The operators of an Atlanta-based company have agreed to settle Federal Trade Commission allegations that they crammed charges on consumers cell phone bills without their consent, causing more than $10 million in consumer injury.
The two settlements, with Wise Media and its CEO Brian M. Buckley and with company co-owner Winston J. Deloney, ban them from placing any charges on consumers telephone bills or assisting anyone else in doing so. The FTC first took legal action in April to shut down the cramming operation.
The settlements prohibit them from using any other method to charge consumers for goods or services without ensuring that they are aware of the terms of the purchase and have expressly agreed to be charged.
The FTC's complaint alleged that Wise Media billed consumers for so-called premium services that sent text messages with horoscopes, flirting and love tips and other information. The Commissions complaint alleges that consumers across the country were signed up for these services, and that the operation placed repeating charges of $9.99 per month on mobile phone bills, without consumers knowledge or permission.
The settlement with Wise Media and Buckley includes a judgment of $10,965,638, which is partially suspended due to the defendants inability to pay the full amount. Buckley will be required to surrender nearly all of his assets along with any remaining assets of Wise Media, valued in excess of $500,000.
The settlement with Deloney and Concrete Marketing Research LLC, a relief defendant charged with receiving ill-gotten gains from the unlawful conduct, requires them to pay $175,817.?
The case is part of the FTC's efforts to ensure that consumer protections keep pace with developing mobile technologies.
This case involved a new delivery system for an old-fashioned scam, said Jessica Rich, director of the FTCs Bureau of Consumer Protection. Getting consumers consent before charging them is as basic a consumer protection as youll find, whether youre dealing with a brick and mortar store or with a mobile payment provider.