The adage “what’s old is new again” certainly applies to scams.  The scam I’m writing about today is “cramming” unauthorized charges on phone bills.  The scam previously targeted landline phone bills.  Now that many consumers have moved to mobile phones, the scammers are moving their “cramming” schemes to this new technology via unauthorized charges for premium text messages.

How does this scam translate to mobile phones?  A consumer might, for example get a text message offering a subscription to get horoscopes or quizzes on his mobile phone.  The way the text message is written — purposively so — makes it sound as if the service is free.  What happens next is the complete opposite of free.  The consumer starts getting unauthorized, repeating charges on his mobile phone bill.  Alternatively, the consumer hasn’t responded “yes” to a text message offering a service but with the same result to his mobile phone bill.

The Federal Trade Commission (FTC) successfully brought “cramming” cases against landline scammers.  Now the FTC is moving against mobile phone bill scammers and 3 weeks ago filed its first mobile phone bill “cramming” case.  The case was filed against Wise Media, LLC, Brian M. Buckley, Winston J. Deloney and Concrete Marketing Research, LLC (the latter is alleged to have gotten ill-gotten money from the Wise Media operation).

The FTC alleges that Wise Media, Buckley and Deloney billed consumers for “premium services” that sent them text messages with horoscopes, flirting, love tips and other similar information.  In the complaint, the FTC alleges that consumers were signed up for these services seemingly randomly and were repeatedly billed $9.99 a month on their mobile phone bills without the consumers’ knowledge or consent.

The FTC complaint also states that some consumers got text messages from Wise Media indicating that the consumer had subscribed to one of the services.  That email was ignored by many consumers who thought it was spam.  But the FTC’s complaint notes that even those consumers who sent back a text message refusing the service were still charged for the service on a repeating basis on their mobile phone bills.

The FTC has asked a court for a permanent injunction to shut down Wise Media and force the defendants to return all of the money they got from their alleged “cramming” scam.  If successful, the FTC would use the funds to reimburse the scam victims.

The FTC held a May 8th “Mobile Cramming” Roundtable May 8th.  I was able to attend for the first panel where experts discussed the topic “Understanding Third-Party Billing and Mobile Cramming”.   On Monday, May 13th I’ll write about the information and insights from that panel — including their top tips for fighting back against mobile phone “cramming.”