Mystery charges: Now on your cellphone bill, too

The Federal Trade Commission has filed its first case against mobile-phone "cramming," the nickname for fraudulent or line-skirting charges that landline companies have allowed on ordinary phone bills.

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.

You can read more about the case here, In a blog posting, the FTC offers these tips to avoid getting crammed:

  • Be aware that phone carriers allow third-parties to place charges on your phone bill. Read through your mobile phone bill every month. Yes, it's easy to go right to the bottom line, but the only way to be sure your bill is correct is to check the itemized list of products and services you are being billed for, one by one. If you don’t recognize or understand any of the items or charges, contact your carrier for an explanation.
  • Ask your carrier about services it offers to block third-party charges.
  • Be judicious when you are giving out your phone number online. This is often how crammers get access to your information.