With AT&T, Sprint, T-Mobile and Verizon all dropping most premium SMS billing, this could means less failed or block text message over short codes and higher opt-in rates for SMS marketing campaigns and the loosening of regulation around these programs. Cramming – the practice of third parties adding a charge to a phone for a service the customer did not order – has become a major problem. Due to the cramming and highly visible law suits, carriers allowed subscribers to block short code text messaging, which even prevented delivery of standard text messages using short codes. This step by carrier will boast consumer confidence in interacting with short codes, and also ease regulation around SMS marketing programs.
Last week, AT&T, Sprint and T-Mobile agreed to not charge customers for premium text messages as part of an agreement reached with 45 states and led by Vermont. While Verizon was not part of the agreement, it also said it will stop charging for premium SMS. The United States is the first mobile market to take such a move regarding premium SMS.
The carriers, the Federal Trade Commission and state attorney generals have all previously tried to address cramming, but it has continued to be a serious problem in the U.S., leading to numerous highly visible law suits. There is one exception, with the carriers saying they will still support the use of premium SMS to make charitable and political contributions, particularly after a natural disaster or for political contributions.
These services have grown significantly over the past few years, with charities raising millions of dollars to help those affected by events. Typically, mobile phone users are able to text a keyword to a short code in order to make a small donation of between $10 and $25. Premium SMS also played an important role in the recent presidential election, helping candidates to drive smaller donations from a wide swath of Americans.