CFPB Takes Action Against Carrier for Charging for Unwanted Services

On December 17, 2014, the Consumer Financial Protection Bureau (CFPB) announced that it had filed a lawsuit against a telecommunications carrier, alleging that the carrier was allowing third-party merchants to place unauthorized charges on customers’ phone bills. This is not the first time a federal regulator has taken action against similar practices; nor is it the first sign of CFPB interest in the practice. However, this lawsuit represents a major development in the mobile payments field because it is the first time the CFPB has attempted to use its authority to prohibit unfair, deceptive or abusive acts or practices (UDAAP) to pursue an entity based on allegations regarding these practices.

Read our client alert