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A media company is in hot water for charging customers for services they didn't want

The Federal Trade Commission (FTC) has filed its first case against mobile "cramming," where companies bill mobile phone customers for certain services without their knowledge.

The FTC has launched a lawsuit against Wise Media, LLC, and its owners Brian M. Buckley and Winston J. Deloney. The company sent services like horoscopes and love tips to random mobile customers around the U.S. and secretly billed them repeating charges of $9.99 per month. Concrete Marketing Research, LLC, has also received money from the operation and was listed in the FTC complaint.

The customers received text messages that insinuated that they were subscribed to the service, but had no idea about the $9.99 monthly charges. Many ignored these texts from Wise Media and assumed they were spam.

Even those who replied to the text messages saying to unsubscribe them were continuously charged. 

Wise Media snuck its third-party charges to customers' billing statements under an abbreviation so that they wouldn't understand what the charges were for exactly. Many had no idea it was a third party charge and paid it anyway.

For those who were curious about the charge and inquired about it, finding Wise Media's contact information was difficult, and even when they found the phone number, the company's representatives promised refunds that never came.

This is considered mobile phone cramming, and the FTC is out to stop it. 

“The concept of ‘cramming’ charges on to phone bills is a not a new one,” said FTC Chairwoman Edith Ramirez. “As more and more consumers move to mobile phones, scammers have adapted to this new technology, and the Commission will continue its efforts to protect consumers from their unlawful practices.”

The FTC has asked the court to freeze Wise Media's assets immediately and order them to stop their deceptive business. The FTC is also seeking a permanent injunction that would force the defendants to give up the money they've made unfairly from mobile phone customers so they can be used to provide refunds to the victims.



Source: Federal Trade Commission



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RE: Fraud
By invidious on 4/18/2013 2:04:53 PM , Rating: 4
Unfortunately the law doesn't work that way, there is no law that plain and simply states "fraud is illegal". Illegal acts need to be specifically defined and classified. Varying degrees of crimes have different penalties and different burdens of proof, sometimes intent is a determining factor of legality and sometimes it isn't. These distinctions need to be in place ahead of time or law enforcement would be too chaotic. This also means that when a crime propogates to a new medium often times the law needs to be revised.


RE: Fraud
By dgingerich on 4/18/2013 4:36:24 PM , Rating: 2
The fact that they need to make such distinctions is exactly where the problem comes in. There was a college class I had a while back that is exactly the problem with the legal system, the education system, and our political system: wallow in complexity. That is the most asinine idea I have ever heard. Complexity is good when it is needed, but too much complexity introduces exactly what you are talking about. Too much complexity in the legal system introduces loopholes. Too much complexity in a computer program introduces errors and bugs. Too much complexity in a mechanism introduces vulnerabilities.

In this case, fraud should be defined exactly as "using deceptive practices to take property from another." Nothing more complex. This would cover a wide range of things, things that aren't covered currently, and not cover things that currently are prosecuted as such. (I know of a person who was prosecuted for fraud because the odometer on his car wasn't working, and spent 30 days in jail for it. H never intended to deceive the buyer, and told him it wasn't working, but the buyer was a lazy idiot that didn't want to take responsibility for his own bad choice.) It is simple and straightforward, and covers all means of deception.

Just like assault should be defined as "intentionally inflicting harm on another person." This asinine idea of touching a police officer as being assault shouldn't have ever come up. A person shouldn't spend 90 days in jail for tapping a cop on the shoulder to try to get his attention to direct him to a suspect. Instead, said officer turned around and wrestled down the innocent person and cuffed him, dislocating his shoulder, and the suspect of the robbery got away. Also, the NY police officer that sprayed 3 teen girls in the face with pepper spray for standing on the sidewalk, who just happened to be in an area with the idiot Occupy Wall Street protest nearby, would have been properly prosecuted for assault and jailed. (There is NO excuse for that!) Cops wouldn't be allowed to get away with undue force just because they're cops.

Laws need to be simple and straight forward so they cover harmful behavior and not let some fall through the cracks for years and even decades while the lazy lawmakers fail to act. Such ideas are absolutely asinine.

The intent, penalties, and burdens of proof can be defined elsewhere once an act is designated as a crime. One part that certainly should be in place is that any government officer charged with enforcing or judging a law should have double penalty, at least, for any law offense.


RE: Fraud
By Spuke on 4/18/2013 7:00:48 PM , Rating: 2
You sound a little bitter.


RE: Fraud
By theapparition on 4/19/2013 9:53:28 AM , Rating: 4
quote:
In this case, fraud should be defined exactly as "using deceptive practices to take property from another."

Under those terms, almost every Apple ad ever made was deceptive. Some call it marketing, but let's face it, there were plenty of outright lies in their marketing. They've had to do plenty of retractions, pulling commercials, and even printing apologies.

And most car ads, where a car is the best in it's "class", and they don't really tell you they redefined classes and it's the only one there.

What about the local corner store near me that advertises "The worlds greatest potato salad"?

I get what you are saying, and most of the examples above can pass a common sense test, but we all know that the legal system is rife with abuse. How bad do you think the litigation abuse would be if you opened the door with ambiguous language.


RE: Fraud
By dgingerich on 4/21/2013 9:11:18 AM , Rating: 2
indeed...

it's not ambiguous language, it's direct and straightforward. If it's deceptive, it's wrong. Plain and simple. If a business owner can't make money without being deceptive, he or she is incompetent, and should be doing something else. The sheer volume of deceptive practices in this country show just how far off course we've gone.


RE: Fraud
By theapparition on 4/22/2013 10:12:53 AM , Rating: 2
quote:
If it's deceptive, it's wrong.

The litmus test for "deceptive" is the problem. Who defines what is deceptive?

I understand what you are thinking, but in reality you are opening the door to lawyers for the interpretation of "deceptive" tactics.

As a wise dead man once said "Luke, you're going to find that many of the truths we cling to depend greatly on our own point of view."


RE: Fraud
By lyeoh on 4/19/2013 6:53:58 AM , Rating: 2
So in your country cheating someone out of their money is legal by default unless prohibited specifically?

From what I see it's illegal in many countries: https://en.wikipedia.org/wiki/Fraud

Whether it's prosecuted or the victims take action is a different matter.


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