Mobile phone fraud - The accidental data charge and other scams

I experienced this with Sprint and AT&T alike. I now pay $5 or so a month for a the honor of tracking my son's phone use -- that includes disabling his data access.

Here's Pogue's expose

Verizon: How Much Do You Charge Now? - Pogue’s Posts Blog - NYTimes.com:

...Starting next week, Verizon will double the early-termination fee for smartphones...

...The phone is designed in such a way that you can almost never avoid getting $1.99 charge on the bill. Around the OK button on a typical flip phone are the up, down, left, right arrows. If you open the flip and accidentally press the up arrow key, you see that the phone starts to connect to the web. So you hit END right away. Well, too late. You will be charged $1.99 for that 0.02 kilobytes of data...

...Every month, the 87 million customers will accidentally hit that key a few times a month! That’s over $300 million per month in data revenue off a simple mistake!..

...Now, you can ask to have this feature blocked. But even then, if you one of those buttons by accident, your phone transmits data; you get a message that you cannot use the service because it’s blocked–BUT you just used 0.06 kilobytes of data to get that message, so you are now charged $1.99 again!...

“They have started training us reps that too many data blocks are being put on accounts now; they’re actually making us take classes called Alternatives to Data Blocks. They do not want all the blocks, because 40% of Verizon’s revenue now comes from data use. I just know there are millions of people out there that don’t even notice this $1.99 on the bill.”"

For the record, here's a list of the mobile phone scams I know of ...

1. Early termination fees that exceed plausible costs
2. The time eating pointless answering machine messages
3. The "accidental" high priced data fees
4. The surprise fees and taxes with just about any transaction
5. The covert contract renewal with service changes
6. Recipient pays SMS transaction fees
7. The unusable cash card rebate fraud (AT&T settled with NY state on this one)
8. Uninterpretable cell phone bills.
9. Passive revenue from OAN Services and other cramming scams.
10. Unblockable SMS marketing.
11. Long distance interconnect fees.

Add them up and were talking billions of dollars in fraud. These scams didn't have to be planned out, all you need is fertile soil for emergent fraud.

See also:

• Emergence: how entropy and incentives create scams
• Regional airlines, emergent fraud and enlightenment 2.0
• 21st century deception and the evolution of the emergent mind
• Grumpy old boomers: pencil sharpeners, garbage cans, toasters, DVD/VCR combos and emergent fraud
• Head still exploding: The AT&T mobile phone rebate card scam
• John's head explodes: AT&T rebate paid with an AT&T debit card
• AT&T “A List” – the gift that’s not
• A deal with the Devil: We move from Sprint to AT&T and towards an iPhone
• The Empire Strikes Back: complexity, mobile phone plans, and Apple defeated
• Amazon and the evil of cellphone companies
• Phone company posted rates are completely meaningless
• AT&T is a partner to phone scams that target the vulnerable elderly
• AT&T sends more SMS Spam, locusts infest exec underwear
• Annals of idiocy - AT&T spams customers about a TV show

Update 11/17/09: More on how complexity attacks are used by mobile phone companies (and, incidentally, by health care insurance plans).

• Why Economists Love to Study Cellphone Pricing - Bits Blog - NYTimes.com
• Looking for a Method in Cellphone Price Madness - NYTimes.com

Update 10/4/10: Verizon gets caught.

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