United States - FTC Files Its First Case Against Mobile Phone

The FTC filed an action to shut down a mobile “premium services” operation that allegedly took in millions of dollars from placing charges on consumers’ mobile phone bills, many of which were “crammed,” or unauthorized, charges. The complaint against Wise Media and its principals is the first FTC case against mobile cramming. The FTC’s complaint asks the court to immediately freeze the defendants’ assets and order them to stop their deceptive and unfair practices. The agency is also seeking a permanent injunction that would force the defendants to give up their ill-gotten gains so they can be used to provide refunds to victims of the scam. Wise Media and its operators have taken advantage of the fact that consumers may not expect their mobile phone bills to contain charges from third parties and that Wise Media’s charges appear on bills in an abbreviated manner that does not always clearly designate the company as the source of the charge. As a result, many consumers didn’t notice or understand the charges and paid the bills. In the complaint, the FTC alleges that the defendants’ practices were deceptive and unfair in violation of the FTC Act. The FTC’s case is part of the agency’s focus on consumer protection issues that may arise from the explosive growth of mobile technology. In addition to this enforcement action, on May 8, the FTC will host a roundtable discussion on mobile cramming with consumer advocates, industry leaders and government regulators to address how to protect consumers from this growing problem. The agency has announced a tentative agenda and speakers.