FTC cracks down on mobile cramming operation

ID-100128578Paying the cellphone bill is expensive enough without someone tacking on extra charges for services you don’t use and never asked for. The Federal Trade Commission (FTC) just announced it is taking action against a mobile cramming operation that billed consumers tens of millions of dollars without permission.

The FTC complaint seeks to shut down the operation and recover money for consumers. The complaint alleges that Lin Miao and Andrew Bachman used a number of companies to pitch things like love tips, fun facts and celebrity gossip in text messages. The defendants allegedly placed monthly subscription fees for these “services” on consumers’ bills without permission.

The practice known as mobile cramming, counts on that fact that consumers don’t always closely examine their monthly statements, or that if they do, consumers might assume the charges are legitimate.

In addition to cramming charges on consumers’ bills, the defendants allegedly used deceptive website offers to get consumer phone numbers they could use to sign people up for services without their knowledge. One example involved telling visitors to a website that they had won Justin Bieber tickets which they would receive after filling out a quiz. The quiz included their phone number. They never received the tickets, but were likely signed up for a paid service.

Consumers were continuously billed until they noticed the charges and unsubscribed. Charges were typically $9.99 per month and were listed on bills with names like “77050IQ12CALL8663611606” and “25184USBFIQMIG.”

Getting refunds was often difficult, with refunds promised that never arrived or only partial refunds being delivered. With refund requests as high as 40 percent in some months, some carriers suspended the defendants from billing consumers.

The FTC alleges that the defendants violated the FTC Act by misleading consumers into belileving they had to pay for the premium text message services and by unfairly billing consumers for services they did not ask for.

Defendants are 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.