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FTC sues company found to be 'cramming' cellphone bills with unauthorized charges

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SMS STOP message
SMS STOP message

The Federal Trade Commission is taking Wise Media to court, accusing the Georgia-based company of "cramming," or placing false charges on consumer cellular bills without their permission or knowledge. In a document filed today, the FTC says Wise, its CEO Brian Buckley, and owner Wiston Deloney "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." Those services, according to the suit, include "sending periodic text messages containing horoscope alerts, 'flirting tips,' 'love tips,' and similar kinds of information." Wise allegedly collects the monthly $9.99-per-service fee through the use of shortcodes, a billing mechanism supported by all major carriers that's typically used for wholly legitimate purposes like donations and political contributions.

A sketchy operation by all accounts

Yet many affected consumers insist they never signed up for any of the premium SMS offerings. Instead, they aparently received an unprompted message from Wise acknowledging their "subscription" and merely dismissed it as spam. Recognizing the unwanted charges proved to be a challenge in and of itself; the FTC says Wise's fees appeared in an "abbreviated manner" on bills, leaving consumers with few clues as to how they could dispute the added cost. Those who actually managed to unearth a phone number for the company were promised refunds that never came. The FTC maintains that Wise has earned millions of dollars thanks to the scheme and, among other penalties, has asked the court to freeze the company's assets and order Buckley and Deloney to repay affected individuals in full.

The lawsuit is the FTC's first offensive against mobile cramming, though just the latest salvo in the commission's war against mobile spam. (Both it and the FCC have previously sought to combat cramming on landlines.) The FTC has also scheduled a May 8th roundtable discussion where it will discuss other ways of protecting consumers against similar scams.