The Federal Trade Commission on Monday accused two people of scamming consumers out of tens of millions of dollars by placing charges on phone bills without their permission.
The FTC said that Lin Miao and Andrew Bachman charged consumers for text messages containing “love tips,” “fun facts,” and celebrity gossip. Many consumers never noticed that their monthly phone bills contained charges for the text “services,” the FTC said.
{mosads}According to the FTC’s complaint, Miao and Bachman tricked consumers into signing up for the services through misleading website promotions. For example, one site claimed that if consumers entered their phone number and completed an online quiz, they could receive free tickets to a Justin Bieber concert. Instead of receiving free tickets, they were signed up for one of the monthly text services, the FTC said.
The services often cost $9.99 per month and were identified on bills with inscrutable names like “77050IQ12CALL8663611606” and “25184USBFIQMIG,” according to the FTC.
The commission’s complaint seeks to shut down the operation and recover money for consumers. The practice of placing unwanted charges on phone bills is known as “cramming,” and is a target for both the FTC and Senate Commerce Committee Chairman Jay Rockefeller (D-W.Va.).
“This case puts another dent in the armor of scammers who use mobile cramming to take advantage of consumers across the country,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in a statement. “The FTC will continue working to protect consumers from unwanted third-party charges on their mobile phone bills.”