The Federal Trade Commission today said it settled allegations that a mobile operator had put charges on phone bills without user consent - an illegal practice known as cramming or "cramouflage"- to the tune of $10 million.
The settlements, with Wise Media and its CEO, Brian M. Buckley, and employee Winston J. Deloney, permanently ban them from placing any charges on consumers' telephone bills or assisting anyone else in doing so.
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 Commission's complaint alleged 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 FTC said in some instances, Wise Media sent texts to people suggesting they had subscribed to the service. Not surprisingly, many consumers - getting a text from a company they'd never heard of about a service they didn't sign up for - simply ignored the message as spam. But even when consumers responded via text that they didn't want the service, the FTC says the defendants continued to bill them over and over (and over) again.
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, the FTC said. 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 FTC stated.
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