FTC Launches First Suit to Stop Mobile Phone Bill "Cramming"
April 18, 2013 12:22 PM
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.
Federal Trade Commission
"I f***ing cannot play Halo 2 multiplayer. I cannot do it." -- Bungie Technical Lead Chris Butcher
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