Consumers who have learned to watch for mystery charges on their monthly credit-card and phone bills now have a new concern: unauthorized charges on their cellphone bills.
The Federal Trade Commission says it has filed its first lawsuit against a company that it accuses of cellphone "cramming," the nickname for the fraudulent or line-skirting charges that landline companies have for years allowed on ordinary phone bills. Federal and state regulators have repeatedly cracked down on the process, with mixed success.
Now the FTC says a Georgia company, Wise Media, has made millions of dollars by bringing a similar scheme to the wireless industry. Among its allegations:
Defendants operate a scam in which they bill consumers for text message-based subscription services even though the consumers did not authorize any purchase of the services. Defendants' purported services have included sending periodic text messages containing horoscope alerts, "flirting tips," "love tips," and similar kinds of information. Using the billing mechanisms of mobile phone companies, Defendants cause unauthorized charges for these services to be placed on consumers' mobile phone bills, often with abbreviated and uninformative descriptions. Many consumers pay their mobile phone bills without ever noticing these charges; others pay and then unsuccessfully dispute the third- party charge without obtaining a refund; still others dispute the charges and succeed in having them removed only after substantial effort. Defendants have made millions of dollars to date from placing charges on consumers' mobile phone bills.