock," he said. "There were pages and pages and pages of things on there."

He called Sprint immediately looking for an explanation. Clark knew ringtones and Web-based downloads could get expensive, so he had turned off Web access from Amanda's phone. He also knew that Amanda, a developmentally disabled 18-year-old, liked to send text messages so he "protected himself" by signing up for unlimited messaging. The bill for his family plan was normally a couple of hundred dollars per month.

Initially, a Sprint customer service agent agreed with Clark’s guess that he was a victim of fraud. But a bit of research revealed that he was instead the victim third-party providers who offer services on Sprint's network. And he quickly learned that not all text messages are equal.

Amanda had signed up for a series of so-called "premium" text message services. Premium texts cost typically $1-$2 each and are not covered by monthly bundling plans.

It's hard to imagine one teenager running up $10,000 in text charges in a month -- until you consider the services she used. Amanda had signed up for text-chatting services, lured by ads promising romantic dialogs with "cool guys." With each message costing $1-$2 a pop, such chats can easily cost hundreds of dollars a day.

Clark asked his daughter about the services, and then found the advertisements which had led her to sign up. He discovered a pile of magazines aimed at teen-age girls in his daughter’s room, all crowded with advertisements full of smiling teen-age boys bearing headlines like "Hook a hottie.""She had no understanding of the repercussions," Clark said. "… My conversations with the phone company customer service lines have been laughable."

Clark asked Sprint to waive the charges, saying he hadn't authorized them; the company countered by offering to cut his bill by 50 percent.

U.K-based company He also contacted the third-party text providers. One, Switchfire Ltd., a British firm, had charged for 642 messages sent from Aug. 14 to Sept. 5. At $1.99 a message, Clark's total Switchfire bill was nearly $1,300.

The company refused to offer a refund, saying Amanda had knowingly authorized the charges. Clark provided with e-mails he said were sent to him by Switchfire customer support manager named Dace Viesture.

"Having checked the history of your daughter's number, it shows that she signed up for the service on 15 August by texting us 'guys.' In response to the request we then sent her the following text message:

‘Almost there! Please text the letter: 'Y' to: '74447' to start. 14+ Help?1-866-662-7132. Send STOP to end.100c per msg rcvd + std msg fees,’ which she answered to with 'yes'. This proves that she had read the previously sent text and confirmed she agreed with the information we sent to her," the Switchfire e-mail said. "As to the age of your daughter - she has said in chat on various occasions that she is 18 years old, besides, the services she was using were not adult ones. As the service has been initiated and used, we are sorry to inform that you are not entitled to a refund."

Providers could do more to stop surprise bills, advocate saidStill faced with a huge $5,000 bill, Clark contacted consumer advocate Edgar Dworsky looking for advice.

"I feel helpless," Clark said. "I have tried to get in contact with an attorney, but I can’t seem to find anyone in this area of work, and I’m not sure the dollar amount is significant enough."

Dworsky, who has written about confusion surrounding premium text messaging services on his Web site and, said the services frequently bring surprise cell phone bills. There are some laws and regulations governing advertising to children, but none that specifically address premium text messages, he said. And since Amanda was 18, regulations that cover children-focused advertising wouldn’t apply anyway. Still, he thinks cell phone companies could do more to help parents.

"Unfortunately, kids are enticed by a particular service and sometimes ignore the fact that there's a price associated with it," he said. "Also, looking at the ads (Amanda answered), they really did not have clear disclosures." Only at the bottom of the ads, in very small print, were the per-minute charges revealed, he said.

Clark, meanwhile, says it’s unfair that Sprint never warned him as the third-party charges on his bill skyrocketed far beyond his normal monthly usage. Some kind of fraud controls should have kicked in, he said.

"I received no alerts from the phone company of this escalating bill," he said. The cell phone text message trade association, called the Mobile Marketing Association, does publish best practice guidelines that call for such warnings. In the most recent guidelines, published July 16, it actually addresses text chat services, advising firms to send warning messages to consumers every time a $25 threshold is reached.

"To me, this makes it seem as though Sprint was not fully acting within (the association's) best practice suggestions," Clark said.

Sprint representative Emmy Anderson would not discuss Clark's account, citing privacy rules. She suggested parents use online billing access to monitor their kids' cell phone usage. Some Sprint plans also allow parents to turn off their kids' text message feature, or limit them to communicating with only certain pre-approved phone numbers.

Technology improvements, such as the invention of five-digit shortcut short-codes for joining third-party services, have led to an explosion of premium text message business. One mobile phone industry veteran, who requested that his name be withheld, said all cell phone providers are struggling with ways to appropriately screen third-party firms before giving them access to customers. But for now, it’s up to parents to monitor their kids cell phone use closely and to keep up with any new services that become available on their kids’ handsets.

• Most important: Know that premium texts are not covered by monthly text message plans.
• Ask your carrier to block premium text messages from your phone. Not all of them will.
• Use other tools to limit and keep track of kids' cell phone use.
• When asking for a refund, be persistent but polite. Dworsky said some consumers have been refused any refund, while others have received full reimbursement. "Apparently it depends on who you speak to," he said. "One representative might say we can't do anything for you, while others might say (they) can waive some or even all of it." So if you don't get the answer you want right away, keep trying.

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