April 17, 2013 at 11:42 AM ET
Cellphone users annoyed by costly text spam or unexpected fees have hope: The Federal Trade Commission filed its first ever case against so-called "mobile crammers" on Wednesday.
In a complaint filed in a Georgia federal court, the FTC is alleging that Wise Media sent consumers text message spam and signed them up for $9.99-per-month "premium" text services with horoscopes, flirting tips and other unwanted information.
The FTC is seeking a permanent injunction against the company's alleged unfair trade practices and a freeze of the company's assets.
"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," the FTC said in its statement. "As a result, many consumers didn’t notice or understand the charges and paid the bills."
Complaints against Wise Media began to appear online as early as April of 2012. The firm is not accredited by the Better Business Bureau, thought its Atlanta office has received 26 complaints since last year — nearly all billing related — though it says those complaints have been “closed.”
Attempts to contact Wise Media were unsuccessful. Callers who dialed its Atlanta phone number on Wednesday heard a message saying the number had been changed to an unlisted number.
The FTC says Wise Media has been hard to reach in the past.
"The Commission alleges that Wise Media went to great lengths to hide its contact information from consumers. When consumers victimized by the scam were able to find a phone number for Wise Media, its call center employees frequently promised refunds that were never provided," it said.
Cramming is a decade-old trick to place third-party charges on consumers' telephone bills without their knowledge. Despite Congressional hearings on the issue, which is among U.S. consumers' biggest beefs, telecom providers continue to have trouble stopping crammers.
A report by Sen. Jay Rockefeller's office in 2011 found that consumers lose $2 billion annually to cramming.
Mobile phone cramming is relatively new, however. As consumer phone bills become more confusing, and as smartphones become more powerful, the risks to consumers have grown quickly. NBC News recently described cell phone attacks that could cost consumers thousands of dollars and net criminals millions.
Cramming doesn't require hacking, however. It can be as simple as a third party company telling a telecom provider to add the charge to a consumer's bill. While telecom providers say they require third-party firms to get consumers' consent, consumers often complain that doesn't occur.
“As more and more consumers move to mobile phones, scammers have adapted to this new technology, and the Commission will continue its efforts to protect consumers from their unlawful practices,” said FTC Chairwoman Edith Ramirez.
Red Tape wrestling tips
Consumers who receive an unexpected text message — such as notification that they've won a contest — should ignore the message and carefully check the following month's bills for unwanted charges. They can also look up the number at a website called SMS Watchdog, which tracks potential mobile phone spam. Consumers should also consider calling their cell service provider and turning off “premium text message” services.