The Federal Trade Commission is taking action to stop a mobile phone cramming operation that has placed tens of millions of dollars on consumers’ mobile phone bills without their permission. In its complaint, the FTC seeks to shut down the operation and recover money lost by consumers.

The defendants in the case include Tatto Inc. (also doing business as WinBigBidLow and Tatto Media); Bullroarer Inc. (also doing business as Bullroarer Corporation Pty. Ltd.); Shaboom Media LLC (also doing business as Tatto Media); Bune LLC; Mobile Media Products LLC; Chairman Ventures LLC; Galactic Media LLC; Virtus Media LLC; Lin Miao and Andrew Bachman.

The complaint charges that Miao and Bachman, through a number of companies they owned and controlled, pitched "love tips," "fun facts," and celebrity gossip alerts sent by text message to consumers, but placed monthly subscription fees for these services on consumers’ mobile phone bills without their authorization. The practice, known as mobile cramming, relies on the fact that consumers often don’t closely examine their monthly statements, or many assume that charges are legitimate.

“This case puts another dent in the armor of scammers who use mobile cramming to take advantage of consumers across the country,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “The FTC will continue working to protect consumers from unwanted third-party charges on their mobile phone bills.”

According to the complaint, consumers received text messages with random factoids that they dismissed as spam without realizing they had received them through a paid subscription service they did not knowingly buy.

The defendants allegedly used misleading Web site offers to obtain valid consumer phone numbers that they used to sign up consumers for their services without their knowledge.

In one case, a Web site told visitors they had won free Justin Bieber tickets, which they could claim by filling out an online quiz. Part of the process required consumers to enter their phone number, and while consumers didn’t receive the Justin Bieber tickets, their phone numbers were likely signed up for one of the defendants’ paid services.

The charges continued to appear on consumers’ bills until the consumers noticed them and took action to unsubscribe. The charges, typically $9.99 per month, often appeared on consumers’ bills with inscrutable names like “77050IQ12CALL8663611606” and “25184USBFIQMIG” and in many cases, consumers did not notice the variations in the amount of their bills from month to month.

When consumers did notice the charges, the process of getting a refund was often highly cumbersome. In some cases, consumers could reach representatives of the company, who would promise refunds that never arrived. In other cases, consumers were able to get partial refunds from their phone company, but only for a limited number of months – sometimes far less than the length of time they were billed. The number of consumers seeking refunds from their phone companies was as high as 40 percent in some months, and some carriers suspended the defendants from placing charges on consumers’ bills.

The FTC’s complaint alleges that the defendants violated the FTC Act by deceiving consumers, leading them to believe they were obligated to pay for the defendants’ premium text message services. The defendants also violated the FTC Act by unfairly billing consumers for services they did not ask for.

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